Proportional Giving: What It Is & How It Works


What is Proportional Giving (PG)?
PG is the new way of funding our common mission through the Southern New England Conference (SNEUCC) that is faithful, covenantal, aligned with our Conference’s mission and core commitments, and based on an understanding of generosity rooted in scripture.  Scripture invites us to give in proportion to what God has given us from gratitude.  In terms of wider church funding, PG is a financial expression of covenant commitment by local churches to support the Conference and National UCC through sharing a percentage of local church income.  It invites each of our churches to become faithful participants in a movement to make Southern New England a more just and loving part of the world.
 
How does Proportional Giving work?
With the establishment of PG, OCWM Basic Support and Conference Membership Dues – called Fellowship dues in MA and RI and Per Capita Contributions in CT – are replaced by a single way of giving. 
Instead, the church’s PG contributions are based on its historic giving level in relation to its Total Income* in a given year.  If church income decreases, wider church giving decreases proportionally, while wider church giving would increase proportionately with increased income. 
 
When will Proportional Giving begin for Conference Churches?
PG will begin in the Conference’s first year.  For 2020, churches are asked to maintain giving at 2019 levels by adding together their 2019 OCWM Basic Support and Conference Dues and making this amount their minimum gift.  Increases will also be gratefully received and will strengthen the ministries of the new Conference!  For 2021, churches will use a two-step process to determine their PG contribution (see below). 
 
How are Proportional Giving contributions determined? 
PG contributions are determined by the church itself using the following two-step process:
  • Step One – Establish the church’s initial Giving Percentage by using this equation:  Giving ÷ Total Income* = Giving Percentage.  The initial Giving Percentage is based on the church’s giving through Conference Membership Dues and OCWM Basic Support for the 2019.  This Giving Percentage will be carried over as a baseline for future years. This step is only needed once.   
  • Step Two – For future years, begin by applying the established Giving Percentage to actual church Total Income* at year’s end to determine the Proportional Giving contribution for the year to come.  Use this equation:  Prior year Total Income* × Giving Percentage = Current Year Contribution.  This step will be taken each year beyond the first.  As with individual giving in local churches, congregations will be invited to prayerfully consider increasing their Giving Percentages over time. 
 
What tools will my local church have for following the two-step process?
Local church leaders determining the church’s PG contribution will be provided with two simple spreadsheets that make the two-step PG giving determination process easy to follow.  Beyond year one, only one spreadsheet will be needed annually to calculate PG contributions. 
 
What is and isn’t included in Total Income*?
Income included in the PG Total Income calculation:
  • Operating pledge receipts for the year
  • Missions/Outreach pledge receipts for the year
  • Plate offerings
  • Investment income allocation for the year up to what the church’s spending policy permits. This would be the regular ‘draw’ on investment income per the church’s endowment policy.  (For sustainability, SNEUCC recommends a draw of no more than 5% of market value averaged over 5 years using quarterly data.)
  • Net rental income
  • Net income from programs (e.g., a nursery school)
  • Net fundraising income to general operating budget
 Income excluded from the PG Total Income calculation:
  • Capital Campaign contributions
  • One-time donor-restricted gifts for a particular purpose other than general budget support
  • Memorial gifts
  • Bequests
  • Extraordinary use of endowment funds to balance the budget.  (This means any amount used in excess of 5% of the market value of the endowment averaged over 5 years using quarterly data).
  • UCC Special Offerings (e.g., One Great Hour of Sharing)
  • Disaster relief or other one-time mission giving
  • Net income from fundraising for restricted purposes (e.g., new handbells)
  • Income from one-time sale of assets (e.g., parsonage, communion silver)
 How does the two-step PG process work in practice? 
Here’s an example of how PG would work for a sample church determining its 2021 PG contribution: 
  • Grace Church paid $3030 in Membership Dues and gave $4200 in OCWM Basic Support for a total of $7230 in wider church giving in 2019 (i.e., the year prior to beginning Proportional Giving contributions).  In that year, its Total Income* was $175,000.  It establishes its Giving Percentage (Step One):   $7,230 ÷ $175,000 = .041 (4.1%).
     
  • In 2020 Grace Church’s Total Income* is $165,000 – that is, a $10,000 change in income from the year prior to beginning with proportional giving.  Keeping in mind that for the first year of Proportional Giving the church level funded wider church giving from the year prior to beginning the new approach, the church determines its Proportional Giving contribution for 2021 (Step Two):  $165,000 × .041 (4.1%) = $6,765.
     
  • In this example, Grace’s Proportional Giving contribution for 2021 would decrease in proportion to its income from $7,230 (2019) to $6,765.  (Note:  If the church’s Total Income* were to have increased to $185,000 the resulting contribution would have been:  $185,000 × .041 = $7,585.) 
 
