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[Back to index of July 2008 articles] Cathedral Forced to Make Difficult Financial Choices By Lucy Chumbley After a golden centennial year, Washington National Cathedral has had to turn its attention to some sobering financial challenges. On May 15, just days after the culmination of the 100th anniversary celebrations, 33 Cathedral staff members were laid off. Budgets have been pruned in all departments, and a number of programs have been “paused” due to a funding shortfall. The decisions follow “month after month of careful deliberation” said Dean Samuel T. Lloyd III, and will trim $3.2 million from the Cathedral’s FY 2009 budget, which after the reductions stands at $24 million. The focus for this fiscal year, which began July 1, he said, is to be “financially responsible; to focus our programmatic life on things that we think are core.” Staff reductions came from across the board, with most positions cut from the Cathedral’s retail operations, in particular from the Greenhouse, which was closed at the end of June. The School and Family Life program was suspended and three staff members were relinquished. The Rev. Christiana Olsen – who was called as the new Canon for Community Life just over a year ago – was let go; as were several administrative staff, two part-time receptionists and two staff members at the Cathedral College. Other vacancies will be left unfilled: The Rev. Howard Anderson, who this month steps down as warden of the Cathedral College to become rector of St. Matthew’s, Pacific Palisades in the Diocese of Los Angeles, will not be replaced. (Lloyd will serve as interim warden for the next year). Also not being replaced is the Rev. Eugene Sutton, the Cathedral’s former Canon Pastor who was consecrated last month as Bishop of Maryland. Other budget paring decisions include earlier closing hours on Mondays, Wednesdays and Fridays; a “pause” in the Summer Music Festival, which lost money last year, and a switch from daily to thrice-weekly cleaning in the administrative buildings. The Cathedral also has increased its suggested visitor donation from $3 to $5. “That was the decision we made and I think most people feel like it’s working,” said Julie Cooke, director of visitor programs and volunteer services. “We also have a little scholarship program and we’re never going to turn someone away because they can’t pay.” “None of these things we’re trimming now were things we wanted to step back from,” Lloyd said. “These were hard decisions to make.” He stressed that the layoffs were all made for budgetary and strategic reasons: “None of it was based on performance. They were all very good people.” How did this happen? “It was a confluence of factors,” Lloyd told a recent gathering of about 70 volunteers, National Cathedral Association and congregation members at one of several Town Hall meetings where he and other senior staff took questions. “My calling was specific,” Lloyd said: “To determine a new vision for the Cathedral and what it could be.” Lloyd began this work by holding “wide-ranging conversations” with Chapter members, current and former leadership, numerous clergy and laypersons from around the diocese and others. He then appointed a 35-member Strategic Vision Committee, which met for eight months. The panel’s completed work, “A New Century, A New Calling,” was published in January 2007 and charts a strategic course for the Cathedral as it enters its second century. The vision document sets out broad goals: to be a voice of generous spirited Christianity; a place of reconciliation; and a people serving a broken world. “We developed a vision and the next thing we do is to try to implement it,” Lloyd said. The Chapter’s investment provided start-up funds to “try some new things” and “made it possible to do some things it might not otherwise have been possible to do,” he said. This included the establishment of the Center for Global Justice and Reconciliation; the hiring of a Canon Missioner to strengthen ties within the city; and the decision to bring in a Canon for Community Life to help build a worshipping community. The Cathedral College also offered a number of new courses that supported this expanded vision. The Dean and the Cathedral Chapter fully understood that these funds were finite, and that some programs would have to be cut at the end of the three-year period, Shenefield said. “But what we didn’t know is that there would be a couple of other things.” Hopes were that revenue would rise as the strategic funds ran down, thereby lessening the impact of the transition, he said. But for various reasons, this did not happen. The stock market plunged, and with it the Cathedral’s endowment, Shenefield said. Tourism fell off, partly due to the extended construction of the Cathedral’s new parking garage – which took two years to build and also claims $800,000 a year from its budget – and retail numbers have been “unattractive.” The Cathedral’s budget was also affected by its absorption