Dear Arkansas Annual Conference,
Greetings from your Conference Council on Finance and Administration (CFA). Coming out of Annual Conference 2023, we resolved to be proactive in communicating our work as we prepare for Annual Conference 2024. To begin that process, we want to share the following information regarding how we have arrived at where we find ourselves.
In 2016, the Arkansas Conference adopted a proposal that brought sweeping changes to both the budgeting process of the Conference and how ministries of the Conference would be funded. This proposal, called “The Tithe Initiative,” moved the Conference from an expense-based model of budgeting to a revenue-based budgeting model. In the expense-based model, CFA determined the funding needed to support the Conference budget and then allocated (apportioned) the total amount to the various churches based on a strict formula. With the move to a revenue-based model of budgeting, CFA now projects its expected funding based upon a tithe (10%) of local congregations’ collections. CFA then sets the Conference budget to be in alignment with the projected tithe income.
The Tithe Initiative was designed to directly tie each local church to its individual financial situation and to directly tie the Conference’s budget to the financial health of the local churches, thus enhancing the sustainability of future conference and local church budgets. Because it is based upon the total revenue available to a congregation to spend on normal operating expenses, it more accurately reflects each individual church’s ability to pay without penalizing them for decisions on how they will spend their revenue.
Initially, The Arkansas Tithe Initiative was used to support Conference, Jurisdiction, and General Conference Ministries. However, from the beginning, the goal was to also fund District budgets as well through The Tithe Initiative, a goal that was finally reached in 2022. By directly tying the amount of revenue the Conference can work with to a tithe of the operating revenue of the churches of the Arkansas Conference actually receives, The Tithe Initiative has placed the Arkansas Conference on a fiscally sustainable path.
In 2016, a sacred promise was made to the Arkansas Conference that once the goal was met to include all District, Conference, Jurisdiction, and General church budget requests within the tithe, CFA would only create budget proposals that could be sustained by the tithe. The Arkansas Conference budgets are now completely tied to the collective fiscal strength of its churches, and future proposed budgets will remain so.
While our revenue-based system of budgeting provides a financially stable path for the Arkansas Conference, it also places upon the Conference the obligation to “live within its means.” This means that in this season, with an anticipated loss of up to $2,500,000 in tithe revenue due to disaffiliation, the Conference will need to adopt budgets that reflect this loss of revenue. At the 2023 Annual Conference, CFA presented a budget for the 2023-2024 Conference year that reduced the budget by $1.3 million and is now faced with the challenge of preparing a budget proposal for the following year that will have a similar reduction amount.
This brings us to this point. In previous years, CFA would begin the budgeting process about six months before Annual Conference. CFA has already initiated this process by studying current and future ministry needs and direction, prioritizing and allocating resources. CFA is committed to continuing communication about this work. There will be some difficult decisions to be made. CFA requests and desires your prayers. If you have input, please share it with your pastor and/or your congregation’s lay member to the Annual Conference. They have received a survey from Bishop Merrill seeking input on a variety of topics that will help guide Bishop Merrill, other conference leaders, and us as we plan for our future as a conference. In addition, you can share any thoughts and ideas that you have directly with the Conference committee or staff member responsible for the area that you are interested in.
This is work that requires us, all of us, to seek God’s guidance and to offer grace to one another. We hope to communicate with you monthly. Until November…
Grace and peace,
Arkansas Conference Council on Finance and Administration