Church Finance

What we give - 80%

PCCs are legal charities and, as such, are exempt from income tax. The tax which has been paid on the giving of Church people can be recovered from the Inland Revenue and is one means of good stewardship of resources.

The Government announced some time ago that it would review the giving arrangements to Charities to make the whole process simpler. As a consequence of statements made in this year’s Budget the new ‘giving’ arrangements for individuals, effective from 6th April 2000 are briefly summarised below.

  • Abolish the £250 minimum limit of Gift Aid donations so that the scheme will apply to any donation, whether large or small, regular or one-off.
  • Withdraw the separate tax relief for payments made under a Deed of Covenant and give all relief for such payments in future under the Gift Aid scheme.
  • Replace the old documentation with a new, simpler and more flexible Gift Aid declaration.
  • Remove the requirement that donors must pay income tax at the basic rate equal to the tax deducted from their donations - in future donors will simply have to pay an amount of income tax or capital gains tax, whether at the basic rate or some other rate, equal to the tax deducted from their donations.
  • Allow donors to give a Gift Aid declaration over the phone without having to complete and sign a paper declaration.
  • Allow donors to claim higher rate tax relief for their donations against either income tax or capital gains tax.

In April and May of this year staff of the Parishes Funding Department for the Diocese of Southwell arranged a number of seminars in Nottingham, Southwell and other areas of the Diocese, on the practical applications of the new arrangements announced in the Budget. Maureen Hallam (the Tower Fund Raiser) and I attended separate seminars and both of us found them very informative and helpful. Specimen material was available for distribution and contact names were made available for guidance in the future. It was pleasing to see that these seminars were both well attended and indeed, some additional seminars had to be arranged to meet the demand.

How does this affect St Peter’s?

In practical terms the forms that we previously used (prior to 6th April) at St Peter’s have been revised and are based on the specimen forms produced by the Diocese. There are two forms. One is called a Gift Aid Declaration form, which is intended for use mainly with one-off donations. Previously there used to be a minimum value of £250 for this type of donation but now there is no minimum amount and the Declaration, once signed, remains valid until rescinded by the giver.

The second form is called a Pledged Gift Form and will be the one used most frequently. This form is the direct replacement for the covenant form. It is simple to complete but essentially it serves the same purpose as the previous covenant form. One major difference is that there is no time limit for a pledged gift whereas there is a four year limit on covenants.

The Funding Campaign for St Peter’s took place prior to these new arrangements so that the majority of givers who covenanted donations completed the covenant form (signed, dated and witnessed prior to 6th April) and those remain valid up to four years from the time of completion. There are some givers who indicated their giving intentions after 6th April and these individuals have completed (or have been sent for completion) a copy of the new Pledged Gift Form.

In order for St Peter’s to reclaim the tax on the amounts given, in the new arrangements the individual must pay an amount of income tax or capital gains tax at least equal to the tax that St Peter’s reclaims on the donation in the relevant tax year. This is currently 28p for each £1 given. Unless this condition is met the individual should not indicate that tax can be reclaimed. Both the new forms mentioned above carry the appropriate wording and reminder about the condition.

It is encouraging that since the end of the Funding Campaign several additional pledged gift donations have been received which has boosted the total by an additional £1,500 so far. I hope that more members of the congregation, especially those on the Electoral Roll, who have not already contributed, may now feel in a position to do so. Information can be obtained from me directly or via. the Church Office or PCC members.

Other ways of giving

Not everyone is able to donate money either by means of a pledged gift or by free will offering using the envelopes we provide, but there are other ways of supporting St Peter’s.

Those who are able to do so can contribute their time and skills in a variety of ways, and a few suggestions (by no means exhaustive) are listed below:

  • Assistance with special collections/street collections
  • Assistance with church social arrangements
  • Assistance on special occasions in church, e.g. donations of flowers, help with decorating, cleaning, standing in for the verger, etc.
  • Assistance in the Coffee Room - serving, clearing away, making biscuits, cakes, sandwiches
  • Help with Sunday School activities
  • Joining various Church committees
  • Responding to special requests

St Peter’s is fortunate to have a large number of helpers but there is always room for newcomers to help lighten the load. We now have a new Rector, so let us also take the opportunity to involve and welcome new people with fresh ideas to take forward its ministry.

Richard Medford

Where the rest comes from - 20%

The following report, prepared by the Church Commissioners for use in parish magazines, shows where the rest of the money comes from.

1999 results

We are pleased to be able to report a year of very good investment returns in 1999. With assets achieving a 227% total return, we outperformed our benchmark by 1.5%. The market value of our assets stood at £4,400m total and in 1999 we contributed £156.1m towards our support for the Church’s ministry.

Financial context

But it is important to remember that our income does not and never could meet more than a relatively small share of the Church’s overall running costs. In 1999 these were in the order of £760 million and the £156.1 million we provided represents little more than 20% of that total. To spend more would be to fund today’s Church at the expense of tomorrow’s.

The lion’s share of the Church’s running costs is provided by parishioners. This includes the major new commitment taken on by parishes in the shape of funding clergy pensions earned after 1998.

“Closing the gap”

Close followers of our fortunes will know that last year, despite good investment performance, our spending commitments slightly outstripped our assets. This is still broadly the case, the gap arising from the Government’s withdrawal of tax credits on dividends. Until we have closed that final gap we cannot, in all prudence, increase our present overall financial support in real terms. This makes it all the more important that we try to get the best possible value out of the money we can spend.

What does our support for the Church mean to you?

We target the greater part of the funds we provide for parish ministry towards those dioceses where financial need is greatest. And our payments towards the pensions of retired clergy - who often continue to minister in parishes - and towards the costs of bishops and cathedral staff, benefit parishes in all dioceses.

In 1999 we provided:

  • £20.6m parish ministry support, of which £15.1 was targeted to support parish ministry in areas of greatest need
  • £3.5m for bishops’ stipends
  • £5.7m for cathedral clergy stipends and grants towards staff salaries
  • £86.9m towards existing clergy pension liabilities (i.e. the bulk of this cost)
  • £17.3m to ease the impact of the new (parish/diocesan) pensions contributions scheme
  • £11.8m for bishops’ stipends, housing, staff and other working costs
  • £10.3m towards other costs including church buildings, other church bodies and administration - the last down 30% in the last decade.
Forward look

We nonetheless aim to look for ways of increasing our support for ministry in areas of need and opportunity in the years ahead. Such support has always been a vital part of our mission to serve the Church and in 1999 we re- affirmed our key objective as:

to increase the unsustainable amount of our support for parish ministry in areas of need and opportunity, subject to the constraints upon us.

During the coming year we will work with the Archbishops’ Council to explore the options that, with the wider Church’s assent, might be available to us. Our hope is that this work will help us ensure that our future financial support is targeted as effectively as possible towards those parts of the Church where it is most needed.

Copies of full report and summary are available from the Corporate Affairs Office, Church Commissioners, 1 Millbank, London SWIP 3JZ
E-mail: commissioners dot enquiry at c-of-e dot org dot uk
© St Peter's Church, Nottingham
Last revised 2nd October 2000