The Diocesan Parish Share

What is it for?

Each year the work carried out centrally in the Diocese of Rochester in support of parishes’mission and ministry cannot be funded entirely from Diocesan funds. Although the Diocese has some income of its own, around 70% of the money needed to fund the annual Diocesan budget has to be funded from the Parish Share. In 2011 this will amount to some £3,392,000.

Around60% of the Diocesan budget is applied directly in supporting parishes through the upkeep and improvement of parsonages, training of clergy and lay workers, support for youth and children’s work, stipend support, etc. The NationalChurch seeks a contribution from all dioceses to fund future clergy, the costs of the Archbishops’ Council, the General Synod and the pensions of Mission Agency personnel and these amountsrepresent 19% of the budget. A further 14% provides indirect support for mission in areas outside the reach of individual parishes such as communications, support for Youth Work, diocesan projects. The remaining 7% funds the operation of the various statutory committees, CRB monitoring, personnel issues, and the Diocesan Synod.

It is a fundamental objective that the allocation of these costs to parishes through the Parish Share should be as fair and equitable as possible. But, above all, it is vital that the sharing process is set against a credible theological rationale.

Why should we pay it?

The Parish Share is, or ought to be, an expression of the joy and commitment of the churches of the Rochester Diocese towards the maintenance and furtherance of its overall mission; an expression of love, loyalty and mutual support. As explained above, its use is very largely either directly or indirectly for the work of the churches in the Diocese; for the support of various ministries and for other expenses in which the whole Diocese rightly shares.

The method of apportioning the Parish Share tries to be as equitable as possible, one that is fair and just and recognises the often considerable differences in the genuine ability of parishes to contribute to it.

Individual parishes do spend their money differently, not all having the same needs or agendas. But St Paul’s metaphor of the Church as the Body of Christ fits very well in how we ought to perceive our Diocese. The sense of mutual belonging and commitment it conveys commends it strongly, challenging us to see our Diocese in this way, each part functioning in awareness of and in harmony with the other parts, and responding appropriately whenever any one part is in need of assistance.

How is it calculated?

Although there is a complicated method of calculation, it is based on two strands, being, parish financial resources (i.e. how much income a parish has), and parish size (i.e. attendanceas measured by the usual Sunday attendances and electoral roll figures).

With income, the annual income of a parish is adjusted for some items of income or expenditure. To avoid over-assessing a parish due to its particular local circumstances wetake out some items of income and expenditure for certain capital and charitable purposes, and we give ‘allowances’ for the clergy or licensed youth/children’s workers a parish may have.

On parish size, the annual Statistics for Mission form is used to obtain the usual Sunday attendance, but adjusted for any abnormal services. The electoral roll figure is obtained from the annual return made after the parish APCM.

Rolling three-year averages are then applied to both the income and size figures in order to smooth out major fluctuations in the annual returns for these figures. There can also be special arrangements made for LEPs.

Once the apportionments are made, there is an opportunity for each Deanery to be involved, as the Deanery has a role to play in demonstrating the outworking of the theological principles behind parish share and to recognize the sense of being part of the Body of Christ. Deaneriesare often far more aware of local issues relating to deprivation, ability to pay and special circumstances in its parishes. Each Deanery can therefore ‘fine tune’ the parish share apportionment applied to its parishes without limitation, subject to the whole assessment for the deanery being remitted.

Is the Parish Share assessment fair?

The current methodology outlined above is based on the principle of ‘relative affordability’. Generally speaking, the more income a parish has, or the more people they have in their ‘membership’, the greater the resources available to meet the costs of the Parish Share. Biblical principles recognise that‘from everyone who has been given much, much will be demanded; and from the one who has been entrusted with much, much more will be asked’ (Luke 12:48,NIV).

Why does our assessment change every year?

Each year the diocesan parish share requirement changes, as the annual budget changes, although very few of the 218 parishes will experience the same increase as that of the total requirement. So, if for example your parish assessment goes up by 10%, but the total Parish Share is only going up by3% - why?

There are three factors that can give rise to sharp changes to a parish's share, either upwards or downwards - although the three year averaging should soften the blow (or the benefit at the other end):

  • Significant changes to the parish's size or income.Parishes provide the information (on trust) of usual Sunday attendance and electoral rolland they should be prepared for any change that this may cause. As parish income is based on the information contained in the annual accounts, Treasurers should be aware of any change to previous years. However, the effect of such changes is delayed. The 2011 figures are based on 2007, 2008 and 2009 returns.
  • Changes to a parish's allowances. These are possibly the cause of the most erratic changes as many allowances can be large and some are of short duration (especially for building or repair projects). Parish Treasurers should be alert to the effect of these and could advise their PCC accordingly.
  • Changes to the overall sum of parish sizes and incomes across the whole diocese. As the parish share is based on ‘relative affordability’, for a particular parish this will vary depending on how your income or size compares to everyone else. If a parish's size stays constant at, say, 200 fora numberof years,yet the diocesan aggregate is on the decline from, say, 27,000 to 24,000, then their relative size increases.The same can also apply with parish income.

