Numbers that matter—on the annual parochial report and missing data

As churches struggle to find footing in what we hope are the waning days of the pandemic, Anglican Watch has been rummaging around the mountains of statistical data from the church. And while there are heaps and piles of data in all directions, we see trends that point to some dangerous omissions in annual report data. Specifically, many parishes are being lured into existential danger by the siren song of incomplete data.

So what data does the annual parochial report include? The answer is somewhat unclear, as definitions are a bit blurry. And many parishes wing it regarding data versus following the express guidelines sent with the annual report form.

But here is what the form, sent from General Convention, requests:

• Baptisms, confirmations, marriages, and burials during the preceding calendar year.
• The total number of adult baptized members, baptized members under sixteen years of age, and total number of baptized members.
• The total number of confirmed adult communicants in good standing, the total number of confirmed communicants in good standing under sixteen years of age, and the total number of confirmed communicants in good standing.
• A summary of all the receipts and expenditures of the parish.
• A statement of all real or personal property held by the parish, with an appraisal of its value.
• A statement of the parish’s indebtedness, if any.
• A statement of the amount of insurance carried.
• Race and racial reconciliation data.
• Narrative questions about challenges and opportunities.

Sounds like a lot.

But despite the depth and breadth of these data sets, as we discussed earlier, several gaps in the data result in misleading results. These missing data include:

• Total number of pledging units. Several parishes we follow happily report that everything is excellent based on total pledge and plate income. But with most church members ramping up giving to stave off decline, this data can be very misleading, as it’s disconnected from the number of pledging units.
  For example, in one church we follow, total annual pledge and plate typically hovers around $930k. But pledging units have dropped from 362 to 167 in the past ten years. Thus, while members celebrate their “restored” budget, the church is at profound risk, for the loss of even a handful of members results in significant cuts in revenue.Thus, total number of pledging units should be reported.
• Member ages. With the Episcopal church much older than the general population, far too many overlook the tide tugging at the numbers, which is the passing of more senior members. Thus, if 65 percent of a parish is retirees — a not uncommon situation — almost 2/3 of pledging units likely will be gone within 20 years. Relatedly, suppose a parish has thin revenue but numerous young members and is retaining members. In that case, the future may be brighter than we realize as parishioners move toward their peak income years.
  Thus, statistics for the age of parish members should be reported.
• Mean and median pledges. In one parish we track, 40 percent of the budget comes from one person. In another, much larger church, five families, all retirees, make up 40 percent of the budget. These situations are far from unusual, and in many cases, the average pledge is skewed by a few families giving sacrificially. Much like omitting the number of pledging units, these situations can lead to catastrophic complacency. And the loss of even one of these critical pledges can send a church into a financial tailspin. Moreover, because these individuals typically are circumspect about their generosity, conflictive parishes run the risk of biting the hand that feeds them.
  Thus, both mean and the median pledges need to be reported.

• Inflation. Remember the parish we discussed above with the 930K annual pledge and plate? Folks there like to think that they are “holding the line.” But the reality is that compound inflation over the last 10 years has reduced their purchasing power by 30.2 percent over that time. Thus, they are largely unaware of their declining finances.
  Thus, financial data should be reported in inflation-adjusted values.

• Surrounding population growth or decline. Of the few Episcopal churches that are growing, very few correlate their growth with the growth or decline of the communities in which they operate. Thus, if a church is in an area experiencing double-digit growth, the church is losing “market share” if its growth measures in the single digits. Similarly, a church that perceives itself in slow decline may actually face precipitous decline if the surrounding community is burgeoning.
  Thus, when the national church reports data, it should report this important context. (We don’t think parishes will be comfortable parsing this data.)

While we are on the topic, we also want to address a caveat provided by the national church. Specifically, the church is correct that the data reported is not forward-looking. Yet despite what the Securities and Exchange Commission says, past results typically are indicative of future performance. When these trends have been consistent for many years, it is safe to infer that they are predictive of future results. This is even more the case when, as here, we see no indicia of changing fundamentals, or factors that would produce changes in these results,

In other words, nice try, folks. While we appreciate the effort to provide reassurance, this is a distinction without a difference. Not to mention church members need less reassurance and more awareness that massive change is required if the church is to survive.

That leads to the question: will the Episcopal church as we know it survive?

Definitely not. The end is quite near, even if the downward trajectory slows.

Might some form of the Episcopal church survive?

Given the extensive assets held by the denomination, the answer is perhaps.

But unless Episcopalians recognize and understand the challenges the church is facing, there is no guarantee that what survives will be recognizable to today’s members.