Report OVERHEAD COSTS MINISTERIAL TEAM PRESBYTERIAN MISSION AGENCY BOARD SEPTEMBER 21-23, 2017

Transcription

1 Report OVERHEAD COSTS MINISTERIAL TEAM PRESBYTERIAN MISSION AGENCY BOARD SEPTEMBER 21-23, 2017 Presenting Question: How should overhead costs for the Mission Agency be managed, allocated, and communicated? Members: Marvin Brangan, Tom Fleming, Denise Hampton (Staff; Vice Chair/Recorder), Marc Lewis, Kathy Maurer, Wendy Tajima (Chair), Kathy Terpstra Additional staff members: Tamron Keith (World Mission), Tim McAllister (MDRC), Rosemary Mitchell (Mission Engagement), Bryce Wiebe (Special Offerings) Recommendations: The Overhead Costs Ministerial Team makes the following recommendations: 1. that the Leadership Cabinet ensure that the budgeting process internal to PMA and OGA include an opportunity for Ministry Area Directors and other program managers to be consulted on the costs and types of administrative support assigned to them, and possible ways to reduce the administrative burden of supporting the PMA. The process for consultation will be defined by the Leadership Cabinet and reported to the Board in September that the Finance and Accounting leadership work with the Ministry Area Directors and other relevant program managers to streamline the cost recovery rate to one flat rate for the entire agency, with the following exceptions: a. Jinishian Memorial Fund b. the Board of Pensions portion of the Christmas Joy Special Offering. 3. that a policy be developed by Mission Engagement and Policy, Administration and Board Support, and adopted by the PMA Board, committing to openness in communicating overhead cost recovery rates and any future changes. 4. that Mission Engagement staff be directed to develop one communications strategy on administrative costs for PMA, including: a. a glossary of terms and educational tools to explain the valid need to recognize overhead costs as part of the real costs of mission b. PMA s faith-based approach to stewardship that emphasizes our connectional commitments and challenges the theology of scarcity c. the new policy on overhead costs communication, if approved. 5. that a report on implementation and evaluation of these recommendations be presented to the PMA Board Finance Committee in its September 2018 meeting. 8/27/17 Overhead Ministerial Team Report Page 1 of 7

2 In addition, the Overhead Costs Ministerial Team recommends that further review be considered in the following areas: 6. Use of unrestricted funds to cover the administrative (overhead) costs for designated gifts, so that 100% of designated gifts go to the named recipient(s) to the extent possible. 7. Review of the cost recovery model for Special Offerings. 8. Review of PMA staff structures so that there is consistent staff for administrative support across departments. 9. Coordination with the Way Forward Commission, All-Agency Review Team, and the five other GA agencies to study differing calculation of overhead costs in the different agencies, and to resolve negative impacts of interagency competition. Rationale: 1. Budgeting: Currently the Ministry Area Directors are not consulted in the planning, budgeting, or evaluation of support services assigned to them. Besides the gaps in relationship and accountability that generally occur when program managers do not give input into effectiveness reviews and cannot practice indirect management, certain restrictions or practices are maintained that negatively impact programs in various ways. For instance, while the publishing department utilizes third-party vendors for shipping, the Special Offerings department is required to use in-house services at a higher cost than if they used third-party vendors. Also, any prospective donor who visits the PMA donor pages can be overwhelmed by the hundreds of Extra Commitment Offerings listed on the website; it is unclear if there has been consideration of cost savings (and better donor response) that may be achieved if this list was streamlined. It is hoped that these joint consultations can result in better relations as well as identified cost savings for PMA. 2. Flat Rate: The PMA s currently budgeted overall overhead allocation rate of 13% would be considered low compared to the rather broad range of acceptable allocation rates for large religious and non-profit organizations. According to an article in The NonProfit Times in 2012, The average American believes that a charity should spend no more than 23 percent on overhead but that charities actually spend 36.9 cents on the dollar. These were some of the findings in Where d My Money Go?, a survey by Phoenix, Ariz.-based Grey Matter Research & Consulting. The Bridgespan Group, itself a well-respected nonprofit consulting firm for nonprofits, found that overhead or indirect costs varied between 21 percent and 89 percent of direct costs. In the PMA, cost recovery rates are calculated by department. Other than two preexisting arrangements with the Board of Pensions for its share of the Christmas Joy Offering and the Jinishian Memorial Fund, these rates range from 11% for World Mission to 19% for portions of Theology, Formation and Evangelism. Though the overall PMA rate of 13% seems low, there are additional costs and access to funds that impact the effective income for various programs. As an example, for every $1,000 given to World Mission in 2015, the actual dollars made available for program was $890, for a total cost recovery rate of 11.0%. For Special Offerings, a $1,000 donation in 2015 resulted in $636 going to recipients, for a cost recovery rate of 36.4%, because all costs related to Special Offerings are to be funded from the Special Offerings revenues, as directed by the GA. 8/27/17 Overhead Ministerial Team Report Page 2 of 7

