Proposed New Diocesan Assessment Formula

The Case for Change: what is being proposed, how we trust and pray it will unfold

Following are the reflections of the assessment formula review committee on their thinking about the assessment formula review process and how they addressed some specific concerns about the changes proposed:

Why does the church always have to talk about money?

Money is a gift from God, another instrument within the Kingdom of God. Within this divine culture, money is best used for the sake of God’s mission in the world. As members of the Church we use our money as a tool for achieving the goals of God’s culture: making peace, proclaiming God’s love, welcoming people into our fellowship, encouraging discipleship, living in prayer and daily offering our sacrifice of praise and thanksgiving to God. Secrets and resentments about money are destructive of our common life as a church.

Why does my parish have to pay into the diocese?

The congregations and the diocese depend on each other for their existence, just as our diocese and the Episcopal Church USA depend upon each other for existence. The Bishop and his staff provide leadership, guidance and counsel to the people and congregations of the diocese, promoting spiritual and financial health, growth and management. Diocesan staff coordinates ministries and mission initiatives that reflect the needs and aspirations of the people of the diocese, working locally, in area ministries and extending beyond the Bay Area. In order for the mission of God to be expressed in the work of the diocese, congregations give generously.

Is there a theological basis for this arrangement?

In the early Church the sharing of goods was the source of the early Church’s koinonia. The word koinonia describes the early Church’s fellowship and work in community. Koinonia suggests a way to abundantly share resources within congregations and between congregations in the diocese. Koinonia means mutual support in the work of ministry. A congregation supports the mission and ministry of the diocese, which in turn must support the congregation. Giving strengthens the koinonia of the congregations of the diocese, as each gives to support the needs of the others and discovers common purpose in ministry. This happens best when relationships between congregations are honest, open and mutual and if the relationship between the diocese and the congregations is transparent. We need to focus our energy on our common work of fulfilling the mission of God. The primary goal of generosity in the Church is to empower this work. Congregations must consider their participation in the larger work of the diocese, evaluate their sharing in that work, and consider how their sharing must change.

How will we build relationships that are transparent and communicate openly?

To support more open and transparent communication from the diocese , the proposed budget will now be separated into the Diocesan Administrative Budget (DAB) which identifies the fixed costs of doing business including the salary, pension and benefits of the Bishop and his staff – roughly 65% of the budget – occupancy cost, utilities and the like and the Mission and Ministry Budget (MMB) which reflects the programs, ministries development and missions we support as a diocese to invest in the work and health of congregations, their members and their communities. It includes ministry development, mission congregations, ethnic and multicultural ministries, area ministries, youth and young adult ministries, campus ministries, and the work of the various commissions of the diocese. The diocesan staff works diligently to manage the resources received with integrity, creativity and in a spirit of abundance.

What is the budget for the diocese? How much of it is received through assessments?

The total proposed budget for 2011 is $3,807,960. Like every family, small business, corporation and governmental entity, this is a necessary reduction from 2010 but it will not significantly impact ministries or mission. Assessments on the congregations in the diocese account for $3,027,960 or 80% of the total. The remainder comes from endowment income and miscellaneous sources. By comparison, the Episcopal Church USA (ECUSA) asks each diocese to contribute 21% of its income to the national church.  The Diocese of California gave ECUSA $715,000 in 2010, approximately 21% of our income.

Why are you separating out the administrative and the ministry parts of the budget?

An organization that spends all of its energy on maintenance will not thrive. For an organization to grow generatively there must be some greater mission that calls people to generosity, empowerment and action. We want a process that will empower congregations to directly determine funding of the MMB. Each congregation is invited to respond, not only with an amount of support, but also with a designation to specific ministries or categories.

What is the proposed new assessment formula?

A new multi-year assessment formula is proposed that will be fully realized over six years. This new formula will include three categories: Five percent assessment on the first $62,000 of income, a declining assessment percentage on income over the minimum and an increasing voluntary contribution percentage over the minimum.

What is the 5% assessment on the Minimum?

The DAB and MMB are both supported by this first category of assessment of 5% on the first $62,000 of each congregation’s Total Operating Income (TOI), as defined in the congregation’s parochial report. The $62,000 represents the amount it would cost a parish to hire a full time priest at the diocesan salary minimum for a newly ordained person. Although the actual salaries of clergy in congregations vary widely from this amount, we believe that 5% of this minimum is a way to have each congregation pay to support the work of the diocese. Every congregation must pay this amount.

What is the additional assessment?

This additional assessment is based on a percentage of each congregation’s TOI in excess of the minimum and supports both DAB and MMB budgets. This percentage will decrease each year over six years:

Year 1  17% on the amount of income over $62,000

Year 2 16% on the amount of income over $62,000

Year 3  15% on the amount of income over $62,000

Year 4  14% on the amount of income over $62,000

Year 5  13% on the amount of income over $62,000

Year 6  12% on the amount of income over $62,000

What is the MMB Contribution?

Unlike the assessments which support both DAB and MMB, this contribution is a voluntary one directed solely to MMB and based on a percentage of each congregation’s TOI in excess of the minimum. This voluntary percentage will increase each year over six years:

Year 1       3% Mission and Ministry Contribution

Year 2       4% Mission and Ministry Contribution

Year 3       5% Mission and Ministry Contribution

Year 4       6% Mission and Ministry Contribution

Year 5       7% Mission and Ministry Contribution

Year 6       8% Mission and Ministry Contribution

Each congregation will be asked to designate which ministries and missions it wishes to support with up to ½ of its voluntary contribution.