of the Cathedral College, previously the College of Preachers. The College merged with the Cathedral in September 2004 for financial reasons – it had been carrying a deficit – and to expand the scope of its programming. “Educational programs are rarely financially profitable,” said Cathedral Chapter member Paul Cooney, the diocese’s canon to the ordinary, adding that the College offers relatively small classes to a mostly clergy audience that is not able to pay large tuition. “Yes, we did anticipate [the shortfall],” Shenefield said. “But there were a lot of factors that made it more dire than we could predict.” Looking to the future The FY 2009 cuts were made to “position the Cathedral to live within a balanced budget; to live within its means,” said Andrew J. Hullinger, associate dean for administration and finance, at a recent meeting of the Diocesan Council. But, he said, Washington National Cathedral remains a strong and vital institution. There also are some encouraging trends: Giving has gone up 35 percent in two years; attendance at the 11:15 a.m. Sunday service is up 50 percent from last year; and the Cathedral’s new worshipping congregation already claims more than 500 members. Lloyd’s new Sunday Forum “to discuss the intersection of faith and public life,” has been a great success and will continue, as will signature events in the nave like Sacred Circles. The Cathedral College is “engaged in a process of re-envisioning” Hullinger said. “The College is absolutely on our minds and part of our strategic vision, going forward.” “There’s a feeling of energy and hopefulness going on despite the challenging decisions we’ve had to make,” Lloyd said. “The Cathedral is at a very strong point in its life with an important vision and a superb staff and a commitment to being an embodiment of the Gospel to the city and country. This year brought some financial challenges, some anticipated, and – due to the economy – some not. We made some difficult decisions this year with the conviction that those decisions will enable us to move forward vigorously from here. “We are not at a crossroads. This is a time of pruning. It’s a time of necessary pruning so we can grow deeper and stronger as we move into a second century.” How is the Cathedral funded? Washington National Cathedral, which has a $24 million budget for FY 2009 (down from $26 million in FY 2008) has five primary sources of revenue. These are: 1. Endowment and investment earnings: The Cathedral has an endowment of approximately $66 million, the use of which is governed by Protestant Episcopal Cathedral Foundation policy. It draws about 5.25 percent in annual interest, which resulted in an income of $3 million in 2008. Investment earnings bring in about $500,000. 2. Retail operations: Retail operations are expected to bring in $4 million in FY 2009. 3. Programs: Concerts, courses, lectures, tour bus programs and the like are projected to bring in $3 million in FY 2009. 4. Unrestricted contributions: The Cathedral received $600,000 from Sunday plate offerings last year; and $400,000 in pledges from its new worshipping community (the congregation’s first year). It also received $3.5 million in gifts through the fundraising department. 5. Restricted gifts: The cathedral received $9 million in gifts last year to be used to support specific programs, including The Education for Excellence Program (TEEP) and the Center for Global Justice and Reconciliation. Goodbye to the Greenhouse As part of its FY 2009 budget trimming measures, the Cathedral closed its 58-year-old Greenhouse at the end of June. “We expected disappointment and maybe an angry e-mail or two,” said Dean Samuel T. Lloyd, expressing his surprise at the force of the public reaction. “What we didn’t predict was the passion people felt for it.” Community members quickly put up a Web site, www.savethegreenhouse.org, which at press time posted more than 1,000 signatures on a petition to “Save the Greenhouse.” “The Greenhouse is – it’s contentious,” Hullinger said. “We made the decision to close it. It has not been a moneymaker for us for many years. We’re now working with our neighbors who are probably most impacted by it.” Responding to questions at the June 19 Town Hall meeting, Lloyd said the Cathedral is committed to continuing to serve the city by maintaining its various green spaces – the Olmstead Woods, the Bishop’s Garden – “at considerable expense to us.” But, he said, it could no longer afford to support a “plant retail operation” that had been losing money. “They’re hard decisions at a difficult financial moment,” Lloyd said. “There are pauses all around as we try to keep the energy and try to determine where we’ll go from here. “The strongest lesson I’ve taken from these last few weeks is the importance of communication and how much we have to learn.”Lucy Chumbley is the editor of Washington Window, the newspaper of the Episcopal Diocese of Washington. [Back to index of July 2008 articles]
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