3 While the 36.4% cost recovery rate for Special Offerings may seem high at first glance, it is still within the range of acceptable cost recovery rates as stated above. However, the variations in cost recovery rates per PMA department are not communicated, nor is there clear understanding in the varied definitions of accounting terms as used in IRS report, in the PMA Annual Report, and as ultimately experienced by the donors and recipients of PMA funds. This results in confusion and suspicion on the part of donors. The priorities as identified by this Ministerial Team focus on streamlining the approach to overhead cost allocation, and a commitment to communicating the impact of overhead on funds for ministries and mission. The higher level of accuracy gained in the current model, with separate departmental analyses, does not outweigh the improved understanding on behalf of the whole Church if we moved to a flat rate for all of PMA. Please see the attached chart for an analysis of the impact of transitioning to a flat rate for PMA. The current actual run rate for administrative costs is 19%. As stated before, different departments are charged different rates for administrative cost recovery. If the PMA goes to one flat rate of 19%, this will increase the rate at which certain departments will be charged for administrative costs. For instance, it would be estimated that World Mission would be charged an additional $1,285,959, and Compassion, Peace and Justice would be charged an additional $683,478. However, the impact of a 19% flat rate will result in freeing up $2.4 million of unrestricted funds, which may be directed to the negatively impacted departments to smooth the transition. The management of this transition as well as the regular review of the level and costs of administrative support services would be the responsibility of the Leadership Cabinet as part of the budgeting process. Again, per the first recommendation, the Leadership Cabinet will ensure that there is significant consultation between Ministry Area Directors and program managers in OGA, to include among other things the review and forecasting of support services. Even as PMA moves towards a flat rate for the entire agency, there are a few exceptions. There are preexisting agreements with Jinishian Memorial Fund and Board of Pensions for cost recovery rates of 5% and 4%, respectively, so they need to be held to these rates. Also, Special Offerings revenue will still be charged for all related costs including staff, promotional activities, and the agency-wide flat rate for administration. See below for consideration of potential alternate scenarios for Special Offerings. 3. Overhead Communications Policy: As the committee worked, it became clear that the source of concerns about overhead had more to do with communications and relationships rather than accounting principles and technical accuracy. Perhaps the most problematic situation impacting donor confidence is the lack of transparency regarding cost recovery. There have been times when the deduction taken was not communicated, and attempts to inform donors were rejected. So the donor did not become aware of the deductions until the donor had direct communications with the external intended PMA grant recipient. This results in a lack of trust, which has at times led to donors and recipients making alternate arrangements for bypassing the PMA in supporting the ministry. The PMA Board has a stated Open Meetings Policy that specifically requires a level of transparency in communications during decision-making. On multiple occasions this policy, and its preference for openness, has helped to guide PMA Board meetings. It seems that this model of stated values for transparency could be a model guiding the PMA when considering whether and how to communicate cost recovery deductions to donors and recipients. This would benefit donors, recipients, and ultimately the PMA, as donor confidence would increase, and recipients would not find benefit in seeking alternate funding channels. 8/27/17 Overhead Ministerial Team Report Page 3 of 7

