Funding Allocations (Budgets) Formula

[Jon Twitchell]

I know that a portion of this formula is generated by the General Church (perhaps determined by the General Assembly?), and part of the formula is generated by the district.

I'd like as many districts as possible to chime in with some quick stats on their district budgets and the funding formula.

1) What is the funding formula adopted by your last District Assembly?

2) How many churches on your district?

3) How much money is assigned through district funding allocations?

4) How much money is received through district funding allocations?

5) What is the CAP on your district? (The percentage of the RAP that a church won't be assigned more than that percent.)

6) How many churches are at the CAP?

[Jon Twitchell]

I believe (someone can correct me if I'm wrong) that the base is computed by the same formula:

line 9 minus (1a + 1b + 1c +2) minus exemption ($4000 if the RAP is $100,000 or less).

I also think that the WEF, P&B, and Educational Funding allocation come from the General Church, but I'm less confident on that point.

[Hans Deventer]

John, the churches pay € 69 per active member as of the 1st of July of the previous year for district budget. So our 2008 budget was based on the membership as of 1-7-2007. There were 1843 active members in 12 churches, I think you can do the math.

[Jon Twitchell]

My answer to my own questions:

Maine District Funding Allocations

BASE = line 9 minus (1a + 1b + 1c +2) minus exemption ($4000 if the RAP is $100,000 or less).

Funding Allocations:

WEF: 15.0% of the BASE
P&B: 4.0% of the BASE
ENC: 7.0% of the BASE
District Ministries Fund:
If the BASE is:.........................% of BASE
$0-$10,000...............................6.900%
$10,001 -20K ...........................10.026%
$20,001 +................................12.992%

District SS: 0.630% of the BASE
District NYI: 0.869% of the BASE
District NMI: 0.630% of the BASE
District NMI - Special Project: 0.232% of the BASE



There are 50 churches on our district, and $181,431 is requested (for this coming year) from the local churches to fund the District Ministries Fund.

Last year, $170,978 was requested, $145,098 was received, and $180,061 was spent. (The balance was taken from income funds that are generated from our investments.)

We have a 20% cap, meaning that no church will be required to pay more than 20% of its Raised for All Purposes (RAP) into funding allocations. What this means from a practical standpoint is that when a church hits its CAP, a higher percentage of its allocation money stays on the district, as compared to WEF/P&B/ENC.

Last year, 25 churches (half) were at the CAP. This year, 31 churches will be at the CAP.

The Maine district should be paying $270,627 to WEF (based on the 15% of the BASE formula).

However, as a result of the number of churches that are capped, we are allocating $217,639 to churches for WEF.

What are the numbers for your district?

[Jon Twitchell]

John, the churches pay € 69 per active member as of the 1st of July of the previous year for district budget. So our 2008 budget was based on the membership as of 1-7-2007. There were 1843 active members in 12 churches, I think you can do the math.

Thanks... So you don't calcuate your district budgets based on income or expenses, but on membership.

127,167 euros. (roughly $200,000 USD). Is that 69 euros a set number, and your district simply has to live on the amount of money that comes in, or does your advisory board/finance committee come up with a budget first, and then divide that by the number of active members?

Are there other funding allocations that you pay? World Evangelism, Pensions, Education?

[Eric Frey]

My understanding is that denomination wide the rule is not more than 20% of "funds raised for all purposes" can be assessed.

So the Budget Base (BB), as you pointed out is Line 9 - (line 1 + line 2).

If I remember correctly it breaks down like this

Educational = 7% of BB
WEF = 15% of BB
P&B = 4% of BB
District (East Ohio for 07/08) = 11.5% of BB

The districts all do it differently. Ours is moving to a Unified District Ministry Fund that includes all the categories of District Apportionments. Unfortunately, our NMI has decided not to participate and so it is still much more complicated than it needs to be.

When you add up Ed, WEF, P&B and Dist is cannot total more than 20% of Total Raised for all purposes (Line A).

****

Sorry to repeat your info Jon, you just beat me to the post button!

[Jon Twitchell]

Thanks Eric...

That's what I thought.

However, I just had received an email from another pastor indicating that his district didn't cap budgets at 20%... which was what inspired part of this post.

Can you tell me how many of the churches in East Ohio are capped?

[Hans Deventer]

127,167 euros. (roughly $200,000 USD). Is that 69 euros a set number, and your district simply has to live on the amount of money that comes in, or does your advisory board/finance committee come up with a budget first, and then divide that by the number of active members?

Are there other funding allocations that you pay? World Evangelism, Pensions, Education?

Yes, but these are not calculated that way. WEF is set by the DNMI convention, pensions by the Pension Board, Education is also a fixed amount per member.

