The news has been crowded with claims of piling on costs on disaffiliating churches and chants of “just let us leave!” repeated in Annual Conference chat rooms. But do the numbers match the rhetoric?
A drastic shift in exit costs
Up until the 2019 General Conference, the common calculation for United Methodist churches to leave the denomination is that they would have to buy their church property from The United Methodist Church. That heavy cost was enough to chill tempers and keep churches in the fold as cooler heads prevailed over the years.
But since 2019, the General Conference approved a new policy that churches have been able to disaffiliate from The United Methodist Church by paying only particular liabilities (“exit costs”) to the annual conference. Each conference is different, but usually it is a combination of recent unpaid and current apportionments, unpaid pension liability, and other specific costs (like repayment of recent loans or grants, etc).
Traditionalist churches seeking to leave The UMC have made a big stink about how much money it is. But is it…really? And if not, who does this complaining benefit?
By the Numbers
We now have hard data to look at, so let’s look at Western North Carolina Conference, which for each disaffiliating church helpfully listed their exit costs paid to the Annual Conference. It made for a fascinating chart that a WNCC colleague made and sent to me. Here’s the chart, click to expand.
For example, Lafayette Street UMC in Shelby, NC has (these are 2019 numbers) 380 members and average worship attendance of 108. If Lafayette Street had disaffiliated prior to 2019, it would have had to pay out a minimum $1,623,567 to own their property. That money would have gone to the annual conference for the purposes of planting new churches and other development projects.
But after 2019, as noted above, that minimum payout changed, and we see in 2022 that they paid just $139,029 in exit costs. That’s a significant cost for this local church—just over half their annual operating budget—but it is only 8.6% of the previous cost.
After generations of United Methodist money and investment into that local church on Lafayette Street, that $1.6m was given away and only $139k was taken in. To put it into financial terms, the ROI to the congregation was 1168%, whereas the ROI of Lafayette Street’s property to the Western North Carolina Conference was…well, .086. Yeah!
And still the Traditionalists complain about such an incredible deal. Is it really a bad deal here? Or is it just a bad deal…to the megachurches?
Posturing benefits large churches
The numbers above show that disaffiliation is within reasonable reach of most small churches. Who we assume it hurts most is the megachurches, which have large apportionments and more clergy on staff, which increases the exit liabilities. But is that true either? And if not, are they simply using their larger platforms to amplify their self-serving concerns [insert shocked face emoji]?
Let’s look at another Western North Carolina church that has expressed an intent to leave, but a much larger one this time.
Good Shepherd UMC in Charlotte, said that they intend to exit The UMC at some point but did not disaffiliate this year. The average of the disaffiliating churches this year was paying 9.4% of their property costs. In 2021, Good Shepherd’s property value was $16m million dollars (conference journal PDF link), of which a similar exit cost would be about $1.5m. That’s it, a bit more than one-third of their yearly operating costs. Good Shepherd also has few pensioned United Methodist clergy on staff, so fewer pension liabilities than you might expect from a more connectional megachurch.
Of course, that’s an average and an estimate, so it likely is much higher. But they have already withheld the money. Good Shepherd has withheld all or most of their apportionments for years. I estimate the money they have withheld from The United Methodist Church over the past seven years at $1.5m. Yes, 1.5 million dollars! They could have almost bought Lafayette Street UMC outright! I’m not saying they have intentionally saved that much as a war chest to pay their exit liabilities; I’m saying they have withheld that much already from The United Methodist Church and that is money they should have paid already, so only the costs beyond that $1.5m are real costs to the congregation.
So now we might see why large churches are advocating to stay in the denomination until the deferred to 2024 General Conference. The megachurches are the ones that benefit the most from (1) getting out early, before the conferences added on other liabilities (we saw that with many WCA leader’s churches…huh…) and (2) waiting until the end, having hoped to negotiate a better deal. And all the while, withholding apportionments so they aren’t contributing to the annual conference anyway.
The Last Year for a Cheap Exit
This is just one conference as a case study–other annual conferences have wildly different policies and costs. But the most dramatic swing in exit costs is coming at the end of next year.
