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Fair Share System for Diocesan Finances

Learn about the Share Calculation system for equitable parish contributions based on income rating and church population. Understand the impact of rural travel allowances and income factors on financial support for ministry.

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Fair Share System for Diocesan Finances

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  1. Share Review 4th February 2012 Derby Diocesan Synod

  2. Preamble • The Christian Church depends entirely on the commitment and generosity of its members to sustain its Mission and Ministry. • The purpose of the Share System is to provide a fair and impartial method to assess the potential contribution of a Parish or MMA. • No system is perfect, but ours has stood the test of time and our Diocese may be rightly pleased that our finances have remained fundamentally sound in difficult times.

  3. Share Calculation - 1 - Introduction • In November 2009 the Diocesan Synod considered the work of the previous share review committee and decided not to change the system but to update it with more recent figures • As before, the heart of the calculation is the 'Count' made up of USAA, Electoral Roll and Parish Population - multiplied by 'Income Rating' taken from the Census statistics. • Then allowances are made of £2,000 per church building, and a 'Rural Travel Allowance' if appropriate.

  4. Share Calculation - 1 - Intro, Cont. • The 'Deprivation Factor' has been subsumed into the Income Rating because there is now less need to subsidise community buildings in deprived areas • The 'Investment Income' has been removed from the calculation because much of it is likely to be dedicated for large projects, and therefore is reserved income; so it would be wrong to regard it as general income. • No recommendation has been made about 'Ceilings and Floors' because the group saw these as integral to Renewing Ministry, the revision of which was not in our brief.

  5. A sample approximate calculation • An Urban Church MMA • USAA:163(*2/3) + Roll:139(*1/3) + Population:19 = Count: 174 • Average Income in the Parish from Census Statistics, less a 'Living Allowance' (£70 per week) gives 'Income Rating' = £165 per week • Potential to the Church is 5% of income = £8.25 per person per week • 174 * £8.25 * 52 weeks = £74,646 per year • Deduct £2,000 for one church = £72,646 • The diocese asks about 65% of potential = £47,219 per year

  6. Another example • A Rural Church • USAA: 17(*2/3) + Roll: 25(*1/3) + Population: 7 = Count: 27 • Average Income in the Parish from Census Statistics, less a 'Living Allowance' (£70 per week) gives 'Income Rating' = £227 per week • Potential to the Church 5% of income - £11.35 per person per week • 27 * £11.35 * 52 weeks = £15,935 per year • Deduct £2,000 for Church, £750 Rural Travel =£13,185 • 65% of Potential = £8,570 per year

  7. What this means 'in the pew' • Giving needs to be realistic, proportionate to a person's income • An average of 5%, after tax and a personal allowance, is achievable - many people tithe, ie pay 10% • When 65% of potential has been paid as share, mostly to pay the clergy, 35% is left for the rest of the Mission and Ministry of the local Church

  8. Comments • The allowances of £2,000 per church and for Rural Travel have a proportionally larger effect in smaller Parishes. • For example, one Parish has a potential before allowances of £3936, but after subtracting £2750 for church and rural travel and then asking for 65%, the share works out at £771.

  9. Calculating the Income Rating • The 2001 Census Data was mapped for each Parish. • From this we have the proportions of households in social groups AB, C1, C2, D & E, together with the total population of the Parish including children. • Government Final Income data enables us to assign the average income for each of the social groups, including benefits and tax effects.

  10. Comparing Income Rating with the old Wealth Factor • The old Wealth Factor was based on a 10% sample of the Parish population. For small communities this was potentially inaccurate. • The Income Rating is taken from the Census which includes all households. • It is noticeable that some Parishes which had a very different Wealth Factor from their neighbours have Income Ratings much more similar.

  11. Final Comment • We would expect to phase in the new Share system over three years.

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