Initially, we simply divided the budget by the number of members. Ever since, we corrected the amount for inflation, if needed. Since the district is growing, that isn't always the case. We've been doing it for 10 years now and it saves lots of discussion about "taxable income".

[Jon Twitchell]

So...

I'm guessing that the formula that Eric and I have posted is a USA/Canada formula? I assume that there must be a USA/Canada caucus that happens at GA?

[Ryan Scott]

From what I've been told, even with the formula listed above, Districts are free to assign whatever amounts they choose to local congregations, even for general denominational budgets. I know this is where a lot of the complaints arose at the last GA with a bunch of funding resolutions set before the USA/Canada committee. It didn't seem fair to some people that local congregations were paying vastly different percentages in budget allocations simply because they were on different districts.

I assume that the answer is choosing between authorities. Will the district set the amount or the denomination?

[Barbara Moulton]

I know I have mentioned this before but when I was in the CofN I could never really figure out the system.

In the Wesleyan Church we pay a combined total of 11% of tithes and offerings. Money given for Missions and money received in rent is not included as assessable income. Since we receive rents for our parsonage and from another church this is a huge blessing for us.

And I can't tell you how much easier this is. As soon as our church books close for one year, I can figure out what our assessment will be for next year.

But beyond that, the big difference I notice is that, in the seven years I have been going to District Conference, every single church in our district has paid 100% of its budgets. I never saw that in the CofN.

It seems to me that setting reasonable budgets which most churches have a reasonable expectation of paying, is a much better way to do things. District office can set its operating budget with greater confidence.

Since I don't belong to the CofN anymore, I don't come into this forum very often. But I do think that this is one area where the CofN could look at other denominations and see if there is a better way.

Just as I think there are things my denomination could take from your system.

[Eric Frey]

And I can't tell you how much easier this is. As soon as our church books close for one year, I can figure out what our assessment will be for next year.

This is also true in the CotN. The as soon as you close out your books, you can do the formula [line 9 - (line 1 + line 2)] and then do your percentages. WEF, Ed, and P&B are set. And whenever I ask, our distict finance officer has told me a very close "ballpark percentage" for the District.

We even begin the budgeting process at the end of the 3rd qtr projecting based on the first three qtrs what the yearly numbers will be and project a new years budget that only has to be tweaked and adopted at the beginning of the new year.

But beyond that, the big difference I notice is that, in the seven years I have been going to District Conference, every single church in our district has paid 100% of its budgets. I never saw that in the CofN.

It seems to me that setting reasonable budgets which most churches have a reasonable expectation of paying, is a much better way to do things. District office can set its operating budget with greater confidence.



I agree, I think you would see giving increase overall if the apportionments decreased to a smaller number. The moral from being able to pay them goes a long way in most churches I've been in.

[William Hunter]

It does not matter what amounts are raised, spent or whatever, our budgets go up every year. I don't know of any business that could exist in sending such high percentages of its money elsewhere. I believe we have too many layers of structure that demand money from the local church. It does not seem that we can get anyone to listen to the fact that the local church is not a bottomless money pit.

We pay 10% of tithes and offerings, plus we raise missionary funds through the Faith Promise program. That should be enough, but it never is. I can tell you that my church board which has been highly supportive of our program is beginning to resist this budget business because of the every year increases, no matter what the local church does. Our dist. budget is $6500.00, and we pay a total of $24,000 in budgets for this year. Sending that amount of money out of the local church hurts us. Our costs for such things a utilities, etc. keep going up, going up faster than our income.

Barbara, I fully agree with you. The COTN must take a look at other denominations and understand that the local church cannot keep up with the budget demands. But I have no faith in that ever happening unless there is a huge "up rising" about this. There would be too many who would have to go back to pastoral ministry, etc. if that happened. Our leaders get raises every year while too many local pastors go years without a pay raise---all out of the local church.

I do not mean to sound irritated here, but I am. The demands are way out of balance. I watch my people struggle to get things paid while their cost of living just keeps going up and up, but the denominational demands just keep going up and up. When will realistic thinking, practical thinking, begin to figure into the decisions of all the different agencies of the denomination who just keep demanding more and more, while my local people struggle to make ends meet?

My board has decided that the tithe is Biblical and that is what they will pay on our weekly tithes and offerings, plus Faith Promise. I cannot justify brow-beating them into submission when I see they are having to cut back in basics in order to meet the demands of living.




Yes, sorry if I generalized. My recollection is nine years old so it probably was easier than I remember it to be. :)

I do know that, as pastors of a small Nazarene Church we were never able to pay our full budgets.

As pastors of a small Wesleyan Church we have always been able to pay them.