PCCs need to be aware of the impact that growth in numbers or in income MAY have on higher parish share in future years, especially if that growth is at a faster rate than others, but then they should also be proud of that growth.

Martyn Burt

Diocesan Treasurer

3rdrevision March 2011

user/heather/treasurers documents/simple parish share

APPENDIX – CALCULATION OF THE PARISH SHARE

Introduction

The allocation of Parish Share to individual parishes is based on a system that was agreed by Diocesan Synod in May 2002 and took effect from January 2003 with a further modification made in February 2003 which affected the allocations from 2005.

There are three measures used to calculate the Parish Share:

  • The usual Sunday attendance)
  • The Electoral Roll) these are combined to produce a size factor
  • The income of the Parish) (see below)

In addition, the system includes:

  • Three year rolling averages used to smooth out changes from year to year
  • Units of Parish Share used to combine size and income factors into a single scale of relative affordability
  • The opportunity for Deaneries to ‘fine tune’ the apportionments proposed for their parishes

The way in which these measures and concepts are used to calculate the allocation of Parish Share is set out in the following paragraphs.

The Size Factor

Usual Sunday Attendance (uSa)

Each Parish is asked to complete a Statistics for Mission form that asks for details of Church attendance in October each year. From this return, the usual Sunday attendance of adults (uSa) is derived. Allowance is made for any abnormal services (e.g. festivals, confirmations, large baptisms etc) which fall within the recording period.

Because of the time delay in receiving and processing the returns, the uSa figures used will always be two years in arrears. Therefore the 2011 Parish Share will, for example, use October 2009uSa figures.

Electoral Roll (ER)

Each year every Parish has to disclose to its APCM and make a return to the Diocesan Office the total numbers on its Electoral Roll. The figure that is disclosed is used in the calculation for Parish Share.

The figures used are one year in arrears, so the 2011 Parish Share, will use Spring 2010 ER figures.

Size Factor (SF)

The size factor for each Parish will be calculated as the sum of 1/3 ER and 2/3uSa. The resultant figures will be rounded down to the nearest whole number.

PCC Income

Every year the Parish Treasurer will make a return to the Diocesan Office that gives details of both the income and expenditure of the Parish as declared in the PCC annual accounts. This information will be used to derive the income component of the Parish Share calculation but here again it will be necessary to use figures two years in arrears, so the 2011 Parish Share will use the 2010 Net Assessable Income (NAI) figures.

For purposes of calculating the NAI, the parish’s gross annual income from all sources is adjusted in two ways.

First, expenses directly incurred in any fund raising activity (e.g. stewardship campaigns, social events) are netted off against the income derived from that activity. In the same way, the costs of running the Church Hall, producing the church magazine will be netted off against any income from these sources.

Deductions (termed Allowances) are then made in respect of certain items of income and expenditure.

Income Allowances

  • Legacies (capital receipts)
  • Local and National Government Grants (excluding the new grant given in respect of the rebate for VAT).
  • Insurance claims
  • Income specifically raised for and restricted to the following:-

-the purchase of housing for salaried Curates or licensed lay workers

-the extension, rebuilding and repair of Church buildings including halls

-the refurbishment and/or re-hanging of bells

-the replacement and repairing of Church heating systems

-the refurbishment, replacement or rebuilding of Church organs or equivalent modern instruments used wholly within the Church buildings.

Expenditure allowances

  • Money given to other Charitable Organisations.
  • Expenditure incurred on the following:-

-approved quinquennial repairs not adequately covered by accumulated Church Repair Fund(CRF) deposits or other restricted income

-contributions for approved works on parsonages, not being funded by the Diocese

-the installations or necessary replacement of sound reinforcement systems

-the provision of all facilities required as a result of Central Local Government legislation to meet Health and Safety Regulations, all approved disability requirements, equal opportunities etc.

  • Expenditure incurred on all clergy and licensed lay workers paid through the Church Commissioners stipendiary system, and, commissioned youth and children’s workers:-

-For Clergy this will be at the minimum level of Stipend plus the National Insurance and pension contribution applicable to this level.

-For Curates and licensed lay workers, the allowance will be as per the first point of the scale plus the National Insurance and pension contributions due.

-For youth and children’s workers, only those who have been commissioned by the diocese and approved by the Board of Education will receive an allowance. The allowance will be the same as for curates and licensed lay workers.

-Any allowances will be allocated pro rata in respect of part time appointments or during vacancies.

-Any Diocesan Stipend grants will be deducted off the allowance.

  • Contributions into the CRF will receive an allowance, together with any accrued interest.

