The Committee on Theological Education (“COTE”) requests that the 220th General Assembly (2012), as it considers the General Assembly Mission Council (“GAMC”) mission budget, amend Item 10-18 by adding the following additional recommendations: [Text to be added is shown with brackets and with an underline.]]

“[D. That the 220th General Assembly (2012) do the following:

“[1.         Direct the General Assembly Mission Council not to implement the 218th General Assembly (2008) action regarding cost allocation and recovery with respect to the Theological Education Fund in the 2013–2014 General Assembly Mission Budgets.

“[2.         Direct the Moderator of the 220th General Assembly (2012), in consultation with the Moderator of the 219th General Assembly (2010) and with the Committee on Theological Education (COTE), toappoint a special committee on the funding of theological institutions, with a charge to review the funding relationship of theological institutions to the General Assembly and the church, and to propose any needed changes, including a strengthened funding mechanism for the support of theological institutions by the church. The special committee should make its report to the 221st General Assembly (2014). The special committee should consist of thirteen members, all of whom should be persons who are especially knowledgeable about theological institutions. One member should be the director of COTE, and a second the director of the GAMC Theology, Worship and Education ministry area. The remaining eleven should include two elected members of COTE, five PC(USA) seminary presidents, and a GAMC member. Other members would likewise be persons with knowledge and experience in the field of theological education, one of whom should have expertise in fund-raising. The special committee will hold up to three face-to-face meetings (an initial meeting for two days, and up to two additional one-day meetings). Conference calls and other technological resources would be used for other meetings in order to reduce costs.]”

1.     The 198th General Assembly (1986) established a Committee on Theological Education(COTE) and proposed the creation of a theological education fund (the “Fund”) equal to one percent (1.0 percent) of the dollar figure reported by each congregation of the church be contributed by each congregation as an additional gift as its proportionate share for the education of present and future ministers and educators of the church. The Fund was subsequently created and COTE was charged with administering the Fund and preparing an appropriate formula for disbursements of monies from the Fund to the theological institutions of the Presbyterian Church (U.S.A.). The COTE was also charged with advocating for their financial support.

2.     At some point after its inception, COTE and the General Assembly Council (now the General Assembly Mission Council [herein “GAMC”]) agreed that certain costs of COTE would be borne by the Fund, but that other operating expenses would continue to be funded by the church’s mission budget. The activities of COTE proceeded in that manner. In 2004, when the GAMC began initial implementation of a 5 percent administrative cost allocation, the Fund was exempted from this cost, because the Fund was already covering a significant portion of the costs of the Fund. Since then, the Fund has not been expected to fund nor has it funded the 5 percent shared mission charge since its implementation because the operating expenses funded by the Fund exceeded the 5 percent charge.

that the system of giving developed by the General Assembly Council fairly and accurately allocate all costs associated with individual projects in the General Assembly mission budget, including the costs associated with the systems necessary for the support, promotion, and accountability of each item; and that the results of this system be communicated to the church as part of the General Assembly Council’s mission interpretation. This transition will be gradually          phased in over a five-year period, beginning in 2009. (Minutes, 2008, Part I, p. 668)

Staff of the GAMC worked diligently to implement the direction of the 218th General Assembly (2008), and at its meeting held May 9–11, 2012, the GAMC considered and adopted proposed budgets for 2013 and 2014, which included a substantially higher shared cost allocation to the Fund.

4.     Implementation of the GAMC’s cost allocation and recovery charge upon the Fund will place an untenable burden on the Fund, which already absorbs the costs of its GAMC staff and direct promotional costs. Furthermore, while important for all Presbyterian seminaries, the Fund is decisive in the case of Johnson C. Smith Seminary, which is heavily dependent on the Fund, and whose very existence is threatened by the reduction of distributable funds that will be caused by the imposition of a cost allocation and recovery charge upon the Fund.

5.     At the same time, contributions to the Fund have declined for more than a decade and that decline is expected to continue. The truth of the matter is that the church, the seminaries, and the denomination have a problem with the Fund as it now exists. In 1986, the church hoped to replace the funding for theological education that was coming from the denomination with funds that would be received from congregations, not as benevolence gifts but as direct investments in the leadership of the church. This has not been the result. In 2010, less than 2 percent of the total budgets of seminaries were funded by the Fund instead of the hoped-for 20 percent when the Fund was established. Only 20 percent of the church’s congregations now contribute to the Fund. It is anticipated that these trends will continue without creative thinking and energetic leadership.

6.     The COTE recognizes that the Fund faces a challenge from declining receipts, independent of cost allocation and recovery, and seeks to involve the General Assembly in (a) taking a new look at the funding relationship between seminaries, the denomination, and its congregations, and (b) considering a different mechanism by which the church provides opportunities for congregations and others to contribute to the funding of theological institutions.

7.     The COTE is pleased to advise that consultations among representatives of COTE and GAMC were held on June 12, 2012, in Louisville, and thereafter, and that the GAMC representatives, including its Executive Director, indicated their concurrence with these comments and their support for both the postponement of the application of the cost allocation and recovery charge to the Fund and the appointment by the Moderator of the special committee. They plan to support COTE’s recommendations at the assembly and its committee(s). The GAMC representatives feel that COTE’s first recommendation looks at the immediate short-term need for 2013–2014, and that the other seeks to address the larger issue of the denomination’s funding relationship to PC(USA) seminaries.

8.     Insofar as expenses of the special committee are concerned, seminaries have agreed to pay all committee-related expenses of their presidents, if selected, including travel costs, and, if a meeting is held on a particular seminary’s campus, the seminary will pay the “on the ground” expenses of all committee members attending the meeting (such as meals and housing, but not transportation). This should reduce the costs of the special committee that would be incurred by the denomination. The limitation to three face-to-face meetings and the use of technology for conference call meetings, where appropriate, should likewise result in lower costs.

NOTE: The COTE has direct access to the General Assembly pursuant to (i) Section 24.045, as referred to in Section 24.128, Recommendation A, of the Report of the Special Committee on Theological Institutions, as adopted by the 198th General Assembly (1986), Minutes, pp. 265–74; and (ii) Section 4 of Part VIII of Appendix 1 of the GAMC Manual of Operations (September, 2011).