Church-Directed Allocations vs. Proportional Allocations
A Strategy for United Methodist Congregations
in the Western North Carolina Annual Conference
to Focus Apportionments to Make Disciples of Jesus Christ
How may your congregation direct its financial apportionments to best fulfill Jesus’ commandment to make disciples of Jesus Christ? How may you help the Western North Carolina Conference fulfill its vision to strengthen vital congregations?
Each year, your congregation is notified about the total financial apportionments for your District, our Western North Carolina Conference, the Southeast Jurisdiction, and the general ministries of The United Methodist Church. In many congregations, the total apportionments range from 10% to 20% of the total budget of a congregation.
Most congregations consider all these separate apportionments as one lump sum. The apportionments, however, consist of at least fifteen separate funds from four different levels of our denomination.
The District budget is set annually in each District and includes several separate funds. The Annual Conference budget is set each year at Lake Junaluska and includes four line items. The Southeast Jurisdictional budget is set every four years and includes one budget line item. The general United Methodist Church budget is set every four years at General Conference and includes seven separate items.
Each of the apportionments must be asked from your congregation. Your congregation never “votes” on the apportionments. According to our United Methodist Discipline, our Annual Conference and its leaders must encourage your congregation to pay 100% payment of all apportionments.
There are two ways for your local congregation to pay 100% of apportionments: Proportional Allocation or Church-Directed Allocation. Most congregations are not aware of the differences between the two and the implications. For decades, the financial remittance form from the Western North Carolina Conference has offered both options to every congregation.
1. Proportional Allocation Simply send in 100% of the money requested, without any instruction about the use of the monies. When a congregation chooses Proportional Allocation (or makes no choice), the Conference Treasurer then pays each fund its designated proportion or percentage of the total amount. For example, if your congregation chooses the Proportional Allocation model, the Conference Treasurer sends in automatically 36.7% of all your apportionments to the seven funds of the General Church.
2. Church-Directed Allocation Yet, your congregation has the right to direct your apportionments. When a congregation chooses Church-Directed Allocation, the Conference Treasurer then pays each fund only what the congregation has designated. For example, if your congregation chooses to give more to one fund and less to another, the Conference Treasurer follows the designation of your congregation. No other person or body in the denomination can dictate how your local church pays its apportionments. This is a local church decision.
Which model of giving is best for your congregation? If your congregation supports every fund of the District, the Conference, the Jurisdiction, and the General Church at the percentage set by each level of the denomination, simply use Proportional Allocation. This way allows others to direct your apportionments.
If, however, your congregation supports some ministries more than others, select Church-Directed Allocation and designate your giving.
The process to use the Church-Directed Allocation model is very simple:
1. Your congregation’s Finance Committee reviews each of the apportionments: District, Conference, Jurisdictional, and General Church. Such information is available through the Conference website: http://www.wnccumc.org. The Finance Committee asks which of these funds best fulfill the mission of your congregation? Every congregation may reach different conclusions.
2. Your Finance Committee may then recommend that your congregation pay different amounts to different funds. For example, your congregation may decide to pay more to its District Mission Society (# 521) and Annual Conference Vision and Goals (# 508) , and less to the General Church funds (#513-520). The goal is that the total amount of money paid by your congregation will equal 100% of the total monies apportioned to your congregation.
3. Your Finance Committee must then make its recommendation to your congregation’s Church Council or Administrative Board or other authorized body. This action does not require a Charge Conference and requires only a majority vote by your church leaders. This action does not need to approval of your pastor or district superintendent. This vote may happen at any time, but ideally before the first apportionment payments are made in any calendar year.
4. Your local church treasurer will then submit your congregation’s payments according to the decision approved by your Church Council as a Church-Directed Allocation.
When the Western North Carolina Conference Treasurer receives your payments, the Conference Treasurer then pays the funds designated by your congregation. The Treasurer may not reallocate your payments without your congregation’s approval.
If a fund receives more funds than requested, the Conference Treasurer will remit the additional funds to an authorized body, such as the District Finance Committee or Conference Council on Finance and Administration. Each body has its own policies about how to use the additional funds.
At the end of the financial year, if your congregation has paid 100% of the monies apportioned to it (line 40a of the standard financial report), regardless of where the funds are designated, the Conference Treasurer will certify that 100% of your apportionments were paid (line 40b of the financial report). Your congregation will then have paid 100% of its apportionments in ways that fulfill Christ’s command to make disciples of Jesus Christ!
I encourage every congregation to consider Church-Directed Allocation, with a focus on district and annual conference funds, as your method for paying all apportionments!