4 4. Overhead Communications Strategy: One of the key recommendations raised in the Report of the Committee to Review the Presbyterian Mission Agency was that the PMA develop and implement a plan to educate all donors about how their donations are allocated, including a clear breakdown of what percentage goes directly to mission funding and what percentage is applied to administrative costs. It has become clear that donors do indeed need not only education about the reality of administrative costs, but also the significant reduction in general mission giving and per capita funds, and how this limits the PMA s ability to cover administrative costs with unrestricted funds. Further, the fragmented nature of communications from the national church, with separate communications strategies from each agency and even separate departments, hinders donor access to information. Since the Mission Engagement staff is responsible for donor communication and relationships, it is recommended that they be the primary channel for donor education, including the recommended policy on Overhead Communications (see above). 5. One-Year Progress Report: These recommendations are quite ambitious, not only due to the complexity of accounting for all the activities of the PMA and its impact on sister agencies, but also the need for a shift in perspective on relationships of accountability in the midst of budget planning, support services and ministry areas, and donor communications. Scheduling a progress report one year from now will provide a. some evaluation of what was accomplished, b. a review of what needs to be revised as a part of this recommendation s implementation, and c. an action plan to complete what remains to be accomplished. The following areas warrant further consideration, but the Overhead Costs Ministerial Team does not make specific recommendations, either due to the larger scope of the issue, or the presence of other groups who are already considering it. 6. Unrestricted Funds for Administration: The traditional view of giving within the PC(USA) was that 100% of a designated gift would go to the intended recipient, in spite of a 2004 policy of applying a 5% administrative cost recovery to designated gifts. In some sectors of the non-profit world, 0% for administration is considered misleading. But in several education institutions, large donors are promised that 100% of their gifts go to programs. A well-respected development officer with experience with a large university and a PC(USA) seminary suggested that they could make such a promise due to endowments that provided significant unrestricted funds which were used to pay for administrative costs associated with the activities funded by the restricted funds. The PMA also has endowments, though in 2016, unrestricted funds covers only 21% of the spending of the PMA, which is less than the total administrative costs of the agency. In addition, the PMA is painfully aware that many of the most pressing mission priorities do not enjoy the benefit of restricted funds, and so require significant unrestricted funds in order to continue this work. Therefore, if unrestricted funds were used to cover more administrative costs, the PMA s most current and critical priorities would be curtailed. Also, in some ways implementing this policy may actually impact the management of administrative costs. While more research is needed, there may be ways for PMA to cover administrative costs in order to promote certain kinds of giving or to support the connectional nature of the Church. It would be wonderful if the covenant relationships between different levels of the Church were restored to the point that unrestricted giving or even additional streams of funding such as targeted support for administration would rise to a level where PMA can cover the costs of administration! 8/27/17 Overhead Ministerial Team Report Page 4 of 7

