Good day friends and members of BCCUCC,

We are sending you this letter hoping to accomplish three things; 1) start a discussion regarding church finances, 2) encourage people to return their estimate of giving cards if they have not done so yet, and 3) invite any generous people to communicate with us if they intend to provide a gift this year. Currently, we have faced several years of stagnant income and the accumulation of increasing expenses which has created a significant deficit in our budget. We want to reassure you that we have sufficient reserves to enable us to treat this as a rebuilding year, so it is not time for radical change. But it is time for us to explain where we stand and explore our options going forward.

Here is the good and the bad of how we arrived where we are:

2020- Pledges were as high as ever but actual receipts were short of expectations. Being the first year of COVID, both our expenses and income were reduced significantly. The end of year financial statement resulted in a 13k negative net income.

2021- Pledges received exceeded expectations, costs were still down somewhat, we received extraordinary gifts and pandemic PPP money, and had significant payroll savings due to pastoral transitions. This resulted in a positive net income of 80k. (Note that we had budgeted for a negative net income of 17k in anticipation of COVID’s impact.)

2022- (year to date) Due to attrition during the pandemic, pledges were noticeably down going into the year. However, the church once again received extraordinary gifts to cover this shortfall resulting in a positive budget prediction of 17k net income. Without the gifts it would have been negative 52k. (Also note that we called a settled associate minister, ending some payroll savings.)

2023- Budgeting for two full time ministers, greater health insurance expenses, custodial time back up to pre-COVID level, and in large part due to energy costs, a 15% increase in our Building & Grounds budget poses a significant challenge. On the positive side, the Nathaniel parsonage has not been rented yet, but could provide about 20k in income after anticipated expenses. However, even with this rented, the current draft budget projects a 45K net income deficit, unless we once again receive special gifts.

There are several drivers for the current situation: inflation, declining pledge income and increasing expenses.

Income: Since the beginning of 2020 until June of 2022, we have seen new faces in church. We have also lost members due to death, retirement, and attrition. The overall result is a decline in membership of 54 people, or 18%. The number of pledges is also down by a similar percentage. The good news is that this trend appears to be reversing. We have received quite a few new pledges this year, so it appears that the number of pledges and the total dollars could be higher than last year. A conservative estimate of this expectation is in the attached budget.

Expenses: Our increase in expenses is largely based on inflation. Staffing personnel and hours are largely unchanged from pre-pandemic levels, but salaries are up as we are working to keep pace with market pressures and rising costs. Additionally, the costs of a settled associate are higher than they were for our interim associates. We have multiple buildings across three properties, therefore, with inflation maintenance and capital expenses will rise significantly, and energy costs are likely to be up $7000-$8000 this year.

Over the past two years we have been blessed to have had several extraordinary income items (the forgiven PPP loans and one-time gifts from members). These unexpected gains have softened the impact of our rising expenses so that we have had break-even years in 2021 and 2022. However, we cannot count on these gifts to continue indefinitely. We need to find long-term solutions to this situation. For this coming year, returning your 2023 estimate of giving cards and alerting us to any potential gifts will go a long way to help us more accurately budget for 2023, which will help us better prepare to discuss our longer-term financial picture.

Please join us for a budget discussion following worship on January 8th. We look forward to discussing all these issues with you in further detail at that time. In the meantime, if you have any questions or concerns, we invite you to reach out to Tom Colby in person, email tcolby@fullchannel.net, or phone 401-578-4809.

Thank you for your time and love of our church!

Your Finance Team, Rev. Dale Azevedo (Sr. Minister), and Tom Strolla (Moderator)