Description of Sacred Gifts for Administration Formula
Sacred Gifts for Administration paid by the congregations are the principal revenue source for the diocesan budget. Other revenue sources include income from the Diocese’s long-term investments and endowment.
The Sacred Gifts for Administration formula is calculated separately for each sacred gift (EA, CFA, and RCMA) by using the total expense for each sacred gift and dividing the costs among all the parishes based on their Normal Operating Income (Line A on the parochial report) from two years prior.
The formula is as follows:
NOI = Net Operating Income
TOI = Total Operating Incomes
NOI for individual parish (divided by) TOI for the Diocese = Parish’s percentage
The percentage can be applied to all three sacred gifts. So every parish then pays the same % of each sacred gift’s total expense. Here is an example:
(NOI for parish) $245,777
(Total NOIs) $42,456,222
Result = .006
Then use that percentage to figure out the portion of any sacred gift that the parish should pay:
(RCMA) $423,500 x .006 = $2,541
The RCMA sacred gift for this parish is $2,541
What does EA mean?
The Episcopate Sacred Gifts for Administration covers the outstanding balance of the Episcopate Budget after the income provided by the endowment has been allocated. The Episcopate Budget funds the following items for which the total EA is divided between parishes using the general sacred gift formula.
Here’s what the canons have to say about the Episcopate Sacred Gifts for Administration:
SEC. 7.2 7.2.1 The Standing Committee shall determine, on or before the first of May each year, the amount needed for the support of the episcopate in the Diocese during the ensuing calendar year, in accordance with the standing directions of the Convention, and, after deducting therefrom the estimated income to be received from investments, shall report the balance to the Diocesan Council as the amount to be assessed upon the parishes, missions, and chapels of the Diocese in such manner as the Convention shall from time to time direct, and in the absence of any such direction in any year, in the manner last directed by the Convention.
7.2.2 Income from the Fund for the Endowment of the Episcopate or from any other fund for that purpose shall be added to the proceeds of the above assessment, and payments out of the combined total shall be made by order of the Bishop and the Standing Committee, or in the absence or disability of the Bishop, by order of the Standing Committee alone.
The Executive Office, on or before November 1st of each year, shall notify the proper officers of each parish, mission, or chapel of the amounts of the Assessments for the Support of the Episcopate, for Clergy Financial Assistance, and for Retired Clergy Medical Insurance for the ensuing calendar year. It shall be the duty of such officers to forward to the Treasurer of the Diocese one quarter of the amount of such assessments upon receipt of bill therefor, and the remaining three quarters not later than June 1st of the ensuing calendar year. Any parish or mission which at the time of meeting of any Convention, annual or special, is delinquent in its payment for the current or any previous year of the amounts so required of it shall be reported by the Executive Office to the Secretary of the Convention as liable to have forfeited its right to representation and vote in that Convention.
7.4.2 Not later than two months before the meeting of each Stated Convention any parish which has not paid and does not expect to be able to pay before that Convention its Assessments for the Support of the Episcopate, for Clergy Financial Assistance, and for Retired Clergy Medical Insurance of the previous year, but desires to have representation in such Convention, shall submit to the Committee on Finance and Property of the Diocesan Council any considerations which the parish authorities believe should move the Convention to grant it representation in spite of such failure. That Committee shall report to the Convention, for the information of the Committee on Claims of Laity to Seats, its recommendation; and the Committee shall not report favorably upon the application for restoration of the right to representation of any parish which has not pursued the above course.
7.5.2 The Commission on Clergy Salaries and Pensions, in these Canons hereinbefore provided for, shall estimate and recommend to each Stated Convention the amount believed to be necessary, in the form of grants or loans, in the next ensuing calendar year; (a) to augment to the minima, as above established, the compensation of clergy whose churches are unable to pay that compensation in full, (b) for making such payments of Church Pension Fund assessments as may be necessary to prevent in this Diocese the existence of such arrearages in Church Pension Fund assessments as might impair the rights of the clergy and their surviving spouses and children under the Church Pension Fund system, and (c) to provide interim financial assistance to displaced clergy as may be requested by the clergy in writing for relocation or other necessary expenses. The Commission shall likewise recommend an amount to provide financial assistance grants to clergy and parishes to facilitate clergy sabbath leaves, provided the Commission and the Bishop are assured that neither the clergy nor the congregation can meet these financial needs themselves.
