07.1 - Calculating Your Conference Budget Asking

by Scott Selman

And this is my prayer, that your love may overflow more and more with knowledge and full insight to help you determine what is best…
Philippians 1:9 (NRSV)

Remitting the full amount of your local church Conference budget asking is an important part of our call to be faithful disciples. Accordingly, every local church should be familiar with the formula used to calculate Conference budget askings. The formula includes two important factors that help the Conference apportion the budget to local churches in the best manner possible. These factors are based on local church membership and local church  financial strength.

Membership

Let’s review the role of membership in apportioning the Conference’s budget. If membership were the only criteria, we would simply calculate a per-member amount. Each church’s asking would then be equal to its total membership multiplied by the per-member amount. The problem with this approach is that it incorrectly assumes each church member’s financial circumstances are the same. Thus, only 25% of the Conference’s budget is apportioned based on membership.

Consider a Conference budget of $13,200,000. Twenty-five percent of this amount is $3,300,000. If the Conference’s membership total for the most recent year-end is 154,000, the membership factor for 25% of the Conference’s budget is  $21.43 ($3,300,000 divided by 154,000).

Financial Strength

If the Conference’s budget is $13,200,000, seventy-five percent of the budget is $9,900,000. This portion of the budget is apportioned based on local church financial strength. Local church financial strength is defined by certain basic expenses that all churches have in common. These expenses are compensation expenses for clergy and lay persons, program expenses, and operating expenses. In the same way that membership data is used to create a membership factor, the three expense categories are used to create a financial strength factor.  
 
Suppose total spending for compensation expenses, program expenses, and operating expenses by all local churches in North Alabama was $74,200,000 for the most recent year-end (adjusted for housing allowances in lieu of parsonages). If  $9,900,000 is divided by $74,200,000, the result is a financial strength factor of 13.34%.

Example

Sample United Methodist Church has 460 members and incurred compensation, program, and operating expenses of $210,000. The Conference budget asking for Sample United Methodist Church is $37,872. This amount consists of $9,858 based on membership (460 members times $21.43 per member) and $28,014 based on local church expenses for compensation, program, and operations ($210,000 times 13.34%).

The Conference obtains membership data and information about lay compensation expenses, program expenses, and operating expenses from the annual Local Church Report.  Information about clergy compensation expenses is obtained from the Pastor’s Compensation Profile.  (See Table of Contents to locate information about the Local Church Report and clergy compensation.)
 
 
Note:  The actual factors for the current Conference budget are included in the Conference Journal each year in one of the Council on Finance reports.