Proportional Giving: What it is and How it Works

Proportional Giving: What it is and How it Works

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. It 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.
 
How does it work? OCWM Basic Support and Conference Membership Dues (Fellowship dues in MA and RI and Per Capita Contributions in CT) and United Church Mission (UCM) are replaced by a single way of giving. A church’s PG contributions are based on its historic giving percentage multiplied by its Total Income* in a given year. E.g., $150,000 Total Income X 2% Giving Percentage = $3,000 PG Contribution
 
When will PG begin? For 2020, we asked churches to maintain or increase giving to OCWM Basic Support and the Conference at 2019 levels. If you were a UCM church, we asked that you maintain your 2019 UCM minus your Association dues. We are asking that churches begin using the PG formula for determining their wider church contribution in earnest in 2021.  
 
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 a spreadsheet that make the two-step PG giving determination process easy to follow. 


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 PG contribution:  Prior Yr. Total Income X Giving % = Current Yr. PG Contribution

  • In 2019 Grace Church paid $3030 in Conf. Membership Dues and gave $4200 in OCWM Basic Support for a total of $7230 in wider church giving in 2019. That year, its Total Income* was $175,000.  It establishes its Giving Percentage: $7,230 Giving  ÷  $175,000 Total Income  =  4.1% (.041)
  • For 2020 Grace Church maintains its 2019 giving levels: $3030 Conf. + $4200 OCWM = $7,230 Total
  •  In 2020 its Total Income* fell to $165,000. Grace determines its 2021 PG Contribution as follows: $165,000 Prior Yr. Income X 4.1% Giving  =  $6,765 PG Contribution for 2021.
  • In this example, Grace’s PG contribution for 2021 would decrease from $7,230 (2019 and 2020) to $6,765 in 2021 in proportion to its decreased income from 2019 to 2020.  (Note:  If Grace’s Total Income* would have increased to $185,000 in 2020, its contribution would have increased:  $185,000 × .041 = $7,585.

* please see above list of what’s included in Total Income
 
Is PG the same as United Church Mission (UCM) was in the Massachusetts Conference? No, UCM also included Association giving.  With PG, responsibility for funding Associations will be fully in the hands of Associations and churches will pay their Association dues directly to the Association.
 
What does this change mean for Massachusetts Conference churches that previously opted into UCM? MA UCM opt-in churches will use a very similar process – including spreadsheet tools – to calculate PG as they did for UCM.  The difference is that their PG contribution will not include Association funding.  
 
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 the national UCC.  PG asks churches to make a covenant to contribute annually a percentage of the income it received during the previous year.  This is an ongoing commitment to contribute a percentage of income, not a one-time commitment of a pledged dollar amount. 
 
Will our church receive a bill for its PG contribution? No, the church will not receive a bill for PG. However, PG giving statements and reminders of your church’s commitment will periodically be sent to your church by the Conference – as we currently do with OCWM contributions.
 
How will National UCC’s share of Conference PG by local churches be determined? PG gifts will be shared by the Conference with the national UCC just as Our Church’s Wider Mission (OCWM) Basic Support have been shared previously.  However, as with the local church, the Conference will calculate its annual giving to the national UCC based on an established Giving Percentage applied to the Total Income* it receives.  Thus, the Conference will use a parallel approach for giving to the national UCC that local churches will use for giving to the Conference. 
 
What support will my church have for making the transition to PG? 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 support resources will be available to those implementing PG for their congregation to help them with such issues as when PG is 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. Finally, Rev. Dr. David Cleaver-Bartholomew, the Conference's Director of Stewardship and Donor Relations is available to assist churches. 
 
Where can I find more information about PG now?
Information and resources about PG may be found on this website. You may also call Rev. Dr. David Cleaver Bartholomew, Director of Stewardship and Donor Relations at 315.753.1375, or email him at cleaver-bartholomewd@sneucc.org  David will be happy to assist you and your church. 

New! This PowerPoint, filled with useful clarifying notes, will help your congregation understand proportional giving. 

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