5 7. Special Offerings: Each year, the entire Church engages in receiving four Special Offerings: One Great Hour of Sharing, Pentecost, Peace & Global Witness, and Christmas Joy. There is great emphasis on these offerings, and even the General Assembly has set policy with regard to certain aspects of this program, such as the requirement that all related costs of the Special Offerings must be deducted before the offering is transmitted to the recipients. The receiving of Special Offerings is achieved through agreements of all levels of the denomination. Take One Great Hour of Sharing, for instance. A local church will typically promote and receive One Great Hour of Sharing on or around Easter. The church consolidates the offerings and gives 100% of the offering to the presbytery, who then consolidates all offerings received from local churches are consolidated and sent forward to the PMA. For the Pentecost offering, a local congregation may retain up to 40% of the Pentecost offering for services to young people in their community, and the remainder is forwarded to PMA. For the Peace and Global Witness offering, up to 25% may be retained by local churches for local peacemaking ministries, and a midcouncil may retain an additional 25% for its ministries of peace and reconciliation. Whenever Special Offerings are received, the offerings are passed through the local and midcouncil levels of the Church without any administrative costs claimed by the church or presbytery. However, upon receipt of the Special Offerings from the presbyteries, PMA applies a cost recovery rate before giving the offering to the recipient organizations. As stated earlier, the cost recovery includes the standard overhead allocation, plus all costs directly related to the Special Offerings staff and promotional expenses. In 2015, this resulted in 36.4% being retained by PMA for administration, with the ultimate recipients receiving 63.6%. In an informal survey of presbytery executives and others, no one knew that PMA does not pass through 100% of Special Offerings to the recipients, as is done at every other level of the Church. This recovery of administrative and promotional costs was directed by the General Assembly, but the actual implementation of the GA directive has not been noticed by many church members or leaders, and it will be important to review the GA directive, and possibly request a modification of it, if any change is to be made. One such change that was considered by this Ministerial Team was to set a special, subsidized fixed cost recovery rate for Special Offerings. For instance, a commitment could be made by PMA that the administrative cost recovery for Special Offerings is 10%. If the actual cost recovery rate for all of PMA is 19%, then PMA would bear the difference. The advantage of this subsidy for Special Offerings is threefold. First, donors can have the assurance that only 10% in administrative costs will be deducted from their gifts, and this amount would not fluctuate from year to year. Second, this helps to acknowledge the other levels of the Church who are supporting Special Offerings without recovering their costs of administration. And third, as with setting an agency-wide flat rate, administrative costs will have increased visibility for review and management. On the other hand, this would require a change to the GA directive, and the added direct costs would likely still need to be assessed on top of the 10% rate, so the clarity of the true costs of administration would be affected. Why can t the direct costs be subsidized also? If a 10% administrative rate was given to Special Offerings, the subsidy would cost PMA $500,000, which would reduce the $2.4 million in unrestricted funds which could be used to compensate the departments that will be most impacted by the transition to a flat rate. The added direct costs for Special Offerings is estimated to be $2.1 million in This includes $1.0 million in management (personnel and fixed costs) and $1.1 8/27/17 Overhead Ministerial Team Report Page 5 of 7

6 million in promotional expenses, which vary by offering. Even if the agency-wide flat rate was raised to 23%, the use of restricted program funds to cover these direct costs may be seen as an inappropriate use of designated funds. Thus, how Special Offerings are administered and how their administrative costs are covered need further analysis, not only to provide better support to these important offerings, but in order to preserve the covenantal relationships with the different levels of the church who support this effort. More open explanation of the cost recovery rates will be a first step, though they may lead to negative response by the donors. The analysis of different scenarios, and the impact on donor and church perception on how Special Offerings are managed, could not be accomplished by this Ministerial Team in this time frame. 8. Consistent Staff: The PMA staff has evolved over the years so that certain administrative functions such as financial management report to program staff in some departments, where other departments use common services staff. This results in inconsistent treatment of the real costs for administration, since administrative staff within program staff are not counted in overhead costs. It is unclear the impact of these inconsistencies, and there may be important reasons for the staff of particular departments to be structured this way. If the PMA adopts an agency-wide flat rate for cost recovery, the inconsistencies in staff structure may not be as problematic. 9. Interagency Coordination: There are several issues perceived with the current six-agency structure for the national church. There is a fact sheet (see attached) from the All-Agency Review Committee that highlights issues raised in 2008 and Overhead costs have been used in the midst of these inconsistencies and challenges. For instance, PC(USA) A Corp actually consists of PMA and OGA together, and much of the funds used for administration of the Presbyterian Foundation are raised through the large holdings which PMA is required to invest with the Foundation. Because of the complexity and the direct-services nature of PMA ministries, the overhead costs will by necessity be higher than costs associated with more focused ministries such as the Presbyterian Foundation or Presbyterian Investment and Loan Program. Because the administrative costs for other agencies seem to be lower than for PMA, at least one ministry program has requested to be transferred out of PMA, even though PMA is supposed to coordinate all mission and ministry programs of the Church. Coordination of mission should not be impacted by lack of interagency coordination and mutual support, or implemented through financial calculations. Because there are already multiple groups assigned to the review of interagency coordination, the Overhead Costs Ministerial Team did not believe it beneficial to inject itself into this venture. Logistics, if applicable: 1. Budgeting Process Adjustments: Project Begins: Fall 2017 Project Ends: Spring 2018 for Budget Financial Implications: Minimal initially; may impact support services spending over years. 2. Flat Rate: Project Begins: Fall 2017 begin consulting with Ministry Areas on implications Project Ends: Spring 2018 for Budget, if constituents agree Financial Implications: None for PMA overall; up to 6% for some departments. See analysis. Note that the analysis assumes that the implementation of a flat rate will not make an impact, positive or negative, in PMA donor contributions in the near term. 8/27/17 Overhead Ministerial Team Report Page 6 of 7

