"Many congregations are struggling," the report said. "A significant number have been incurring operating deficits, and some are in fear for their very existence."

The 47-page profile, titled "Signs of Grace," aims, in part, to serve as a guidepost for clergy and lay people involved in the search to replace Bishop John P. Croneberger, who will retire at the beginning of 2007.

The report blames the exodus from the pews mostly on what it says is a failure of Episcopalians to welcome newcomers, enthusiastically discuss their faith with outsiders and maintain vibrant and creative parishes.

"We are not welcoming the Christ in many of our neighbors, who think we are exclusive, irrelevant, passe or boring," it said. "For some, we are too radical."

The report doesn't signal a retreat from the diocese's liberal positions. On the contrary, it celebrates a tradition of social justice that it says dates back to the early 20th century and includes bishops who spoke out on issues ranging from child labor to racism to the Vietnam War. Under Croneberger and his predecessor, Bishop John Shelby Spong, the diocese ordained numerous gay priests and performed blessings for same-sex couples. About 20 openly gay and lesbian priests work in the diocese, which has 27,600 members and 113 parishes.

Nevertheless, the report said the No. 1 quality needed in the next bishop is the ability to attract newcomers. Tellingly, the ability to grapple with social and theological issues and express them to society at large was ranked third.

"We've been around the block a few times, and we think we have the insight to know what's needed and what's possible," said the Rev. Randall Day, rector of St. Mark's Church in Teaneck, who helped write the report. "We want to be progressive socially, but we also need to grow if we're going to truly serve northern New Jersey."

Day said Croneberger has begun moving away from the Spong era by stressing congregational growth, as well as social issues. But he said much more work is needed. He noted that 3.5 million people live in the counties that make up the diocese.

"We should be able to pull in at least 20,000," he said. "Part of it is we do such a lousy job welcoming people. They come in, and they think they're in someone else's clubhouse."

Day said the frank assessment aims to prod the diocese into shaking off its complacency, and to serve as full disclosure to anyone seeking to don the bishop's robes. Besides the membership decline, the diocese has closed 23 churches, or 16 percent, in the last 33 years. Moreover, nearly 90 percent of parishes were founded before 1942, and not a single church has opened in 16 years, the report said.

During the same period, the Episcopal Church nationwide increased its congregations by 2 percent.

"We don't want the new bishop coming in and saying, 'Why didn't you tell me about this?'=9F" Day said. "At the same time, we're hoping someone will look=

at it and say, 'I want that challenge.'=9F"

A Wayne priest, who is theologically conservative, said she applauded the report's candor.

"I am extremely pleased that the document addresses head-on the major problem with the Episcopal Church, which is that it's disappearing," said the Rev. Ellen Donnelly, co-rector of St. Michael's Church. "It has been the elephant in the living room that everyone knows about but that nobody talked about."

Nationwide, Episcopal Church membership shrank 5 percent in the 1990s, to 2.3 million, according to a report by the Glenmary Research Center. Other mainline Protestant denominations, including the Methodists and Presbyterians, experienced similar declines.

Donnelly said the problem reflects the traditional emphasis at seminaries on theology rather than parish management. She said it's crucial that the next bishop attract clergy who know how to build a successful congregation.

"We have to be able to talk to people who are not only not Episcopalian, but who are unchurched," she said. "Just reciting the prayer book doesn't cut it."

The report has been in the works since July and is based on feedback from congregations throughout the diocese. About 70 congregations submitted written comments and responded to questions that asked them to rank the qualities important in the next bishop.

Day, the rector from Teaneck, and three lay people wrote the report. The final draft has the imprimatur of the diocese, receiving endorsements from two governing committees of priests and lay people.

"I think it shows we're all on the same page in terms of the values we are looking for in the next bishop," said Bill McColl, a spokesman for the search committee.

The release of the report kicks the search into gear. The diocese will accept nominations for bishop until Feb. 15. Then, a nominating committee will sift through the candidates and announce finalists June 28. Clergy and lay representatives will vote at a special convention on Sept. 23. The winner must obtain majorities from both lay and clergy.

END