Channing Memorial Church Year of Decision 2006-2007 Congregation Discussion 3 Expenditure/Income Analysis ~ Questions and Answers about the Analysis

1. Why did you assume we were to remain here at 135 Pelham Street? Why didn't you consider moving to another location?

Answer: While some have indicated a desire to rid ourselves of the burden of these buildings, we do not believe there is a broad consensus that we should move to another location. Further, many in the Congregation have expressed an attachment to our Sanctuary as our sacred home and as an important part of the historic landscape of Newport as well as a memorial to Channing. We believe this is the majority view of the Congregation, although the extent to which the Congregation is willing to work to sustain the Sanctuary is not yet clear. Therefore, we concluded that we should attempt to establish the feasibility of remaining here so the Congregation could understand the level of commitment necessary.

2. Why did you use the On-site / Insight Capital Needs Plan as the basis for building repair and improvement cost projections? Doesn't it overstate our needs?

Answer: We decided that we are not professionals. Those who prepared this plan are. Since we have paid a lot of money for professional advice, we believe we should use it.

3. What leads you to believe that we can raise $2 million in seven years?

Answer: There are a number of indications that our Congregation has the wherewithal and the ability to raise this kind of money:

1. In ten years, this Congregation has increased the amount it pledges annually by over $100,000. This year, we hope to raise $165,000. Given that a capital campaign normally has a goal of 5 times the amount of annual giving, we conceivably could raise over $800,000 from our own resources.
2. We have already received $272,000 in grants. We can expect to receive more if we demonstrate commitment within our own Congregation to raise money.
3. We have significant assets in our property. As set forth in the findings of the Presidents' Task Force, we can (should we choose) make use of these assets including borrowing against them and / or selling some of them.
   
   
4. What leads you to believe that we can increase the number of pledges by 15 annually over a period of 10 years?

Answer: Since 1996 - 1997, we have doubled the number of pledges without making too much effort to do so. With a more systematically managed annual canvass - including a standing canvass committee and more systematic education about our needs and, perhaps, some professional help; we should be able to increase our pledge base in a measured fashion over a number of years.

5. What leads you to believe that we can increase the total amount pledged by 7% annually?

Answer: Over the last ten years, annual pledges have increased approximately 17% annually (10% if one does not count the two years of significant increase when the Congregation decided to call a new settled minister). According to an analysis conducted as part of the Presidents' Task Force's work, while this rate may slow down, we should be able to increase our pledges by 7% annually if we make the effort to do so.

6. What happens if we cannot raise the $2M in seven years in a capital campaign?

Answer: A number of options are open to us. We can perform building repairs at a slower rate, carry debt for a longer period, or even sell some assets such as Channing House or the Parish Hall as suggested in some of the recommendations of the Presidents' Task Force Report.

7. What happens if we cannot increase our pledge numbers by 15 annually?

Answer: Increasing the number of pledges will help us expand our ministry by doing things such as reclaiming space (by eliminating the need for rentals) and hiring more staff. The rate at which we increase our pledge base will determine the rate at which we can expand our ministry.

8. Why don't we just sell Channing House? Won't that solve a lot of our problems?

Answer: We can, we may, but we don't necessarily have to. Channing House represents a significant asset in two respects. We can borrow against it or use it to raise income (through rentals) and it provides space for our programs - it is a means to expand our ministry. Why should we give it up unless all options for keeping this important asset have been explored and pursued?

9. Why should we believe your conclusions? From where do you get your assumptions?

Answer: This analysis is based on a mathematical model that depicts a possible future for Channing Memorial Church. It is designed to do no more than demonstrate that it is feasible for us to achieve our goals for our ministry and our property if we make a commitment over a 20-year period to find the resources to do so. The assumptions are founded on data that is readily available to any member of the Congregation to include:

1. Historical data on pledge growth within the Congregation.
2. Annual operating costs and historical data on inflation of energy commodities and property taxes.
3. Projected building repair costs as set forth in the On-site / Insight Capital Needs Assessment.

Our assumptions have, for the most part, been fairly conservative with regard to costs and projected income. We would welcome any suggestions on how to improve our analysis.

Questions Asked At the Focus Discussion

1. For the 15 new pledges, what amount of pledge was assumed?

Answer: We assumed that with a year-round canvass and membership organization geared toward systematically increasing our pledge base that we could increase the number of pledges annually by 15 over a ten-year period. We assumed that the average amount pledged would be $500.00

2. Did the 15% average increase in pledges include when Amy came on board? We had a big jump then, so shouldn't include that year.

Answer:

1. We assumed that the average increase in pledge totals would be 7% annually over the 20-year period. During the last 10 years, pledges have increased at an annual average rate of nearly 17%. This includes the two years in which there was a significant jump because of commitment in the Congregation at that time to raise funds to call a full-time minister. If you disregard those two years, the average annual increase is about 10%. Therefore, we feel that 7% is a conservative estimate of our annual potential for pledge growth. It can also be found as an estimate included in an analysis done by members of the Presidents' Task Force.

2. We also assumed that we would increase the number of pledges by 15 annually over a ten-year period. Over the last ten years, we have increased the number of pledges an average of 6 per year without specifically making this a goal of our canvass or our membership efforts.  While it will be challenging to increase the number of pledges by 15 annually, we believe it is feasible.

3. What is the total amount of debt that we'd incur at the highest level?

Answer: Under the scenario we have set forth, it would be about $1.5M, which (if we were to raise money via grants and a capital campaign) would be steadily reduced and paid off by around 2020. The reason this scenario portrays us taking on this debt is that we assumed we would want to proceed with steeple and other major structural repairs as soon as possible in accordance with the On-site / Insight recommendations. Whether we choose to follow this precise timeline, however, will be a decision made by the Congregation when it approves a strategic plan to help us realize the vision we articulate this year.

4. Follow up to 3 - Then which of our assets would we be borrowing against to secure that amount of debt?

Answer: The specifics will be articulated in a strategic plan that will be designed to give us a "roadmap" to achieve the vision we articulate this year. Our biggest asset outside the Sanctuary, of course, is Channing House. We could borrow against that or even pursue one of the recommendations of the Presidents' Task Force Report and sell property to raise funds. Additionally, how much we need to borrow will be dependent on the rate at which we want to affect building repairs and the amount we can secure in grants.

5. Were the estimates in the O/I report in inflated dollars?

Answer: Yes.

6. Do projections account for people who will be lost (e.g., die) during this period?

Answer: No, we assumed that, as part of a strategic plan, we would increase the number and amount of pledges over the 20-year period. Given that we have done this already over many years - even given departures, deaths, etc. - we feel this is a reasonable assumption.