7 3. Overhead Communications Policy: Project Begins: Fall 2017 Project Ends: April 2018 Financial Implications: None 4. Overhead Communications Strategy: Project Begins: Fall 2017 Project Ends: Following 2018 GA Financial Implications: Total Cost: TBD; most communications will be electronic Follow-up to be Done: 1. Additional considerations (items 6-9 above) be considered by possible future Ministerial Teams, the Leadership Cabinet of PMA, and Way Forward Commission and All-Agency Review Committee, as relevant. 8/27/17 Overhead Ministerial Team Report Page 7 of 7

8 19% Analysis of Change from Different Cost Recovery Rates for each Ministry Area to a Flat Rate of 19% The graph below shows the effects of changing to a 19% flat cost recovery rate for all areas. Nineteen percent represents the percentage of total administrative costs compared to program costs in the 2017 Mission Agency budget. This rate would yield approximately $2.4 million more in restricted funds to be used for support costs. The Board of Pensions and Jinishian rates would remain the same since these were agreed upon rates. Theology, Formation and Evangelism have two different rates as these were formally two different ministry areas that were combined. Cost Recovery Rates Progression of Admin Rates Budget Cycle Rate % % % % The progression of rates and increases of support costs reflect the increase in funds development costs and the increase in shared expenses for the replacement reserve fund. 19% Flat Rate Percentage Increase Current Approved Rates 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 4% 12% 13% 19% 16% 15% 11% 5% Christmas Joy- BOP 7% Compassion, Peace & Justice 6% Theology, Formation, Evangelism Theology, Formation, Evangelism 3% Curriculum 4% 8% Racial Ethnic & World Mission Women's Ministries Jinishian Impact on Ministry Areas The current cost recovery rates allow for $5.2 million to be used from restricted funds to support administrative and overhead costs in the PMA budget. If the rate is changed to a flat 19% rate, an additional amount of $2.4 million could be used. The additional funding would come from restricted funds that are assigned to the ministry areas. This shift in funding would free up $2.4 million in unrestricted funds. - 41, , ,441 Approved Budget -Amounts Used from Restricted Funds for Support Costs Change to a 19% Flat Rate - Additional Amounts available for Support Costs 683,478 1,285,959 Jinishian World Mission Racial Ethnic & Women's Ministries Curriculum Theology, Formation, Evangelism Compassion, Peace & Justice - Christmas Joy BOP - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 The additional amount of $2.4 million would be used to support the following areas. Impact on Support Areas Annual Budget 4,807,994 2,340, , , , , , , , ,940 2,163,059 1,217,024 1,797, ,624 1,946,201 1,403,409 Approved Budget -Restricted Funds used for Support Costs Mission Engagement & Support Communications Human Resources Research Services Risk Management Legal Internal Audit Executive Director Shared Expense Investment Management Insurance Presbyterian Distribution Services Finance & Accounting Mail, Print Services Information Technology (IT) Facilities 30,088 50,146 40,117 36,983 42,096 42,096 70,204 75, ,034 Change to a 19% Flat Rate - Additional Amounts available for Support Costs 145, , , , , , , , , , ,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000

