from Congregational Leadership Conferences
Spring 2009 Back
- The current formula for determining ranges was not easy to understand and it should be based on net operating income. There were several definitions of net income put forward.
- Whatever new method we arrived at should be fair to all congregations. What I took this to mean from the discussions
was the amount per person should be less skewed toward the members of large churches paying more per person.
- There seemed to be about the same number of participants favoring a progressive system as a flat percentage system.
- All those present wanted the amount paid by their church to be less than they are currently paying.
- There was some confusion on the billing of insurance directly, especially among those from smaller congregations.
- Many of the specific ideas are not practical unless the Diocese cuts expenses drastically. The clearest example of this is a 10% tithe, which is way below what is needed to support the diocese.
- Everyone would like to see how any change to the formula would affect their church. The problem with presenting all 4 formulas to the churches at convention is that they will most likely vote for the one that reduces their assessment the most. This will result in the formula that benefits those churches with the most delegates being passed.
- I’m not sure that is clearly understood by all churches and the diocese that the assessment formula is an important policy making tools with respect to
long run financial viability of our member congregations. Without significant growth in overall congregation revenues or expense reductions at the diocese level there will be some churches that pay more and some that pay less. There is no way to make any change to the current formula without this happening and it is important that there is general agreement as to what is wanted from the change in formula.
- Simplicity
- Current process pretty good
- Allocate direct expenses to parishes
- Tiered (3?) flat tax based on budget
- Current system doesn’t give parishes incentive to grow
- 10% of first $150,000 net income and then 20% over that amount
- 2 tier-system based on 17% of first 200K than a 2nd tier of 20% on anything above 200K (suggested rates based solely on income)
- Deductions: outreach, fundraising for improvements
- Have other formulas been applied (theoretically) to see what effect they’d have?
- Has management consultant been consulted?
- Philosophical approach: flat tax or progressive tax
- fairness to large parishes
- If deficit occurs, how are obligations re-organized?
- Doesn’t the increasing scale discourage growth?
- Why has actual income not been part of formula?
- Is Diocesan budget derived from top (what to spend on) or from bottom (what is available)?
- In the plan to reduce apportionment, will the medical insurance and worker’s comp be taken from the Diocese to the parish?
- Forgive arrears apportionment (start fresh)
- Have consequences for not paying apportionment
- Diocese of New York is a good model
- Proportionate and graded based on income after outreach expenses
- # parishioners should be part f the model
- Church pays own insurance with a formula for supplementing poor churches
- From each according to their means (Diocesan income), to each according to their needs (Diocesan expenses)—determined according to core values of the Diocese and baptismal covenant
- Apportionment based on income, not on attendance—or some combination of the two components
- Income component should be after outreach expenses are deducted
- Apportionment rate should include a reduced or 0% option up to a certain income threshold--Flat or 1-step percentage after that income level
- Important to maintain strong central services to churches from Diocese.
- Base on income only (not as attendance or # of pledges)
- Rate: Tithe/10% or graduated—higher rate only on marginal income
- Continue current exemptions: capital, outreach, designated
- Apportionment calculation needs to change—don’t start with formula, start with Diocesan budget then look for flat rate. Could be graduated rate or approp. Use a progressive rate
- Diocese needs to budget after the parishes
- Need to measure effectiveness of individual parishes
- Make a base rate for 1st$x, incremental rate only on amt above $x
- Rankings not based on outreach
- What do we want to incentivize? (ratios: bricks and mortar vs # members vs outreach?)
- Diocesan central insurance payment. Rationale: ensures coverage of all employees
- The #’s for apportionment need updating annually
- Diocese continue to gather info on budget priorities
- Pledge cards are not good measure
- El Camino Real: fair, simple, does not discourage growth
- Ministry happens in parishes
- Define income: plate, pledge, giver of record, interest and other designated income
- Use previous year’s number
- Flat rate: 20% minus outreach and clergy salaries and benefits
- Equitable based on ? income and need
- Di9ocese look at its budget
- Payment each month, based on income, take off outreach and clergy salaries and benefits, 20% of income, with consideration for missions
- Apportionment based on past budgeted amount, flat rate for next year,, 2009’s % based on 2008’s income taking out outreach and clergy salaries and benefits
- Apportionment based on current proposed budget taking out outreach and clergy salaries and benefits, with mid-year evaluation
- 10% plus needs of Diocese
- $318 per person based on chart
- Quarterly instead of monthly reports
- For simplicity, a flat rate would be helpful: minus outreach?, minus capital expenses?, minus pre-school expenses? Minus investment income losses? Minus salaries?
- How is income defined? Pledge, endowment, rental, plate.
- What about pass thru income that isn’t part of operating budget?
- Church should be able to balance their budget before Diocese balances theirs.
- Small congregations (A1 and A2) and large congregations (G & F) seem to be disproportionately affected
- Incentivize programs thru deduction on apportionment
- Equitable for parish and DNC
- Flat 20% = current expenditure
- Look at small vs large/ haves vs have nots
- Larger, more healthy (financially) churches “partner” with small churches—larger churches is given “credit” for portion contributing for smaller churches
- Flat, but did not agree on how much—areas of this Diocese are very low income compared to other parts of it
- If pass thru and bill to churches as they are, the apportionment % would have to go down 80% (ie of what it would need to be)
- Have biblical tithe as the basis on X$. This is starting point. Determine difference on what 10% would raise over what the Diocesan needs are. Take the difference and proportionate it fairly---
- Define “fairly” options. See how to make the $ amount per person more equitable
- The community (average income) a church is in affects the ability to raise funds
- Flat Rate – 10% [or whatever]
- Progressive rate – how to determine?
- We would like a graduated formula like the diocese of New York . . . .
- Straight tithe – diocese of Washington, D.C.
- Like to see a trail run spread sheet
- Any significant formula change will increase/decrease apportionment shift
- ** part-time or non-stipendiary clergy saves $$ for Diocese
- investment income or rental /outside income
- Tithe = 10% of operating income
- Exclude outreach pass-throughs
- Exclude income on endowment
- Churches pay own insurance
OR
- Progressive based on actual income exclude endowment
- Current model is anti-growth
- encourages “creative accounting”
- diminished or perceived diocesan value
- declining marginal brackets
- fixed rate assessment up to $200,000 (maybe 10%)
- marginal decrease thereafter
- $200,000 to $250,000 (Maybe 8%)
- $250,000 to $300,000 (maybe 6%)
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