Rolling Averages

Rolling three-year averages will be applied to both the SF and NAI figures in order to smooth out major fluctuations or changes year by year. For example:

Year 1 / Year 2 / Year 3 / Year 4 / Year 5
ER / 40 / 44 / 48 / 50 / 45
USa / 30 / 30 / 33 / 34 / 35
SF / 33 / 35 / 38 / 39 / 38
SF 3 yr ave. / n/a / n/a / 35 / 37 / 38
NAI / £21,000 / £15,000 / £18,000 / £24,000 / £19,000
NAI 3 year ave. / n/a / n/a / £18,000 / £19,000 / £20,333

Units of Parish Share (UPS)

The three elements of ER, uSa, and NAI are not in themselves accurate measures of parish wealth but combined together they represent as fairly as possible the relative affordability of parishes.

The value of each UPS is kept at approximately £400, although this can vary. It is thought that this value is an affordable incremental size; therefore the total Parish Share to be raised will be approximately 8,300 units (total diocesan Parish Share requirement divided by £400). These will be allocated to parishes according to their ability to pay as determined by their relative size and income. The process of allocating UPSs is best explained by reference to an example, using illustrative figures. See Annex.

Local Ecumenical Projects (LEPs)

There are 9LEPs in the Diocese but the financial arrangements for sharing their costs with the other partner churches are diverse and offer little opportunity for common policy or practice in regard to the calculation and collection of Parish Share. The Finance Team will negotiate with each of these parishes individually, taking full account of the proportion of each congregation which is Anglican (including a half-share of those with joint loyalty), any income which is specifically aligned to one or other of the partners, the cost of the ministry provided by either partner and the principles of allocation set out in this document. The outcome of these negotiations will be submitted to the Finance Committee for final approval.

Deanery Apportionment

The Deanery can have a role to play in demonstrating the outworking of the theological principles behind Parish Share. It is an important part of the Parish Share process to recognise the sense of being part of the Body of Christ.

“Our desire is not that others might be relieved while you are hard pressed, but that there might be equality. At the present time your plenty will supply what they need, so that in turn their plenty will supply what you need. Then there will be equality.” (2 Corinthians 8: 13-14).

At a local level, it is the deanery that is far more aware of the issues relating to deprivation, ability to pay and special circumstances that pertain in its parishes. To foster this sense of belonging and mutual support, each deanery is able to “fine tune” the Parish Share apportionment applied to its parishes. Deaneries are encouraged to apply this approach so as to encourage a greater collaboration between parishes. There will be no limitation to the amount of reallocation a deanery might negotiate so long as the total Share for the deanery is forthcoming.

If a Deanery does not wish to be involved, then the assessments as proposed by the Finance Team will be used without amendment. (NB to date, no deanery has taken up this offer).

Appeals

Not everyone will be happy with their final Parish Share assessment. In the past most comments were raised in respect of fluctuations between years, usually as a result of capital schemes not receiving relief or capital allowances coming to an end. The three-year rolling average doesremovesome of these distortions. If, however, a parish feels that certain items of expenditure or income should receive relief then the Finance Committee will look at these on an annual basis with a view to recommending changes to the rules for future years.

No changes will be made retrospectively.

SAMPLE CALCULATIONS

Parish Profile

2006200720082009

1)Electoral Roll (ER)45485051

2)Usual Sunday Attendance (uSa)343535

3)Net Assessable Income (NAI)£25,000£23,000£20,000

4)Parish Share Assessment

Diocesan Profile

5)Budget Requirement – say £3,324,000

Diocesan Target Value:£3,324,000 (divided by 8,310 to calculate UPS value) = £400

4155 UPS to be applied by reference to size

4155 UPS to be applied by reference to income

Note:

If we assume that the average total Electoral roll of all parishes in the Diocese for 2007/09 is 28,500, and the average Usual Sunday attendance for 2006/08 is 19,000 then the size is calculated as (1/3 x28,500 + 2/3 x 19,000) = 22,166. The size factor for each UPS is 22,166 divided by 4,155 =5.3

If we assume that the average total NAI of all parishes in the Diocese for 2006/08 is £8,200,000 then 4,155 UPS divided into £8,200,000 give an NAI unit of £1,973.

Method of Calculation

The size factor is derived from one third of the electoral roll (average of 2007, 2008 and 2009 figures) and two thirds of Usual Sunday Attendance (average of 2006, 2007 and 2008 figures). For the sample parish this will mean ((48 + 50 + 51) / 3 x 1/3) + ((34 + 35 +35) / 3 x 2/3) = 40

The net assessable income used will be the average of the agreed accounts from the three previous years 2006, 2007 and 2008. For the sample parish this will be the average of £25,000 for 2006, £23,000 for 2007 and £20,000 for 2008= £22,667.

The Size Factor for the sample parish is 40; divided by 5.3 = 7.5 UPS.

Net assessable income for the sample parish is £22,667 divided by 1,973 = 11.5 UPS.

Total UPS = 19. Value of UPS is 19 x £400=£7,600

  • Total parish share due =£7,600
  • Note these figures are illustrative only. The actual budget requirement will be different, as will be the average total size factor, average NAI factor, and total number of UPS units. Also, in order to allow for roundings the actual number of UPS will be higher than the figures quoted above.