THE FINANCIAL TROUBLES 

OF THE DIOCESE OF SOUTH CAROLINA

S.C. Episcopalians has alerted us to the financial problems of the Diocese of South Carolina. See scepiscopalians.com, "Annual Meeting of Former Breakaway Parishes Promises Headaches and Delusion," Feb. 22. DSC has posted its new diocesan budget online. Find it here . DSC has also posted the parishes' "2017-2018 Pledge Report"; find it here . Both of these documents tell us a great deal about the financial health of the diocese and its local churches.

Let's begin with the diocese. In 2018, DSC is listing an income of $1,998,483. Income has steadily declined, from $2,258,311 in 2016, and $2,102,851 in 2017. This is a fall of $259,828, or 12%, in the two years of 2016-2018. Expenditures have moved from $2,245,858 in 2016, to $1,959,851 in 2018, a drop of 13%.

There are numerous cutbacks in the budget in many areas. A glaring one is the zeroing out of Camp St. Christopher, which everyone knows the SC supreme court said remains with the Episcopal Church. 

Three areas that certainly were not hit were the bishop's income, the Anglican Church in North America, and legal costs. Bishop Lawrence continues to enjoy generous support from the diocese. His direct compensation package is $210,055. He lives virtually rent free ($1/yr) in the diocesan-owned bishop's residence on Smith Street. That place is valued at between $1.5 and 2.5m. The expected monthly rent would be around $10,000. Combining his compensation and his housing, his annual income from the diocese amounts to around a third of a million dollars. (One should bear in mind he is eligible to draw retirement from the Episcopal Church retirement system. It is possible he also draws Social Security income.) Lawrence's assistant, the Rev. Jim Lewis, is also well-paid at a package of $126,639/yr.

DSC is also contributing to the Anglican Church in North America a whopping $196,848. This amounts to 10% of the diocesan budget. To put this in perspective, DSC gave the Episcopal Church $35,741 in 2010, $23,377 in 2011, and $14,924 in 2012. The last contribution, in 2012, amounted to .07% of the diocesan budget. Thus, DSC is paying ACNA 14 times as much as it last paid TEC. 

Legal fees are another matter. In 2017, DSC budgeted $50,000 for legal costs but wound up paying $298,044. And, this was just for one year. Multiply this for many years and one sees why the lawyers would want to keep litigation going. This year, 2018, DSC is budgeting $200,000, again unreasonably low considering the three avenues of litigation now underway (appeal to SCOTUS, lawsuit in circuit court, and the federal court case). This is lining up to be a very expensive year legally speaking. (A document I obtained from a DSC parish revealed that DSC expects to spend $300,000-350,000 on the SCOTUS appeal.)

Putting this in a broader perspective, the DSC budget of 2008, the year Lawrence began his episcopacy, was $2,995,289. The DSC budget for 2018 is $1,998,483. This is a decline of nearly a million dollars, or 33% in the ten years. (Membership decline is even sharper but that will be the subject of another blog post.)

Bottom line---the financial state of the DSC is not good and is getting worse. Income is going down steadily. Many programs have been cut or eliminated. Apparently, DSC has stopped drawing from endowment accounts. Yet, expenses are going up.

The overall financial condition of the parishes is no better as revealed in the "2017-2018 Pledge Report." 54 local churches were listed, each with its "NDBI" (Net Disposable Budget Income). Of the 54, 18 failed to submit reports. Another 6 showed no change in income. 12 churches reported increases in income between 2017 and (projected) 2018 for a total gain of $439,466. The largest gain was at the Church of the Cross, of Bluffton, at $100,000. Our Saviour on Johns Island and St. Paul's of Summerville also reported sizeable gains.

While 12 DSC local churches showed increases, 18 reported decreases in income for a total of $957,849. The gain of $439,466 subtracted from the loss of $957,849 leaves a net loss among the 54 churches of $518,383, or a net decrease of 30% in one year (2017-18). By far the most critical loss was at St. Michael's of Charleston. Its income dropped by a staggering amount of $400,000, or 19% (in one year!). (It should be no surprise that Kendall Harmon and Al Zadig have scheduled a three-week campaign in St. Michael's next month, but that will be the subject for another day.) Other serious drops in income came at Holy Cross of Sullivans Island (-$91,192, or 5%), Holy Comforter of Sumter (-$80,350, or -12%), and St. Johns of Johns Island (-$54,650, ot -7%). Bear in mind these are changes in only one year. 

Altogether, the total NDBI of the 54 DSC churches moved from $25,498,658 in 2017, to $23,487,425 in 2018. This is a drop of $2,011,233 or -8% for the one year of 2017-18.

Thus, to summarize, on the diocesan level, DSC's income fell by 5% in the one year between 2017 and 2018 (12% for the two years of 2016-18). On the parish level, total income of the 54 local churches declined by 8% in the year.

DSC's long term outlook is dismal, to say the least, on many levels. The state supreme court has already ruled that 29 of the 36 parishes that purported to have left the Episcopal Church really had not. DSC's chance of reversing this in the U.S. Supreme Court is about the same as the proverbial snowball's. Their chance in the federal court case in Charleston is about the same. Yet, with income going downhill, their expenses are only escalating. Since the bishop's income, contributions to ACNA, and legal costs seem to be off the table, everything else in DSC will be decreased.

What is causing the decline in the financial state of the DSC? Good question that we cannot answer now. We know there has been a serious decline in membership. Since Lawrence became bishop, DSC has lost 44% of the number of its communicants. But, I imagine there is more involved here. I know there is lawsuit fatigue among the membership, and I suspect there is a flagging confidence in the diocesan leadership following the legal reverses.

The tragic irony of all of this should be evident to everyone. For years, the DSC leaders had their followers believe God was on their side and "orthodoxy" would mean health and growth. It is hard to maintain any such fiction now.