The Rector's Letter: Understanding Church Finances

Dear friends,

You might remember the scene in ‘Monty Python’s Life of Brian’ where two Palestinian would-be revolutionaries are listing grievances about the occupying Romans.  One says to the other ‘What have the Romans ever done for us?’  Silence follows, then slowly they begin to identify some of the benefits the Romans have brought: roads, law and order, drains, and so on.  Soon they have such a long list they stop airing their grievances.

What’s that got to do with our church finances?  Well, by far the largest item of our annual expenditure is the Parish Share we pay each year to the Diocese.  This year it’s just over £55,000: next year it’s £57,000.  Talking about ‘the Diocese’ can often suggest some remote, bureaucratic body into whose black hole we are asked to pour our money.  So what is the Parish Share, and what has the Diocese ever done for us?

Much the most important use of the Parish Share is to pay clergy stipends and pensions.  Nearly 63% of the Parish Share goes into the ‘pot’ from which stipends and pensions come.  Time was, 20 or 30 years ago, when Dioceses were cushioned by subsidies from the Church Commissioners nationally.  They effectively paid for a third of all clergy pensions.  Those days are now gone.  All the money for stipends and pensions in this Diocese has to come from the regular giving of members of the congregation.  The Church nationally is doing what it can to keep the amounts required to a sustainable level: clergy pay is currently frozen; the proportion of stipend used to determine the level of pension is now being based on a reduced level of a curate’s stipend rather than that of an incumbent; from next year clergy will have to work till 70 to be eligible for a full pension.

But the bottom line remains: stipends and pensions depend upon the Parish Share being paid in full.  And the policy of the Chester Diocese is that parishes which consistently fall behind with the Parish Share are likely to find that the next time there is a clergy vacancy they may only be allowed a half-time priest, or face being merged with another parish.

Of the remainder of the Parish Share, 9% goes to maintain clergy housing, and 16% to support the work of the Diocesan ‘centre’.  This gives parishes access to such things as free legal advice, and advice on a wide range of issues – from heating and lighting to children’s work and much else besides.  A further 8% goes to train the clergy of tomorrow, and the final 4% goes to support the work of the Church of England nationally.

So parishes get a good deal out of the Parish Share.  But of course the Parish Share doesn’t cover any of the day-to-day running costs of a parish: gas and electricity, insurance and repairs and a host of other necessary costs that have to be met simply to ‘keep the show on the road’.  Even after keeping our costs down to an absolute minimum, we budgeted this year for a total expenditure (including Parish Share) of £87,000.

All of that has to come from our regular giving and other smaller sources of income.  None of that currently comes from our giving to the Building Fund, which up till now has been quite separate.  The first call on any parish’s resources has to be its ‘General Fund’, from which it pays the Parish Share and all other ongoing expenses.  The Diocese requires that to be our first priority when it comes to allocating our resources.  And the vast majority of the Parish Share makes its way back to the parish in one form or another.

These are not easy times financially for many people, and the prospects ahead are uncertain.  But it is important to understand that there is a direct link between what we receive in benefit through the Diocese, and what we give to the ‘General Fund’ out of our own thankfulness for what God and his Church mean to us.

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