9 PRESBYTERIAN MISSION AGENCY BOARD April 27-29, 2016 All Agency Review Committee ITEM P.204 INFORMATION ITEM All Agency Review Committee Fact Sheet Short name: All Agency Review Committee Formal name: Committee on Review of Whole of the PC(USA). Long formal name: Review committee to review the service of the whole of the Presbyterian Church (U.S.A.) and its six agencies in implementing the General Assembly s mission directives History: Created by GA in 2008, as part of the recommendation of that year s Presbyterian Mission Agency (then General Assembly Council) Review Committee. Frequency: scheduled to take place at the conclusion of a full cycle of agency reviews, every 8 years OGA and PMA reviews Review of the Whole of the PC(USA) PPC and PILP reviews BOP and FDN reviews OGA and PMA reviews Review of the Whole of the PC(USA) (scheduled) PPC and PILP reviews (scheduled) BOP and FDN reviews (scheduled) OGA and PMA reviews (scheduled) Review of the Whole of the PCUSA (scheduled) Rationale from 2008 for creating this review of the whole: While the separate review of each of the six agencies is a helpful practice and has fostered improvements, this Review Committee observed that no one in the current system is charged with looking at the overall effectiveness of the whole. Coordination among the six agencies is voluntary and not always effective. Such a review should focus broadly on the effectiveness of the six agencies and other governing bodies in implementing the General Assembly s mission directives and should not duplicate the more detailed work of the individual agency review committees. Particular attention should be given to how or if these agencies work cooperatively and where or if there is duplication of services in the system. This review committee observed that some agencies are not working well together, but also that there are some beneficial cooperative efforts. These happen on a voluntary basis with no recommendation that this occur regularly throughout the system. This review committee also heard some people questioning the rationale for the separation of the PMA and the Office of the General Assembly (OGA).

10 (Minutes, 2008, Part I, pp )The mission of each agency is aligned with the goals and values of the overall mission of the PC(USA) as set by GA directives. B. The agencies have leaders at key positions who set the vision, direction, and culture of collaboration as a strategic priority. C. The agencies press beyond communication and consultation to genuine collaboration and, where appropriate and/or directed by GA, agree to shared agendas and work together toward fulfillment of shared goals. Individual agencies avoid unilateral decisions, made without consultation and collaboration, which affect all agencies and the whole church. D. Each agency maintains open and regular communication with, and provides timely and appropriate access to information to, other agencies and PC(USA) constituencies, including MGBs. E. The agencies are aware of agreed processes for problem-solving and non-adversarial dispute resolution within the structure of the PC(USA). F. Each agency has conducted a thorough evaluation of the potential gains and risks associated with collaborative endeavors. G. Agencies show clear evidence that they collaborate in a spirit of mutual appreciation, trust, and respect with shared understandings of the nature of their collaboration. H. Agencies seek pragmatic solutions to their respective operational challenges by relying on the assets, resources, and strengths of other agencies. I. Agencies deliver inclusive communication resources (printed and electronic) that meet accessibility standards. Accessibility standards include, but are not limited to: awareness of audience s level of familiarity with content of communication; facilitation of the reader/listener/observer s easy navigation through information; appealing and attention-grabbing resources; and comprehensive information that provides clues for follow-up and referral (i.e. links to other agencies). Recommendations from the 2010 Review: The Review Committee sees a desperate need for the Presbyterian Church (U.S.A.) through the General Assembly and its agencies, as well as other governing bodies to enthusiastically claim its identity and clearly define its mission. It is not our task as a committee to do this. It is the task of the whole church, a task of discernment, grounded in worship, study of Scripture, and prayer. This is a task that never ends, for which the General Assembly can and must provide leadership. Once we claim that identity and our particular mission, however timeless or time-bound they may be, we need to clearly, creatively, and expansively communicate them to the whole church so that all can joyfully and effectively work together toward accomplishing the work of God s kingdom entrusted particularly to us, here and now. It is our hope that such unity rooted in our identity in Christ and such a clear call to mission shaped and sustained by the Spirit will glorify God, renew the PC(USA), and attract others to be a part of what God is doing in and among us. To such ends, we humbly make the recommendations that follow this prayer by George MacLeod, founder of the Iona Community, cited in Christ of the Celts: The Healing of Creation by J. Philip Newell (Paulist Press, 1997, p. 92):