The 2019 disaffiliation legislation has a time limit: churches must leave The UMC by the end of 2023 to have this new pennies-on-the-dollar rate. Given that votes must be taken at annual conferences, local churches that want to disaffiliate will need to start the process this year (2022), and meet the 2023 annual conference deadlines.
Otherwise, come the end of December 2023, annual conferences are not bound by the pennies-on-the-dollar rate, and can return to recouping their entire investment in these churches and communities. WNCC gave away $11.8 million dollars in property for $695k. Imagine what they could have done with an extra $11m for church planting and development! This fire sale won’t continue.
Local churches would be fools to not take advantage of it, and to begin to invest in whatever denomination will have them, and allow the UMC to begin to reshape whatever is next. Staying in only allows your Megachurch buddy to advocate to pay less for themselves–and it is unlikely they will share any savings with you.
Your Turn
Thoughts?
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It is interesting to read the reports from the smaller churches that wish to leave. This list is the first of many published I hope. I will be most interested to read about larger churches and the arrangements made. When we say it isn’t about the money, both sides seem to be smirking a bit when those words are uttered or printed.
I contend that it should be extremely easy to leave and we wish each other well. Somehow, God will find good to come out of all of this mess. In the meantime, we move forward…..with kindness please.
Thank you for this interesting, analytical perspective.
It seems the piece that Smith missed is the local community’s investment in the property and ministry. I’m not sure how you quantify local support into the ROI analysis. In most cases, someone donated the property, or the conference purchased it with donated funds. And in almost all cases, local donors developed and maintained the property. The conference support is often less tangible and can’t be measured in terms of real property alone. The vetting of clergy, the leadership support, the defined liturgy, hymns – and the connection. Those items are so much more difficult to put a value on, and I would expect that they amount to more than the current market value of the real property.
I appreciated the commentary on non-payment of apportionments by one mega-church. I find it a travesty that “conservative” and “traditionalist” churches seek to conserve certain aspects of the Discipline, yet do not pay apportionments, or that leaders have, in general, refused to participate in Conference leadership teams, i.e., the connection.
Clearly things are broken, and there is so much anger and animosity in the midst. I pray that paragraph 2553 helps create a settlement in the most peaceful way possible. I pray that those who wait in hopes of a better deal can remember their calling to serve God, not a church, not money, not an Annual Conference.
The Church I attend has been around since 1855. The congregation bought the property, built the Church, as have maintained it at our cost. The UMC also added
Conditions such as insurance etc. The local membership pays for all. We have never received money from the UMC. Paid all aportionments on time. The money flows from the bottom to the top at the UMC. Rarely the other way. So now the congregation has to buy the Church again?
Did your Church disaffiliate? The one I attend disaffiliated. Cost over 200K. I know of another that paid over 250K to disaffiliate. I’m not a member yet. Our church building is over 70 years old. Many members over 60.
It is quite probable that you are mixing “replacement value” which is important for insurance and “market value” which is the amount that someone would actually be willing to pay for the real estate.
Ask your own Conference Board of Trustees about a comparison between the value listed in statistics and the actual purchase price for churches they have sold in the last number of years. Don’t be surprised if they rarely coincide.
Of course, that doesn’t even touch on the higher question of what the Conference should be entitled to for even that market value for properties that were built without any Conference funds.
I am pastor of a very small rural church with about 14 people on Sunday morning, all but 2 over 70.. The deed was made to the Methodist Church (not UMC) in 1850 and the Conference does not have any part of it. Our full financial asset as of December 2021 when we sent in our report was $12,800 including a fund to build a parking lot which we’ve been saving for years and the Sunday School money. They are demanding $11,100 from us – 90%, not even enough to pay our insurance for a year.
We can’t seem to find how we became UNITED Methodist or what we agreed to. I’ve been there as a Local Pastor for 24 years and will disaffiliate and stay with them no matter what they decide to join or stay independent. I get no insurance or pension. And the one time the church applied for a grant for a new roof, we were denied. The local Assembly of God Church put on our new roof and gave us insulation as well. The only thing the UMC ever did for us was assign me there after they had 40 years of seminary students.
Can anyone tell us if there is a way to not have to pay those horrible fees – pension over $7,000 and an extra year of apportionments when we will no longer be members. To the entire church-and their pastor- these demands seem un-Christian and pharisee-acle.