Reservations have been expressed concerning whether the voluntary contributions will in fact be made and whether or not the diocese can operate on the revenues generated in years 5 and 6.

What are the Mission and Ministry Budget funding opportunities?

We are going to begin this new model of generosity by asking congregations to select from five categories of current mission and ministry work in the diocese. These are:

  • Mission Congregations: support congregations moving from mission to parish status and churches with specific development needs.
  • Outreach Ministries: Episcopal and ecumenical agencies, networks, diocesan committees and chaplaincies that represent collective efforts to minister to others.
  • Diocesan Support Ministries: resources for congregations through commissions, committees and divisions that work to enable congregational potential.
  • Ethnic and Multicultural Ministries: promoting ministries that cross the cultural, racial and ethnic boundaries of our society and show us more fully the face of the Church.
  • Outside Diocesan Support: supporting the work of the Episcopal Church, Millennium Development Goals and missionary work.

Why should churches be allowed to designate half of their MMB Contribution dollars?

This allows members of congregations to connect personally with the ministries they support, and it allows congregations to select ministries that reflect their own vision, mission and core values.

What if my parish can’t accept its total MMB Contribution?

If a church is unable to accept its MMB Contribution in total it will submit in writing the reasons why. The Rector or Vicar and the Senior Warden will sign this explanation. Copies will be sent to the Bishop, the Department of Finance, the Department of Congregation Development, the Executive Council and assessment formula review committee for appropriate action.

Why are you taking six years to make this change?

We are stretching ourselves to change the way we work together as a community and we cannot do it in a healthful, sustainable way overnight. This slower pace of change gives us the opportunity to review our progress and make adjustments along the way, if necessary. In fact, the assessment formula and the DAB and MMB will be reviewed annually to assure appropriate ministry, mission and administrative funding.

Does this mean that the assessment formula will continue to change?

We hope so. From time to time the fair balance in giving from congregations to the diocese must be recalibrated so that each community is giving in terms that allow the greatest amount of generosity and the greatest support for the congregations. Otherwise congregations will be pressured to generosity that defeats the normative value of koinonia in the diocesan family

How do groups in the diocese request funding under the Mission and Ministry funding opportunities?

Requests for funding from MMB will not change. Each ministry that wants funding for the next budget year will submit in writing to the Program and Budget Committee its purpose or mission, its goals and plans for the coming year, and a progress report on how it is reaching its goals. A brief explanation of its proposed funding request, along with the percent of the total budget it is requesting from diocesan support will also be included.  The Program and Budget Committee then recommends the budget to the annual convention for its vote.

How will ministries and mission initiatives be held accountable for their funding?

A year-end financial statement will be required for any ministry receiving financial support from the MMB.  The financial statement will be presented to the Program and Budget Committee and to the Audit Committee at the same time as funding requests are due, whether or not renewed funding is being requested.

Will the ministries in the MMB funding opportunities remain the same every year?

No. We hope that new mission initiatives and ministry opportunities will arise in the diocese as a result of this process. The vision of being bound to one another can empower congregations to come together and envision possibilities for ministry. When two or more congregations capture the excitement of a single vision, great things can be accomplished. Joint projects can be submitted for consideration beginning in the spring of 2011. The Bishop and Executive Council can also add new work to the MMB funding opportunities.

Will the ministries in MMB funding opportunities continue to be funded year after year?

No. Diocesan mission and ministry must continually be evaluated in order to discern its contribution to the goal of pursuing God’s work in the world. If work has ceased to be generative for the whole, then it must be retired for the sake of the mission and ministry of the diocese.

Can’t my parish just accept 100% of the MMB Contribution but spend that money on local outreach?

Every congregation can give as much as they want to local outreach, but it will not be reflected as a response to the Contribution for the MMB. Only the funds you commit to the MMB Contribution will be counted toward your response to the MMB Contribution request.

Can we give our financial support directly to the ministries in the MMB?

No, all giving must go through the Diocesan Treasurer’s office. The Treasurer will manage all receipts in such a way that they are pooled, and expenses will be paid out of the pool which will provide an ability to manage cash flow. Congregations will not receive credit toward giving to the MMB if they send contributions directly to specific ministries.

Does this system promote the integrity and generosity of the givers?

We hope so! There are different ways that we try to help congregations give to the MMB funding opportunities honestly, lovingly and transparently. For example, a church receiving financial support from the MMB will not be allowed to specifically itemize its gift to itself. The goal is to build koinonia in the diocese and we trust that congregations will take up giving in this spirit.

Who considered these changes? These changes were considered by and proposed for further conversation by the Dept. of Finance including Bob McCaskill, Treasurer, Shelton Ensley and Roulhac Austin from Executive Council and Peggy Greene and Betsy Munz based upon the work of the Assessment Formula Review Committee: Shelton Ensley, chair, Bob McCaskill, Roulhac Austin and the Rev’s. Phil Brochard, Tommy Dillon, Paul Fromberg, Terri Gotzinger, Leonard Oakes, Jason Parkin, Lauran Pifke, Chris Rankin-Williams, Steven Strane and Sylvia Vasquez.


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