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Economist says recession over, church giving to increase

6/19/2003

By Joretta Purdue*

WASHINGTON (UMNS) - Don House has good news for the United Methodist Church. An economist, not an evangelist, he believes the economy is improving.

Everyone knows there is a connection between the state of the economy and the dollars - or lack of them - in Sunday's collection plate. Few people, with the exception of professional fund-raisers - are as aware of that connection as House, a United Methodist and economic consultant from Bryan, Texas.

House is on his way to becoming the denomination's economist, if he hasn't already arrived. Now a voting member of the church's financial administrative agency, House was a member of the United Methodist Funding Patterns Task Force (2001-04), which was charged with looking at how the denomination funds churchwide ministries.

The task force's study led the General Council on Finance and Administration to recommend, and the General Conference to adopt, a new formula for figuring the apportionments asked of each annual conference and, through them, of each local church.

House sensed the need for apportionments to be more in tune with the financial reality of the local churches and annual conferences, so he suggested incorporating into the formula a factor that reflects the economic health of the local church. The formula that is being phased in during this four-year period, or quadrennium, uses local church spending figures to achieve this.

As a member of GCFA's General Funds Coordinating Committee, House is participating in discussions that will lead to the 2005-08 budget proposal that the finance agency will present to the church's highest legislative assembly next year. He recently told other members of the council he believes the U.S. economy is no longer in recession.

"The numbers show we are out of the recession and in a period of growth, but church records don't yet show that, and they shouldn't," House said at the committee's May meeting.

Asked to explain what he meant, House told United Methodist News Service, "We have now experienced five consecutive quarters of sustained economic growth. This is strong evidence that we have 'bottomed out' and that we are well on the road to economic recovery."

The "sustained economic growth" House refers to is based on figures produced by the U.S. Department of Commerce that show inflation-adjusted increases in domestic productivity. A recession, on the other hand, is a period when the gross domestic product figure decreases, showing that output has fallen.

"Our apportionment payments are suffering from the impact of the recent recession that began in early 2001," he added. "The general press has not yet reported an end to the recession. However, the facts speak for themselves."

He expects giving to increase and payment of apportionments to grow as church members become aware that economic growth has returned, he said. Apportionment income at the end of May was down 7 percent - more than $2 million - from last year's comparable figure, to the consternation of church officials. Giving to the World Service Fund, which supports most of the churchwide ministries - from creating curriculum to mission outreach and international advocacy - was down 7.7 percent.

"Improvements should be evident as early as the end of the summer," he predicted.

Knowing that apportionments to the annual conferences are now "governed by the actual financial experiences of the local churches" is comforting to those engaged in developing the 2005-08 budget for churchwide ministry, House said.

"Apportionments for the 2005-2008 quadrennium are not 'set' at the 2004 General Conference as in years past," he noted. "Apportionments are now based upon percentages to be applied to local church expenditures. Only the percentages are set at General Conference - not the amount of the apportionments."

No one can predict with certainty what the economy is going to do, House remarked. However, the new formula offers what he called a self-correcting feature.

"If the economy falls back into recession, apportionments will adjust downward. If the economy continues to grow unexpectedly through 2005, apportionments will adjust upward," he said. "Today, much of the pressure of knowing exactly how the local churches will fare financially throughout the quadrennium is gone."

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*Purdue is United Methodist News Service's Washington news director.

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