Summer Financial Update

Sometimes people wonder whether a capital campaign will have a negative impact on regular giving. That question came up several times during the small-group discussions we had about our recent campaign. Each time, I replied that experience—both mine and that of stewardship and fundraising consultants throughout the church—has shown the opposite is true. Successful capital campaigns usually increase annual giving. And that has been true in our case as well. Despite securing over $3 million in capital campaign pledges, commitments to the 2026 annual giving campaign were up almost 9% this year.

Nevertheless, churches that execute a successful capital campaign sometimes struggle to convince parishioners to maintain consistent timing for all their financial gifts. That has been our experience this year. I am not sure why that is the case, but I suspect that the attention given to the capital campaign and the excitement around the specific projects we are already accomplishing as a result of that campaign has shifted our collective focus away from the importance of steady, regular contributions to annual giving. As a result, we are behind on our annual giving budget.

I am confident that, by the end of the year, our giving will match or exceed our budget. It usually does. These months in the middle of the year are often the leanest for church income. Attendance drops considerably in the summer, and people who are away on vacation often forget to mail their check into the church. Things always pick back up in November and December, but this year we are facing some additional challenges that make your consistent giving particularly important.

For starters, we lost a Sunday to winter weather back in January. You may recall that we had to delay the Annual Meeting until mid-February because on January 25 the roads were covered with snow, and driving to church was hazardous. We still held Sunday-morning worship, but, instead of our usual full church, only a handful of people showed up. One week may not seem like a big deal, but the result was that our pledge income for the month of January was $50,000 behind. Although we have made some of that up, we are still tracking behind year to date.

More significantly, the Bassett buildings remain unleased. When the previous tenant broke their lease unexpectedly, they left considerable damage to the property that has needed remediation. Although we negotiated a financial settlement with the tenant, the cost of repairs plus the delay in occupancy have both been more significant than we expected. Because of the delay in leasing the properties, we are already $30,000 behind in rental income, and each month that it remains vacant represents additional financial gap. We trust our realtor, and we expect things to change soon, but the commercial real estate market for large properties like ours has been challenging for landlords.

Finally, although less significantly, diocesan support for ministry at St. Martin’s has been lower than we expected this year. We asked the Executive Council of the diocese to allocate $40,000 towards that ministry, which we pursue on behalf of the wider church, but they only allocated $30,000. I have expressed to our bishop my firm belief that no diocese in The Episcopal Church gets as much value from campus ministry as we provide at St. Martin’s for so little financial support, and I hope that diocesan support will increase next year. For now, though, we are left to provide excellent campus ministry with less financial backing than we need to maintain that quality, which puts additional strain on our budget.

All of that is the bad news—the challenges, the headwinds, the obstacles. Now, let me share some good news.

Of the $3.2 million pledged to the capital campaign, we have already received $1.2 million. We have already used some of that money to begin urgent roof repairs, which will help reduce long-term maintenance costs. We have also begun to pay off debt on the Bassett properties, which in turn reduces our interest payments which in turn lessens the urgency of finding a tenant. We have begun to replace HVAC units, which will save us money through both increased efficiency and reduced need for repairs. And our properties committee is currently seeking bids for the work on the kitchen and will soon take up the rest of the work made possibly by the campaign. In other words, the success of the capital campaign is already a reality for our church.

Keep in mind, though, that capital campaign gifts cannot and will not be used for regular operating expenses. Those gifts were earmarked for a specific purpose—the work of the capital campaign. Even though income from the campaign is ahead of schedule, we cannot use those funds to pay our monthly bills. We depend upon your generosity through your annual giving for that, which is why committing to both is important.

Another area of good news is our non-pledge giving income, which is ahead of budget and has been all year. That line in the budget represents gifts from people who did not turn in an estimate of giving card during the annual giving campaign. They might be newcomers who started attending our church after the campaign, or they might be established parishioners who forgot to turn in a card but continue to give anyway. We have no reliable way of anticipating those gifts, so the Vestry makes an educated guess based on previous years. Whenever that number is greater than we expected, it is a sign of congregational health and financial vitality.

Here are some things that you can do to help keep St. Paul’s in good, sound financial shape. First, continue to make your regular annual giving contributions throughout the year. After the month of June, we will email everyone an update on their giving for the year. Take a look at it, make sure everything is correct, and consider whether you can catch up on any gifts that have fallen behind.

Another thing you can do is to speed up your capital campaign gifts. Stock market indices continue to show record values. Although the stock market is not a true measure of the financial health of a community, many of you plan to use investments to make contributions to the capital campaign, and portfolio values are at all-time highs. Keep in mind that you can eliminate any capital gains tax liability by transferring the securities to St. Paul’s, and the sooner you turn in your gifts the sooner we can pay off the Bassett debt completely, effectively transforming that building fully into a resource for ministry.

One quick word of caution: if you decide to transfer securities to the church, PLEASE let Leslie Alexander, our Parish Administrator, know. Stock transfers are almost never received with the donor’s name attached to them. We need you to let us know so that you can get full credit for your donation.

Finally, one thing our staff is doing is looking for ways to cut back on expenses. I have asked our staff to join me in tightening our belts and reducing costs as much as possible. Most of our budgeted expenses are unavoidable, and our staff already manages well on a very tight budget, but we will do our part to reduce those that are within our discretion.

In the end, I am not at all anxious or worried about the financial health of our parish. We are in great shape because of your generosity and, ultimately, because of the goodness of God. Still, I want you to be aware of our financial situation because this is your church—our church—and I think it helps us continue to grow when we are all invested in the flourishing of the church we love.

Yours faithfully,

Evan D. Garner