Is PG the same as United Church Mission (UCM) was in the Massachusetts Conference?
No, though there are many similarities.  Both approaches use a similar calculation to determine the annual giving amount.  However, UCM also included Association giving, with “in lieu” dues being distributed to the Associations that had removed UCM opt-in churches from their dues billing lists.  With PG, responsibility for funding Associations will once again be fully in the hands of Associations. 
 
What does this change mean for Massachusetts Conference churches that previously opted into UCM?
Massachusetts UCM opt-in churches will use almost the exact same process – including spreadsheet tools – to calculate PG as they did for UCM.  The difference is that now their PG contribution will not include Association funding.  Consequently, their Giving Percentage will need to decrease proportionally since Associations will again be relating to them directly about their own funding (e.g., Association Membership Dues billing).  All UCM opt-in churches will have Conference staff support for making these adjustments and transitioning to PG.   
 
With Proportional Giving is our church making a “pledge” to the wider church?
No.  With PG, the Local Church isn’t pledging a set amount to the Conference and National UCC.  PG asks churches to make a covenant to contributing this year a pre-determined percentage (based on its historic giving level) of the income it received during the previous year.  So, in fact, this is a continuous percentage of income commitment, not a one-time commitment for a pledged dollar amount. 
 
Why focus on church income rather than spending?
In establishing PG, the Conference seeks a funding approach that is responsive to the local church’s actual changing financial position.  A PG model based on spending couldn’t be so responsive.  In fact, if PG were based on spending – that is, a proportion of budgeted expenses – a church’s PG contribution would be going up at precisely the same time that its overall costs were increasing, likely placing further financial demands on the congregation at an inopportune moment.  Responsiveness to the church’s actual Total Income* means that a church’s PG contribution has a direct relationship to its relative capacity to give. 
 
What does this mean for my church’s budgeting practices? 
Transitioning to Proportional Giving will, in many cases, require some adjustments to a congregation’s current budgeting practices:
 
  • Churches that currently consider both OCWM Basic Support and Conference Membership Dues as part of their mission budgets will have minor changes to their budgets, with these two lines simply combined into a single PG amount.
     
  • Churches having a separate category for Wider Church Support – alongside operating expenses and mission spending – will only need to combine Conference Membership Dues and OCWM into PG. 
     
  • Churches that have unified budgets (i.e., members make a single pledge to the church and then the church determines the amount given as mission spending), where Conference Membership Dues are currently in the operating portion of the budget, may simply move this amount to the mission spending category.  This will more accurately represent the level of mission giving and increase the mission spending percentage of the overall budget.
     
  • Churches with a split pledge (i.e., members make separate pledges to operating budget and mission budget) have two options.  We strongly recommend a transfer to the mission portion of the budget of an amount equivalent to the old Conference Membership Dues, making no change to the budget bottom line and providing the funds needed for all mission spending. 
What if our church usually asks its members to contribute to Membership Dues?
Some churches ask members to contribute to Membership Dues, income that is relied upon to help them support wider church ministry.  It is suggested that such churches continue to invite these gifts, but instead of asking people to “pay their dues,” ask them to support Proportional Giving by making an extra designated gift.  Church leaders are encouraged to inform their congregations about how the work of the wider church supports their church and other churches, and changes lives.  Then, explain how PG replaces Conference Membership Dues and OCWM Basic Support.  Finally, invite special gifts to Proportional Giving.  Churches may want to use the same suggested amount as they currently do with Membership Dues or perhaps encourage a higher level of giving. 
 
Will our church receive a bill for its Proportional Giving contribution?
While PG giving statements and reminders of your church’s percentage of income commitment will periodically be sent to your church by the Conference – as we currently do with OCWM contributions – the church will not receive a bill for PG.  Your church will also not receive a bill from your Conference or Association for Conference Membership Dues. 
 
How will National UCC’s share of Conference Proportional Giving by local churches be determined?
PG gifts will be shared by the Conference with National UCC just as Our Church’s Wider Mission (OCWM) Basic Support have been shared previously.  However, just as local churches are being asked, the Conference will likewise calculate its annual giving to National UCC based on an established Giving Percentage applied to Total Income* it has received.  This means that the Conference will now use an approach for giving to National UCC that parallels the approach that local churches will be asked to use for giving to the Conference. 
 
What support will my church have for making the transition to Proportional Giving?
As indicated above, all churches will be provided with spreadsheet tools to help them calculate their PG contribution beyond 2020.  In addition, a variety of paper and online support resources will be made available to those implementing PG for their congregation to help them with such issues as where PG might be listed in a line-item budget, navigating a split budget/pledge situation, how PG fits into the church’s overall mission giving, and communicating generally about PG with local church members.  In-person and web-based instructional meetings will be offered throughout 2020.  In addition, contact information for designated Conference staff (once determined) will be made available. 
 
Where can I find more information about Proportional Giving now?
Information and resources about PG may be found on the websites of the Southern New England Conferences and for that of the unified Conference once this new website is operational.  Links to relevant webpages now may be found here: www.macucc.org/proportionalgiving.  
 


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