The above statement is the personal perspective of the author. Andy, a pastor for 35 years in the Western North Carolina Annual Conference, has been a delegate to the last five General Conferences, a member of the WNCC Council on Finance and Administration for 8 years, and serves on the General Church Connectional Table. He has also worked closely with all the general agencies of our denomination.
This paper was written in consultation with past and present conference and denominational leaders, especially persons knowledgeable about our financial policies and procedures. All the above statements are consistent with The United Methodist Discipline and the historic practices of the Western North Carolina Conference.
For more background information on the 2012 General Conference, see Andy’s 15 May 2012 blog at http://www.pastorandylangford.com.
Rationale for Church-Directed Allocation of Apportionments
Following the 2012 General Conference of The United Methodist Church, many local congregations must seek better ways to use their financial resources to fulfill the mission of The United Methodist Church. In addition, local congregations must reassert that the annual conference is the basic body of our denomination (Article II of our Constitution) by providing more financial resources to their annual conferences.
The 2012 General Conference rejected a new focus on creating and strengthening vital congregations and empowering annual conferences. Not one petition concerning local congregations was even voted on by General Conference. Organizational flexibility for annual conferences was rejected. Instead, our denomination maintained the primacy and status quo of its general boards, agencies, and general church programs.
For over forty years, over three billion dollars have been spent supporting the general agencies and other endeavors of our global connection. And for over forty years, our denomination in the United States has been in decline. For three years, our United Methodist Council of Bishops, the Call to Action committees, and the General Church Connectional Table looked at solutions. As confirmed in a series of Abingdon books entitled “The Adaptive Challenge Series,” we discovered that the general agencies are not accountable for measurable outcomes and that the financial basis of our entire denomination must change. In addition, the annual conferences, not general agencies, are the primary arena for equipping local congregations.
The Council of Bishops and the Connectional Table petitioned General Conference for new emphases on local congregations and annual conferences. Yet, the 2012 General Conference, influenced greatly by the general agencies, minimized any change in our current organization and how it is funded.
It is time for congregations within the United States to follow the example of United Methodist congregations outside the United States (over 42% of all United Methodists) who only pay general church apportionments to the Episcopal Fund and none to the other six general church funds. In 2011, 99% of all monies that supported the general church came from the United States. United Methodist congregations in the United States must use the monies donated to God through them in better ways.
Does a congregation in the United States have the financial flexibility that is now used by United Methodist congregations outside the United States? Is there a superior way to strengthen annual conferences and fulfill Jesus’ command to make disciples for the transformation of the world through our connection? Is there a way for local congregations to reform and renew our denomination from the bottom of our organization?
For a generation, United Methodist congregations have yielded to the “superior wisdom” of the leaders at the District, Conference, Jurisdictional, and especially the General Church led by the general agencies. Today, United Methodist congregations have the responsibility to use their own wisdom and dollars in ways to transform individual lives, local congregations, annual conferences, and the world. Local congregations, where disciples of Jesus Christ are made, lead the denomination!
United Methodists in local congregations must now learn how to set their own priorities. Churches in the United States should no longer continue to contribute to a failing general church denominational bureaucracy that is a waste of money and faithfulness to God. Congregations should use monies in ways faithful to our Wesleyan tradition.
Increasingly, many congregations believe that their monies are better spent on district missions and conference ministries and benevolences, the essential connectional ministries. These ministries are led by people known and trusted. These monies focus more so on creating and sustaining vital congregations and empowering annual conferences.
The following description of the problem, and solution, are one option for congregations to consider as they pay their apportionments to The United Methodist Church.
A Brief History of Apportionments
Apportionments are the way each local congregation in the United States contributes its fair share to the connectional ministries of our denomination for the past 40 years. For the first 180 years of our denomination, all local congregations throughout the world were asked to contribute to the larger church for distinctively connectional ministries, such as the salaries of bishops, conference expenses, and global missions. There were no general agencies other than the publishing house and mission units. At times, specific goals were set. Sharing a common vision of mission, voluntarily and with joy, congregations responded generously.
Beginning in the 1970s, as the bureaucracy of the general church grew to historic number and size financial apportionments became mandatory in the United States. Through legislation written by the general agencies, apportionments were declared to be the first missional giving of local congregations in the U.S. The expectation became, for the first time in our denomination’s history, that every United States congregation pay 100% of all apportionments.
For the past forty years, many leaders of our denomination in the United States have insisted that paying apportionments is the clearest sign of being United Methodist. General church agencies and programs have become the primary connectional ministries. This emphasis denies the very constitution of our denomination that the annual conference is the primary connectional body of our church.
