Tithe Information

Local Church Tithes and Offerings to replace Apportionment for 2006

The Annual Conference adopted the following action recommended by the Council on Finance and Administration:

The method of funding our Shared Ministry shall be a Tithes and Offerings method. Each local church treasurer shall calculate all income received by the local church from all sources and by whatever receipt methods used each month. From this total shall be removed any income received from tuition-based ministries (day care and preschool), from stated Capital Fund Campaigns, from pass-thru donations for outside events and causes, and from Endowment donations. The church treasurer will then calculate onetenth of this amount and forward the one-tenth amount (the tithe) to the Director of Finance and Administration by the last day of each month, for that month. The local church’s portion of our Shared Ministry shall be considered fully funded if the amount received by the Director of Finance and Administration corresponds appropriately to the amounts reported on Table 3 and on the Conference Local Church Audit Form.

How will your local church calculate its Tithe for 2006?

Initially, the calculation is based upon ALL income received by the local church:

Offerings, donations, fees, rents, bequests, memorials, pledges, and tithes, whether by cash, credit card, check, stock, transfer of assets are included.

Once the total is calculated, the following items are removed from the total before the Tithe is calculated:

• Tuition-based ministries. Normally this would be children or adult day-care ministries where a fee is paid to participate. This income is not included in the Tithe calculation.

• Stated Capital Fund Campaigns. Such campaigns are defined as significant, short-term fund raising efforts for a stated project, such as a building, debt retirement, or special project. Such campaigns usually have a campaign committee and may employ a professional fundraiser. The campaign normally lasts for a short time, usually less than a year, however, the donations to the campaign may span several years. Stated Capital Fund Campaigns should not be confused with trustee account donations, building maintenance donations or other donations for capital needs.

• Pass Thru Funds for Outside Projects or Events. From time to time churches will act as a collection agent for special events, such as Promise Keepers, Youth retreats or Mission trips. The church will collect the funds for the participants and then forward the funds to vendors to pay for these events. Such funds are not included in the Tithe calculation and should be removed from the base income before the 10% is calculated. Also, from time to time a church will receive donations from individuals that are restricted for another charitable ministry or cause outside of the church, such as, Africa University, Youth for Christ, or Epworth Forest. Such donations are not under the control of the local church as to use and are not included in the basis for the Tithe. A Benevolence or Mission Fund of a local church does not qualify for such treatment as they are under the control of the church.

• Endowment Donations. Donations by persons that are intended to become a part of an Endowment are not counted in the base income for the Tithe. Such donations may sometimes be in the form of a bequest or memorial or may be a gift from an individual or an estate. However, not all bequests, memorials or estate gifts are considered Endowments. An Endowment is a gift, which can never to be spent. It is designed to produce earnings. The gift will have instructions on the use of the earnings and whether any part of the earnings are to be added to the principal or distributed. The original principal gift is not to be part of the Tithe calculation, however, the distributed earnings, when used, should be counted in the Tithe calculation.

  It should be noted here that even though an amount of income is used to calculate the Tithe, it is not necessarily the same income that will be used to pay the tithe.

  Example

  A donor gives the church $10,000 for an Endowment for Youth Ministry in the church. The principal of $10,000 is to be invested and create earnings. One half of the earnings are to be used for Youth Ministry and one half of the earnings are to be used to increase the principal each year. The church does not count the original gift of $10,000 in calculating the Tithe. At the end of the first year, the Endowment has produced earnings of $500. By direction, $250 of the earnings is used to increase the principal, so that the principal is now $10,250. The other $250 of earnings is forwarded to the Youth ministry program of the church and used for activities in the ensuing year. In the year that these funds are so distributed, the $250 of income is added to the basis for the Tithe. A tithe of $25 is calculated from this addition. The treasurer must be careful here NOT to use any of the $250 to pay the tithe to the Conference. The tithe should be paid from other General Funds. Restrictions upon the use of the $250 from the Endowment would not allow these funds to be used for anything other than Youth Ministry, therefore, General or Unrestricted funds should be used for this portion of the tithe payment.

How does my local church budget for the Tithe for 2006?

Your local church can do a review and projection of your 2005 income and apply the Tithe calculation to that income. This calculation would become the starting point for estimating the 2006 Tithe for budget purposes.

Available for download is a monthly worksheet in PDF format or Excel format for calculating the 2006 Tithe. This worksheet may be photocopied for use in 2006.

What is the Church Offering and how does it fund General Church Ministries?

In addition to the church Tithe, a portion of General Church ministries will be funded by local church offerings. The Annual Conference made the following decision:

In addition, any amounts apportioned to the Annual Conference for Denominational Ministries, not included by the Conference in the Tithe, shall be assigned to the churches, for their offerings, pro-rata, based upon the estimated income for said church. The estimate of income is to be an average of the previous two years Table 3 reports (less feebased income and Capital Fund Campaign receipts)*. The Council on Finance will work to have all of the Denomination Ministry support included in the Tithe by the year 2010.

It is the intent of the Council on Finance and Administration to fund all Conference operations and the North Indiana share of General Church Ministries through the Tithe. Eventually, we will be able to do this, as giving grows.

Initially, however, CFA does not think it would be possible. Therefore, they asked the Annual Conference to allow CFA to work towards this goal over the next few years.

This means that a portion of our General Church Apportionment will need to be funded outside of the local church Tithe.

One half ($1.5 Million) of the General Church Apportionment will be paid if the Tithe is received in full. The remaining $1.5 Million will be allocated to each church based upon each church’s estimated Tithe, as calculated using the methodology above. Each local church is asked to send an additional monthly offering to cover this assigned amount.

The assigned amount for your church for the additional General Church Apportionment will be sent to your church the week of October 9, 2005, after the official adoption of the Conference Budget by the Annual Conference.

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*Most churches will see a decrease in their “apportionment” under the Tithe methodology. Our estimates distributed at Annual Conference showed that all but 45 churches saw a decrease. For those 45 churches that did not see a decrease from their 2005 amounts, we used their 2005 Apportionment amount as their “basis” for calculating their share of the additional General Church Apportionment. The Council continues to review the impact of this new methodology on our churches and their ministries.