On Monday afternoon, the General Synod set a covenant share rate for the financial needs of denominational life in 2025. Covenant Shares represent a recent change to how the RCA collects operating revenue for its shared life together. Under the covenant shares method, each classis pays a flat percentage of the contributions received by each church within its bounds.
Monday’s discussion built on one from Saturday, when synod considered a restructuring team recommendation to cap covenant shares at 2 percent, with a goal of reducing the rate to 1.75 percent. While many of the restructuring recommendations passed, the recommendation for the covenant share cap did not pass. A focus of that discussion was the concern that it would reduce staffing and the General Synod operating budget to a level that would not be sustainable for the basic necessities of operational support for the work of the Reformed Church in America.
Because no cap was put into place, it will continue to be the responsibility of each General Synod to set the covenant share percentage rate each year.
The General Synod Council recommended a covenant share rate of 2.5 percent for 2025, a decrease from last year’s rate of 2.7 percent. Preliminary calculations indicated a covenant shares rate of 2.5 percent will generate approximately $3 million of assessment revenue. This represents a decrease of approximately $100,000 compared to the 2024 assessment. Of that revenue, $2,700,000 will be allotted to the General Synod Council (GSC), $207,500 to theological education, and $30,000 to a fund for initiatives approved at General Synod.
Covenant shares revenue decreased by approximately $1.8 million from 2022 to 2023 due to the large number of churches leaving the denomination. As a response, GSC staff leadership have worked to make challenging budgetary reductions in both staffing and expenses. The GSC’s total expenses in 2023 decreased from the prior year by $850,000. The 2024 budget was prepared assuming a draw on reserves of about $1.1 million. The general secretary and chief financial officer both expressed a commitment to achieving a balanced budget over a few years.
General Synod revenue is based on multiple income sources. The following pie chart illustrates the revenue sources that contributed to the denominational budget in 2024. An important note is that the Board of Benefits Services, Church Growth Fund, and Global Mission are funded by other revenue sources.
As detailed in the finance report, personnel costs, including salaries and benefits, make up 71 percent of the total budget. The remaining 29 percent of the budget is used for meeting and travel costs for the GSC, commissions, and General Synod; office costs, including rent and utilities; and other costs necessary to carry out the work of the GSC.
An amendment was made to change the theological education allotment from a fixed dollar amount ($207,500, a 50 percent reduction from the prior year) to 10 percent of the budget (approximately $300,000). Extensive discussion followed as delegates held the tension between continuing to provide a higher level of financial support for New Brunswick, Western Theological Seminary, and the Ministerial Formation Coordinating Agency at higher levels, and the realities of further budget cuts from GSC expenses if the amendment was approved. Delegates also named the painful reality of revising and reducing the budget in the new economic reality of the RCA as a smaller denomination. The amendment to increase the theological education allocation was not adopted. Find answers to frequently asked questions about covenant shares.
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