7.5.3 Such sum as may be approved by the Convention for the above purposes shall be known as “The Clergy Financial Assistance Assessment,” and the Diocesan Council shall assess the same upon and collect it from the parishes in union with the Convention on the same basis and in the same manner as in the case of the Assessment for the Support of the Episcopate.
7.5.4 The Treasurer of the Diocese shall be the Treasurer of the Clergy Financial Assistance Assessment.
7.5.5 The Treasurer shall, upon recommendation of the Commission, make payments of loans and grants: (a) to augment the compensation of clergy to amounts not exceeding the minima fixed by the Convention (see Resolutions of Convention), (b) to cover arrearages in Church Pension Fund assessments, and (c) to provide assistance to the clergy above provided for.
7.5.6 The Commission, may, at its discretion, withhold any of the payments above provided for, in individual cases; provided, however, that whenever such payments are withheld without the consent of the parties affected, the Commission shall state the facts in its annual report to the Convention.
What does RCMA mean?
Retired Clergy Medical Assistance is the fund with which the Diocese of Pennsylvania pays to supplement the National Health plan given to all retired clergy by the Church Pension Group. Our Diocese chooses to pay this supplement to upgrade the existing plan to a comprehensive plan. The RCMA sacred gift contributes directly towards paying for Retirees’:
Life insurance supplement
Widows medical insurance (and half the premium for clergy spouses under 65).
What does CFA mean?
CFA stands for Clergy Financial Assistance.
Questions & Answers
Why should my congregation support the diocesan budget?
As members of an Episcopal Diocese, we are a church catholic, bound together not only by law and canon, but by mutual agreement in the Body of Christ. The work of our congregations, and the Orders of the Clergy, stem from the Bishop.
The work of the Church is done through the congregations, but we maintain our universality and union through the Bishop and the Diocese. We are not, nor can we be, congregational entities.
If we wish to eliminate our support of the National Church or of our own bishops, our assistance to one another, or any of the other things we do as a Diocese, we need to do that together in Convention, not as individual congregations refusing to pay a fair share of the budget we have all adopted together.
Is the Sacred Gifts for Administration fair?
The Diocese of Pennsylvania calculates a separate sacred gift for each fund for each church in the Diocese based on their ability to pay. Consider the fact that most Dioceses calculate their sacred gifts based on a scale that brackets the NOI into large categories. For example a very common formula looks like this:
$0 – $50,000 : 3%
$50,000 – $100,000 : 14%
$100,000 – $150,000 : 16%
$150,000 – $200,000 : 18%
$200,000 – $250,000 : 20%
Over $250,000 : 22.25%
Who decides how much the sacred gift is?
The entire Diocese makes the decision. The Convention approves the sacred gift formula. The Convention is the “Annual Meeting” of the Diocese. The clergy of the Diocese and representatives of every congregation assemble to make decisions for our common life.
Who decides what happens to the sacred gift money?
The entire Diocese makes the decision. Every year the Convention approves a budget to support the Bishops and the diocesan program.
Who puts the budget together?
The Budget Committee of the Diocesan Council drafts the budget. Every program, committee, and staff department prepares a request, called an “asking,” and submits it to the Budget Committee.
In the asking it is necessary to account for what was accomplished with the previous year’s allocation, what will be done with the current year’s allotment, and why funds are needed the next year. A member of the Budget Committee is assigned to discuss the asking with the person who submitted it.
The Budget Committee presents the Diocesan Council with a balanced budget based on available projections of revenue. The Diocesan Council must approve the proposed budget before it can be put before the Convention of the Diocese.
Have a question that you don’t see listed?
Please contact the Finance Department at 215-627-6434 x145, and/or submit your question to firstname.lastname@example.org