A number of leaders threatened clergy and congregations who did not pay 100% exactly as designated by higher authorities. Three-fourths of all annual conferences in the United States, however, do not contribute 100% of the monies apportioned to them by the general church. With the decline in members in the United States, our denomination has reached the point at which fewer dollars will be available every year for ministry.
Over the forty years, however, more and more of the apportionment dollars have gone not to districts, annual conferences, or jurisdictional missions and structure but to the general church agencies and programs. Local churches appear to exist to support the general agencies, not the other way around. Today, general Church apportionments total 22% of all apportionments in the United States.
Because annual conferences may not reduce any of the general Church apportionments allocated to congregations, over the past years, jurisdictions and annual conferences have cut back significantly missions and ministries. Over a third of all district superintendent positions have been eliminated in the last twenty years. District projects, conference institutions, and jurisdictional ministries have been cut. In 2012, one-fourth of all conferences had to cut their budgets. Bluntly, districts, annual conferences, and jurisdictions are being squeezed between the rock of high general church apportionments and the declining income of local congregations.
For a comparison, the Presbyterian Church, U.S.A., the Protestant denomination with the second largest Protestant bureaucracy in our nation, has an annual apportionment of $5 per member per year. Our general church and its general agencies expect about $20 per member in the United States per year. In other words, our general church bureaucratic expenses are four times larger than the next largest Protestant denomination. And our denomination continues to decline in the United States.
How Apportionments Are Determined
Each year each annual conference in the United States receives from the General Council on Finance and Administration the amount allocated for each general church apportioned fund ¶808). These amounts are set by the preceding General Conference.
The general church funds then become part of the total annual conference budget. This percentage is different in every annual conference. In some annual conferences, the percentage is as low as 10%; in another conference, as high as 60%. The average is 22%.
The annual conference Council on Finance and Administration must then allocate these monies to local congregations (every annual conference has a different formula for doing so) “without reduction” (¶615). The annual conference may not make any revisions to general church askings.
Annual conferences then allocate the monies for the districts, annual conferences, jurisdictions, and general church in their own manner.
There are seven general church funds: Africa University, Black College, Episcopal Fund, General Church Administration, Interdenominational Cooperation, Ministerial Education, and World Service Fund. Each of these seven funds must be asked from local congregations in the United States.
The Southeast Jurisdictional budget, cut by one half for the next four years, goes directly to pay off the debt of Lake Junaluska Assembly, a valuable resource for our own annual conference.
In the WNC annual conference budget, 36.7% of the total conference budget goes directly to the general Church. By the Judicial Ruling # 1121, an annual conference may not adopt a policy that encourages a congregation to pay less than 100% of its apportionments.
I am not suggesting that local congregations pay less than 100% of their apportionments. I am not suggesting that monies be reallocated to pay a higher salary to a pastor or put new carpet in the sanctuary. I believe that United Methodists want to be generous to others. But, United Methodists should be more direct in how their apportionment monies are spent.
Can a congregation realign apportionment payments to the district, conference, or general church anyway? The United Methodist Discipline provides such flexibility: ¶247.14 Powers and Duties of the Charge Conference: As soon as practicable after the session of annual conference, each district superintendent or designated agent shall notify each local church in the district what amounts have been apportioned to it for World Service, conference benevolences and other general Church, jurisdictional, and annual conference funds. In preparation for and at the charge conference, it shall be the responsibility of the district superintendent, the pastor, and the lay member(s) of the annual conference and /or the church lay leader(s) to interpret to each charge conference the importance of these apportioned funds, explaining the causes supported by each of them and their place in the total program of the Church. . . . Payment in full of these apportionments by local church is the first benevolent responsibility of the church (¶812). Please note, the Discipline does not say payment in full of each individual fund allocated must be paid, only payment in full.
The Charge Conference of the congregation does not take action on the apportionments. The Charge Conference receives the request. There is no vote to accept, amend, or reject the amount. There is no dialogue or negotiation. This method is called in the appendix of the Discipline “notification.” The assumption is that there will be full payment. Again, The United Methodist Discipline does not specify full payment of each fund, only full payment.
United Methodists Are Generous People
All United Methodists want to be generous in their giving for ministries and missions beyond their local congregations. Our denomination has regional and global connectional ministries that are essential to sharing the love of God with others. We cannot focus only on our own congregations. Our Wesleyan tradition is to be extravagant in our financial giving for the transformation of the world. Most congregations believe in paying 100% of the total of all funds that have been apportioned to them.