Agreed, This is almost if not exactly a fraud scheme purpitrated againt the faithful church attendees. No wonder people have left the churches by droves. The UMC and others might want to reexamine the reason churches want to divorce them. Jesus would be flipping the tables over in the conference meetings and striking the leaders off their asses and blinding them like Saul. Fully disgusting!
We have a rural church in existence for 150+ years. Long before UMC was around. We were a circuit church. We are leaving for various reasons. We got out because they never even recognize us, nor help us in any way. But they want our money! We got out cheaper than I thought we would. We still have to settle up on our parsonage, keep us in prayer that they won’t want it either. We’ve had the upkeep on it for 50+ years, but with property values, who knows?
I, also, belong to a very small rural church with most of the congregation in their 60s and older. Look up videos on YOUTUBE by Dalton and Tomich, phone #: 313-859-6000. Mostly according to state law and UMC trying to get as much EXIT FEES as possible from each church. May GOD bless
I agree with your comments. Church members planned, built and paid for our church properties with very little financial, if any help from umc. This is blackmail!
I hope you were able to get help you needed. Our church disaffiliated.
The author apparently believes the conferences built, improved and maintained the churches and properties. That may be true in some cases, but definitely not the case in our church. Our families built the church in the late 1800’s and funded each and every improvement. Same for the attached parsonage.
We definitely shouldn’t have to pay for our properties TWICE just to depart from the UMC denomination when they continue efforts to change and ultimately refuse to enforce the Book of Discipline.
I agree 100%, as our congregation has said the same thing. Why do we need to pay twice for the property/assets when the local church pays for all the maintenance of the properties. When asked if there was another provision available to use other than paragraph 2553, which defines churches leaving the denomination as homophobic, the reply was paragraph 2549. Close the Local Church and the denomination takes possession of all the assets and any funds related to selling the properties and assets. The UMC Leadership has lost the focus of following Christ and is more worried about social justice. We want to disaffiliate based on the turn in theology beliefs and the blatant disrespect to follow the Book of Discipline. Leadership says they follow it, but their actions clearly do not follow it. There a numerous cases when you read paragraph 161 and what it says we need to follow as a community and what Leadership states to the public is completely 180 degrees opposite of the book says we need to follow. It disgusting and this “mob” mentality has to stop. It will be interesting when their day to meet God happens and they need give an explanation of their life how that will pan out.
Our church is afraid of the conference closing our church. As they almost did one year but thank goodness we had someone that knew our rights. Now we are thinking of leaving but wonder how much we will have to pay. Our church is insured for a million because of our windows. But our building is old. We have maintained our building ourselves.
The costs may be reasonable in some areas, but when we got our numbers, in addition to the apportionments, we have to pay $34K in pension liability and $6K in legal expenses (for the conference). That may not seem much, but we only have 35 members, our church is over 100 years old, and the UMC has put in zero toward any of our property. In the 1940’s, the church was non denominational and only joined the UMC because they were having difficulty finding pastors. Now with the pastor shortage, they would close us if we hadn’t found our own. The amount they want is almost double our yearly budget and it isn’t our fault that they have decided to jump on the band wagon if the world instead of following biblical guidelines for church leAdership. I feel trapped, a prisoner with no way of escape. And this is supposed to be a church …. I don’t understand why they can’t just let everyone make their choices and deal with the consequences for those choices. THEY should have consequences too. But my emotion is showing too much, so I will end now. Thank you for providing a place for me to speak my mind on this emotionally rich subject.
What do you believe if not God’s word?
Please tell me = Does the local church own the property or does it have to be purchased from the United Methodist Church?
“c) Property. A disaffiliating local church shall have the right to retain its real and personal,
tangible and intangible property. All transfers of property shall be made prior to disaffiliation.
All costs for transfer of title or other legal work shall be borne by the disaffiliating local
church.”
Why has there not been a class action suit to fire the leadership who did not follow the Book of Discipline or more importantly the Bible directives? If these corrupt leaders are bent this way, create their own “community center club”. What becomes of the UMC next if sun continues? Temple prostitutes, pedophilia, drag worship?
Drag worship is already happening. One down, two to go….