The overall story is positive, as the number of domestic dioceses in compliance has grown sharply. The Rev. Mally Lloyd, who chairs the finance committee of the Executive Council, told TLC that in 2013, TEC was asking each diocese to contribute 19% of their revenue, but only 44 dioceses were doing so. The "ask" has since been reduced in stages to 15%, and more than 90 dioceses are expected to comply for 2019.

"To me, that's incredible," she said. "I think it's a combination of the General Convention and the Executive Council budget group paying attention and lowering the assessment consistently, and the House of Bishops working hard to get their colleagues to say that if we lower their assessment, [they] will come up to it."

It may also point to less conflict in the church. Several dioceses reported a decline in the number of parishes and individuals who insist that their contributions not go to The Episcopal Church.

Kurt Barnes, the church's Chief Financial Officer, said the reduced assessment has caused only a modest drop in income. He notes that moving the assessment from 19% to 15% represents a 21% decline in the total amount of expected revenue. But because of the increased participation, in 2018 The Episcopal Church's actual revenue from assessments was only 4% lower than 2015, the final year of the 19% assessment. Barnes said based on conservative projections, he expects the revenue to edge up during the 2019-21 triennium and exceed the 2015 level.

Diocesan assessments account for roughly two-thirds of The Episcopal Church's $134 million annual budget. The Church also has substantial investment income, and collects rent for five floors of its headquarters building near the United Nations in New York City.

The 2015 General Convention adopted a carrot-and-stick approach to assessments -- gradual reductions in the rate of assessment, combined with a penalty for noncompliance. The penalty is that beginning this year, dioceses that do not either meet the assessment or obtain a waiver will be ineligible to receive grants or loans from The Episcopal Church in the following year. Any exceptions would have to be approved by Executive Council.

How serious is this penalty? That will vary from diocese to diocese, depending on their inclination to apply for loans or grants. Barnes estimates that in 2018, TEC provided about $5.5 million in grants and loans, to dioceses, individual churches and organizations. This includes $3.9 million in block grants, primarily to financially dependent dioceses. The remainder includes scholarships and grants for campus ministries, church planting, anti-poverty efforts, seminaries, rural churches and other programs.

Several of the bishops and diocesan staff interviewed by TLC said they were focused less on the potential penalty than on a desire to participate in the broader church while still honoring the fact that their members have differing social and theological views.

That focus may shift as soon as specific grant applications are denied in 2020. Barnes said his staff will determine which dioceses have paid the requisite 15% when they close their books for the year at the end of January. The Executive Council, which must approve most grants and loans, will meet in mid-February.

Implementation may be a source of new conflict, given that the council has the authority to approve specific grants despite the new rule. The council has discussed, but not resolved, the issue that the new rule may end up penalizing churches and individuals who strongly support The Episcopal Church but reside in dioceses paying less than the minimum.

12 of the 103 dioceses have made 2019 pledges below 15%. These pledges range in size from 3.5% to 12.8%.

The dioceses range in income from near the highest (the Diocese of Pennsylvania has the third-highest income) to near the lowest (the Diocese of Fond du Lac ranks 91st of 103).

The most theologically conservative dioceses are well represented on the list. The bishops of Albany, Dallas, Florida, and Springfield are members of the Communion Partners, a group devoted to upholding the traditional teachings of the church. Three other domestic dioceses are headed by Communion Partner bishops, but the dioceses of Central Florida, North Dakota and Tennessee have pledged 15%.
Three of the dioceses -- Dallas, Pennsylvania and Springfield -- are led by bishops who are members of the Living Church Foundation, which publishes TLC.

Most of the dioceses said they were not meeting the 15% pledge for one or both of two reasons: financial hardship, and a demand from some parishes that their diocesan pledge not be passed along to The Episcopal Church because of theological differences.

Lloyd and Barnes said that the waiver process is based on having a significant reason for the shortfall, combined with a plan to get to 15% in the coming years. "To me, progress toward the 15 is as important as being at 15," Barnes said.

"We're not trying to be punitive," Lloyd said. "The overall goal is to build community, not break it."
The Executive Council committee that evaluates waiver requests has granted about a dozen waivers, most of them to non-domestic dioceses. The Council will consider additional waivers at its October meeting.

TLC reached out to each of the twelve dioceses to learn more about the factors that have kept them from reaching the15% pledge. Their responses are listed below, in alphabetical order.

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