11 Give us grace in our changing day To stand by the temple that is the present church, The noisome temple The sometimes scandalized temple that is the present church, Listening sometime to what again seems mumbo jumbo Make it our custom to go Till the new outline of your Body for our day Becomes visible in our midst. A. There is good and sufficient reason to keep the six agencies as separate but interrelated entities. Based on data gathered through conversations with agency leaders, a survey, conversations with middle governing body leaders, and its own deliberations, the Review Committee perceives neither a compelling case nor an obvious will or desire for serious structural reorganization of General Assembly agencies. The Review Committee s conclusion is not intended to preempt or prohibit such considerations if and when they are deemed needed and appropriate, but the review does not lead us to such a recommendation at this time. That being noted, the Review Committee sees ways in which interagency collaboration can be improved, cases where there is a perception of redundancy that calls for better communication of the respective agencies peculiar and distinctive roles, and situations that may call for further delineation of responsibilities. B. There have been and continue to be good faith efforts for constant, cordial, cooperative, and collaborative ministry for the glory of God, the strengthening of the church s ministry and mission, and the good of God s creation. The Review Committee affirms these, and encourages both their continuation and continued development so that all agencies and governing bodies covenant together to cultivate and promote the spiritual welfare of the whole church. C. The Review Committee recommends that collaboration with other agencies and MGBs be included specifically as a standard or criterion for the periodic reviews of each General Assembly agency and of each agency head. D. The Review Committee recommends a review of and possible revisions to the Organization for Mission of the Presbyterian Church (U.S.A.) with attention specifically given to the roles and responsibilities of the General Assembly Mission Council and its Executive Director and the Office of the General Assembly and the Stated Clerk. Until such review and clarification takes place, the Review Committee recommends that the Stated Clerk, as the one agency head who is elected by the General Assembly, be affirmed by the General Assembly and its agencies as the one who speaks with one voice for the General Assembly and, as stipulated in the Organization for Mission, shall promote the harmony and efficiency of the General Assembly and its agencies in cooperation with the General Assembly Mission Council and its Executive Director, with special attention to relationships between General Assembly entities, and with synods, presbyteries, and sessions (Manual of the General Assembly, 2010,Organization for Mission, IV.B.2.n., p. 10).[See Item to the 219th General Assembly (2010).] E. The Review Committee perceives significant levels of confusion between consultation and collaboration. While good communication and sharing of ideas are valued, they are not in and of themselves enough. Beyond such consultation, commitment to shared priorities and united efforts to accomplish shared mission objectives are at the heart of collaboration. The Review Committee recommends that the Office of the General Assembly include in the agenda of each General Assembly a joint report from the six General Assembly agencies that documents their collaborative accomplishments.

12 F. Prime areas for new, continued, or increased cooperation and collaboration include: 1. Presbyterian Foundation/General Assembly Mission Council collaboration as documented in the report and in the Clay/Valentine letter included in Appendix III. The Review Committee affirms the progress noted in this letter and emphasizes the importance of continuing such efforts and progress through current and future leadership transitions. 2. To support and facilitate such collaboration between the Presbyterian Foundation and the General Assembly Mission Council, and to help resolve differences when needed, the Review Committee responds to Referral with the recommendation that the Restricted Funds Resolution Committee continue to function for at least another two years. [See Item to the 219th General Assembly (2010).] The Review Committee sees encouraging signs of progress in negotiating the complex relationship between the GAMC and the Foundation, but nonetheless suggests that, should clarification of roles become necessary, the Restricted Funds Resolution Committee consider obtaining a legal review from a qualified attorney related neither to the General Assembly Mission Council/Presbyterian Church (U.S.A.) or the Foundation regarding the relative responsibilities of the General Assembly Mission Council and the Foundation. 3. Commitments and efforts of the Foundation and the General Assembly Mission Council, through the appointed workgroup, for improved cooperation and collaboration between the two agencies. The Review Committee recognizes that this workgroup has particular and peculiar issues to address, and affirms the focus and intentions of the agencies and the workgroup. The Foundation/GAMC workgroup could be a model upon which all agencies create a workgroup that focuses on collaboration, or that commitment might be formally recognized as an objective of the current gatherings of chief executives and elected chairs from the six agencies. In one way or another, the Review Committee recommends the formal recognition that collaboration among agencies is a priority, for which all agencies hold themselves accountable. 4. The Review Committee received indications of dissatisfaction with the Foundation s investment returns and fee structure, as well as concerns about the Foundation s perceived emphasis on mutual funds. Apart from these management issues, there appears to be a more fundamental concern about how the Foundation views its funds development mission, or the limitations of that mission. The Foundation seems to view its role primarily as an investment advisor; whereas certain other agencies require or expect a more traditional fund-raising approach. The lack of a centralized approach to funds development among the agencies may be confusing and discouraging to potential donors. The Review Committee recommends that these issues be explored with the objective of achieving a more coordinated, collaborative, and cohesive approach to funds development. 5. As noted in Appendix III, there will be a convening of field staff of all agencies in January 2010, in Louisville. As the Review Committee prepares this report, it is with hope that the January convention will have a broad and inclusive agenda, focused on the recognition that all of the General Assembly agencies are in it together the positive and conscious realization that what each agency does is for the benefit of the whole church. The Review Committee notes with concern the manner in which the General Assembly Mission Council recently deployed regionally-based development associates to expand funding for General Assembly mission. While applauding the motivation of funding mission, the Review Committee recommends that the GAMC affirm a clear commitment

