Concerned about the example that it would be setting for the rest of the Episcopal Church if it authorized a potentially unsustainable payout from endowment funds for the 2007-2009 budget cycle, Executive Council members, in a close vote, lowered the payout ratio to 5 percent from the 5.5 percent rate that applies during the 2003-2006 triennium.

The reduction will result in approximately $1 million, or 10 percent less being available from investments, explained Tony Minopoli, an investment advisor with Evaluation Associates, Inc.

“If you really strip away everything, the question is do you want to forward spend assets today, hoping that things will improve or do you want to preserve the principle,” Mr. Minopoli said in a plenary presentation on the opening day of the June 13-16 meeting in Louisville, Ky. “Adjusting [the payout ratio] downward would preserve the principle.”

Council employs a five-year rolling average on the income from its $270 million portfolio to calculate the amount available for the General Convention program budget in a given year.

Mr. Minopoli explained that that the rolling average evens out peaks and valleys in the market. From 1995-2000 the markets provided a very high rate of return and the 5.5 percent payout did not affect the principle, but very few market forecasts are as optimistic for the near term future.

Failure to reduce the payout ratio would set a “contrary example” to the many dioceses which have sought to educate their individual parishes about the prudent use of their own investment portfolios, said N. Kurt Barnes, treasurer and chief financial officer at the Episcopal Church Center. Council might be perceived as treating the Church’s endowment as the “‘rich guy’ who will plug holes in the budget,” he said.

Council also resisted a number of revisions to the language of the mission priorities used in budget building for the next triennium. The priorities received substantial support from those who responded to a survey council had conducted. The amendments did not seek to change the priorities, but clarify them.

In speaking against the amendments, other council members said the priorities had only been employed for one budget cycle and the explanatory language was the result of substantial work and changing it now would only cause confusion. The priorities are: young adults and youth, reconciliation and evangelism, congregational transformation, justice and peace, and partnerships with other Anglican Communion provinces, as well as relationships with ecumenical and interfaith partners.

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· Episcopal-Lutheran Agreement Going Strong

· Dean Presler Leaving ETSS for General

· Third Straight Year of Attendance Loss Likely

· Virgin Islands Bishop Consecrated

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