UUA balances budget with cuts, $400K loan from endowment

The Unitarian Universalist Association will close a $1.3 million deficit in its current fiscal year through a combination of budget cuts, increases in projected income, and a $400,000 loan from the endowment, UUA leaders have announced.

The UUA Board of Trustees approved the revised budget, including the $400,000 loan from the endowment, in a special meeting August 7. The loan, which represents a fraction of the UUA’s $85 million endowment, will be paid back in the next several years through funds raised by the upcoming capital campaign, according to the Rev. Dr. Terasa Cooley, the UUA’s officer for Program and Strategy.

Balancing the budget did not require any staff layoffs. However, two longtime employees—the Rev. Stefan Jonasson, director of Growth Strategies and Large Congregation Support, and Wayne Clark, director of Congregational Stewardship—announced their retirements, and their positions will not be filled. Instead, their duties will be redistributed among other staff, which will generate considerable savings, Cooley said.

In addition, four full-time positions were reduced to part-time with benefits. The staff currently holding those positions were offered the option of continuing in these newly structured roles. Two of them, a Religious Education and Music Professional Development associate and a Raiser’s Edge administrator, have chosen to stay on in part-time positions. A program associate for Ministry to Youth and Young Adults of Color has decided to leave the UUA staff.

The fourth positions the UUA reduced from full-time to part-time is in the Periodicals office, which produces UU World and InterConnections, a monthly newsletter for congregational leaders. The UUA decided to discontinue InterConnections, which began as a free print newsletter for lay leaders in 1998 and became entirely electronic in 2009. Its editor, Donald E. Skinner, who is also a senior editor for UU World, announced that he will retire at the end of August.

Christopher L. Walton, editor of UU World and director of the Periodicals office, said that the InterConnectionsarchive—which contains hundreds of practical articles on congregational leadership—will remain a vital resource on the UUA website. “From the beginning, InterConnections was designed to be relentlessly useful,” Walton said, “and its archives will continue to be just that.”

The UUA’s strategic goals guided decisions about budget cuts, said the Rev. Harlan Limpert, the UUA’s chief operating officer, including shifting some functions from the central office to regional offices so that they are closer to the congregations they serve. The UUA will also shift from live meetings to more teleconferencing, which will not only reduce travel budgets but also support the UUA’s focus on reducing its carbon footprint, Limpert said.

“What we’ve tried to do here, and I think we have successfully done, is use the budget challenge as an opportunity to continue the strategies we’ve put in place during [UUA President] Peter [Morales]’s administration to push the support of congregations closer to congregations, and to continue growing our movement,” Limpert said.

The deficit for fiscal year 2014, which was about to close, and fiscal year 2015, which began July 1, became apparent just days before the start of the 2014 General Assembly in June, when some major gifts promised to the UUA did not materialize. The UUA board set a deadline of August 1 for the leadership council to propose a revised budget for FY2015 to reflect lowered expectations for major gifts. The council—made up of the UUA’s senior staff—met throughout July, in person and via phone, to discuss options, said Limpert. In a special teleconference meeting August 7, the board accepted the revised budget in its entirety.

The $400,000 draw from unrestricted funds is a loan that will be repaid, Cooley and others said. The loan “allowed us to take the long view in our deliberations and avoid making decisions that would bring temporary or great harm to the excellent work, the innovation, and the momentum that is part of our Association,” said Morales, in an August 13 email to staff.

Limpert said UUA leadership is putting systems in place to avoid a similar shortfall in major gifts in the future. The board, for example, will be tracking UUA income “very, very carefully.” The UUA is also working to increase the success of its fundraising efforts. “In the past, the board has not had any role in fundraising whatsoever,” Limpert said, but “will take a very active role in fundraising in the coming year.” Moreover, the leadership council has only had a modest role in stewardship but will have “a more active role,” he said.

Asked by a staff member whether the UUA leadership is putting systems into place so that an endowment loan won’t be required in the future, Limpert said, “I can assure you we believe the current budget, as adjusted, is sustainable.” He added that the administration has confidence in the UUA’s newly appointed director of Stewardship and Development, the Rev. Mary Katherine Morn, and reiterated that the board and entire UUA staff will be “even more engaged in stewardship and development” than in the past.

Financial Adviser Larry Ladd, a member of the Board of Trustees, had in June urged the board to stop approving major gift income in the operating budget. “Running a deficit three years in a row isn’t a good idea, any way you look at it,” he said after the board’s August vote. (The 2013 fiscal year also ended with a small deficit from a shortfall in major gifts.) “But I accept the administration’s views that further reductions necessary to achieve a balanced budget would be short-sighted and that more time is needed to plan effective and strategic reductions.”

Among the adjustments to the FY2015 budget:

• The administration is asking the General Assembly Planning Committee to provide a $50,000 subsidy for UUA staff travel to GA, to offset a small portion of the costs which in years past have come from UUA staff budgets.

• The UUA board will make $50,000 in cuts to governance expenses, including reducing the number of in-person meetings for boards and committees in favor of relying on videoconferencing and other technologies.

• UUA Bookstore revenue projections have been increased by $20,000, and the UUA is hiring a merchandising consultant to help improve sales. The bookstore had “its best year ever” this year, Cooley said, expanding its offerings with UU and “Standing on the Side of Love” apparel, stickers, and other items.

• Travel budgets will be reduced, and a new policy is being developed to standardize subsidies for Internet and cell phone costs.

Cooley met with staff in Boston on August 15, and she and Limpert hosted a teleconference with off-site staff on August 19 to discuss the revised budget. Several people in attendance made a point of thanking Limpert and Cooley for holding the meetings and being forthcoming about the new budget.

In other business at the board’s August 7 meeting, the board appointed John LePann as a member of the Investment Committee and Ted Fetter as a member of the Journey Towards Wholeness Transformation Committee. Both were appointed for terms to run through General Assembly 2015, with the possibility of reappointment to three additional two-year terms.

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