13 to, and together with other agencies take affirmative steps toward, collaboration that goes beyond communication between agencies and includes collaborative planning and funds development. This manner of collaboration is identified as important by all six agencies in their joint report (Appendix II), by middle governing body representatives, and by the General Assembly in its charge to the Review Committee. 6. The Review Committee recommends a meeting or meetings of agency heads and chairs to further focus on collaboration. This meeting should include an educational component on what collaboration really means and involves, as well as a critical assessment regarding obstacles to and opportunities for collaboration. The meeting or meetings should specifically address collaboration regarding funds development, communications, and church relations, all of which are identified as priority opportunities for collaboration in the report jointly submitted to the Review Committee (Appendix II). Agencies should consider use of a consultant to lead the meeting(s). 7. The need for more effective branding of Presbyterian Church (U.S.A.) and it agencies who they are; what they do; how they collaborate; and a sense of common identity and shared mission commitments among the agencies. G. The Review Committee recommends that a review of the whole of the Presbyterian Church (U.S.A.) and its six agencies, focusing broadly on the effectiveness of the six agencies and other governing bodies in working collaboratively to implement the General Assembly s mission directives, be integrated into the cycle of individual agency reviews. The Review Committee suggests that such a review committee be appointed by the 222nd General Assembly (2016) to report to the 223rd General Assembly (2018). [See Item to the 219th General Assembly (2010).] H. The Review Committee perceives a call and cry for a new way of understanding and being General Assembly, which includes: 1. Increased time given to worship, study, and discernment of who we as the Presbyterian Church (U.S.A.) are, who we are called to be, and what we are called to do, all done with the prayer that God s Spirit will unify, renew, energize, and mobilize the church for ministry, mission, and witness. This commitment of time to worship, study, and discernment will better prepare the General Assembly to wrestle with difficult and sometimes controversial, but nonetheless important matters that deserve and demand consideration. 2. More effective management of the amount of time and energy that the General Assembly commits to issues of legislation and policy development, so that increased time and energy may be given to the above focus. Such management may require a greater willingness of the General Assembly to allow prescribed work to be done and actions taken at committee level. 3. Increased attention given by General Assembly to mission prioritization, resulting in a manageable number of identifiable mission directives/priorities that are determined for the whole church, to which General Assembly agencies, middle governing bodies, congregations, and individuals can commit and cooperate. The Review Committee recommends that the General Assembly Mission Council and the Office of the General Assembly collaboratively guide and ensure such a process, drawing upon other agencies and resources as appropriate and as directed by Organization for Mission of the Presbyterian Church (U.S.A.) and commended in VI.D.

14 4. Clarification of who communicates, manages, and oversees the collaborative implementation of those mission directives on behalf of the General Assembly, a role and responsibility that the Review Committee sees residing with the Stated Clerk of the General Assembly in cooperation with the Executive Director of the General Assembly Mission Council (note the citation from Organization for Mission in prior item XIII.D. above). 5. Consideration of the feasibility and/or desirability of having one voice designated to speak for the Presbyterian Church (U.S.A.) and/or some entity designated to hold the church as a whole, particularly the General Assembly agencies, accountable for decisions and commitments made by the General Assembly. 6. The Review Committee recommends referral of these issues to the committee to be appointed by the 219th General Assembly (2010) to review biennial assemblies, recommending that the General Assembly include such review of the way we conduct General Assembly in the scope of this committee s work. [See Item to the 219th General Assembly (2010).]