How to Be Generous?
Each individual apportioned ministry or agency throughout the annual conference budget does not need to be paid at 100%. Three-fourths of all conferences in the United States act this way already. All of the United Methodist conferences outside the United States give nothing to the general church except for the Episcopal Fund.
There are at least two models by which United Methodist congregations may pay their full apportionments. It is up to each congregation to determine which model best fulfills their understanding of connectional ministry.
The first method is “Proportional Allocation.” If a church selects Proportional Allocation (or selects no option), the monies paid to the conference for apportionments are divided between all funds in the proportion of the church apportionment for that line to the total apportionment as indicated by the conference budget.
For example, when a congregation in the WNC annual conference pays all its apportionment dollars in one sum, 36.7% of the total payment automatically goes directly to the general Church. Of those monies, 19% go to World Service and 2% to General Administration (the two funds that underwrite most of the activities of the general church agencies that have failed our denomination for forty years).
The second method is “Church-Directed Allocation.” The church treasurer checks the self-allocation box. The church treasurers then pays the designated amounts on those specific fund line items.
No local congregation is required to pay every line item at 100%. The only expectation is to pay 100% of the total monies requested. For example, a congregation may choose to pay more monies to a district or conference or jurisdictional fund and less money to a general Church apportionment.
For example, like congregations outside the United States, a congregation in the Western North Carolina Annual Conference may pay only the Episcopal Fund (#503).
Especially, local congregations should choose not to pay the two general Church funds that are the least effective in the task of making disciples by strengthening local congregations: World Service (#520) and General Administration (#515). These two funds underwrite the general church agencies and their bureaucracies, the very agencies that wrote the legislation to require 100% payout without reduction. These two funds primarily support the status quo of continual decline of our denomination.
The total amount of these two funds in the WNCC budget total 21% of all apportionments; 19% for World Service and 2% for General Administration. If every Western North Carolina Conference congregation redirected just the monies from World Service and General Administration to District Mission Societies, this would be an additional $3.3 million dollars available in the Western North Carolina Conference for mission and ministry! If congregations contributed only to the Episcopal Fund, almost $5 million would be available for other purposes such as new congregations, conference institutions and benevolences, and new mission outreach!
Who in the local church makes the decision about how much to pay their apportionments? The Charge Conference does not vote on the apportionments, that is not the place. The Charge Conference is simply notified of the total funds requested.
Pastors unilaterally cannot reallocate funds. Pastors are not in charge of congregational finances. Pastors have many responsibilities, including ¶340.2.c.2.c. “To provide leadership for the funding ministry of the congregation. And ¶340.2.c.2.e. “To lead the congregation in the fulfillment of its mission through full and faithful payment of all apportioned ministerial support, administrative, and benevolent funds.” This full payment of all funds speaks to the amount paid not which funds receive the monies. Pastors must allow the laity in their congregations to make such decisions. Pastors, however, may share this paper with their church leaders.
It is most appropriate that a congregation’s Finance Committee recommend to its Church Council or other appropriate body how to allocate its apportionments. By action of the Church Council, the church treasurer would then send in payments as designated.
Note to the Western North Carolina Conference Council on Finance and Administration
The WNCC Council on Finance and Administration has been sympathetic to this approach over the past twelve years. To encourage Church-Directed Allocations, the WNCC CFA should:
1. Continue to design all payment forms to indicate clearly the two options of giving.
2. Encourage congregations to choose the method best suited to each congregation.
3. Establish policies to handle over-payments to districts and the conference.
4. Support 100% payout of the Episcopal Fund as a prior-claim. The annual conference structure depends on the role of the resident bishop.
5. Each district should emphasize their funds, such as District Missions, that may receive additional monies.
6. Instead of just four unified funds, the WNCC should consider adding several more funds to help congregations focus their giving. Such individual funds might include congregational development (to start new churches), church revitalization (to support local congregations with new initiatives), ministerial scholarships (why should 75% of all the Ministerial Education Fund leave our annual conference?), volunteers in mission (for global hands-on missions), and regional and global missions (based on approved advance specials). Such funds would encourage local congregations to increase their giving for missions.
United Methodist congregations must be faithful and generous stewards of their financial resources to fulfill the mission of The United Methodist Church. United Methodist congregations must help re-establish the role of the Annual Conference as the basic body of the denomination?
Every United Methodist congregation in the Western North Carolina Annual Conference, and in the United States, should seriously consider Church-Directed Allocation of all apportionments and designate more monies away from the general church and more to district, conference, and jurisdictional funds.