Stats questions and explanations

Table 1 Guidelines

Table 1 addresses church membership and program participation.  This data is critical, not just the BWC level, but at the General Church level. The data allows the General Church to discern membership statistics for the United Methodist Church overall. GCFA uses this data to report overall membership numbers and the makeup of membership in terms of ethnicity, gender, groups, types of ministry, etc.

In filling out Table 1 for the local church, it is important to accurately calculate the membership for the end of the year, and to tie total numbers of ethnic groups and total gender back to the end-of-year membership number. 

An example is if total membership equals 160, then when the ethnicity breakdown is totaled it should equal 160.  The same is true of gender – females and males should equal 160.

Table 2 Guidelines

Table 2 collects both asset and expense data related to the operation of the local church.  Some of the expense-related lines in Table 2 are used in the apportionment calculation.  The specific lines used in the calculation are explained later in this document.  It should be noted that Table 2 does not collect expense data related to the activities of the United Methodist Women, United Methodist Men, or the United Methodist Youth Fellowship.

The over-riding general principle used by the BWC is to NOT apportion expenses associated with mission programs and any capital expenditures related specifically to loan payments, purchases, or short-term facility rental agreements.  This guideline also helps apply a general principle that does NOT apportion the activities of community-based programs that have more of an outreach or mission-oriented focus for the local churches.  Examples of these programs include nursery schools, daycare, soup kitchens, after school programs, shelters, and food cupboards. Non-United Methodist group examples include Girl Scouts, Boy Scouts, and Alcoholics Anonymous (A.A.)

Specific Questions for Clarification

How should clergy and family-related health benefits be recorded?

Only clergy-related health benefits paid by the local church should be recorded on Line 52.  If the local church paid family health benefits for the pastor or the pastor’s individual portion of medical, then these amounts should be included on Line 53. 

How should base compensation and salary for pastors, associates, deacons, diaconal ministers and other church staff be recorded?

Base compensation and salary expenses should be recorded on Table 2, Lines 53, 54, 58-60.  Compensation and salary expenses should not be allocated to benevolence (Table 2, Lines 48 or 49) or program expenses (Table 2, Line 61). 

How should fundraising expenses be recorded?

Incremental fundraising expenses such as the purchase of supplies and the rental of equipment or space are not to be reported as part of Table 2, especially as it may pertain to the following lines:

Line 61 – Total amount spent for local church program expenses

Line 62 – Total amount spent for other local church operating expenses

Note:  Hiring a consultant for a stewardship campaign should not be considered a fundraising cost and should be recorded on Line 61 as a church program expense.  Building utility expenses should also not be allocated to fundraising costs, but should be recorded on Line 62.

How should in / out costs be recorded?

Payments received by participants and subsequently paid out for church related programs or benevolence activities are not to be recorded as part of Table 2.  Examples of this include fees for events like ROCK, ENCOUNTER, youth ski trips, church suppers, mission trips, fellowship day trips or concerts.

How should church-run preschool or childcare costs be recorded?

Most church-run preschool or childcare programs operate independently without direct oversight by the church council.  There may be an independent relationship if the preschool/childcare:

• Is managed by a separate board of directors
• Is operated under separate Federal Tax ID
• Has a separate budget
• Makes payments to the church for use of space and utilities

If there is an independent relationship, the congregation’s expenses associated with the preschool or childcare programs should be reported on Table 2, Line 48 (total amount given to United Methodist causes).  A church will need to calculate the portion of utility expenses (reported on Line 48) based on the space usage and the hours of operation for the activity.  The proposed method for performing this calculation is demonstrated in a later section.

If part of the church staff’s time is allocated to the preschool, funds for this position may not be deducted, but should be reported on Table 2 in the appropriate compensation line.  i.e., salaries for pastor(s), director of Christian education, associate pastor, receptionist, secretary and custodian.

How should costs for a church-run soup kitchen or cold weather shelter be recorded?

Most church-run soup kitchens and cold weather shelters support the local community and are inherently mission-oriented beyond the immediate congregation.  As a result, the expenses associated with the operation of these programs should be reported on Table 2, Line 48 (total amount given to United Methodist causes).  A church will need to calculate the portion of utility expenses that should be reported on Line 48 based on the space usage and the hours of operation for each activity.  The proposed method for performing this calculation is demonstrated in a later section.

How should building use costs by non-United Methodist groups be recorded?

The use of a local church building by non-United Methodist groups typically increases the expenses incurred by the church.  In conformance to the general principle stated earlier we do not apportion expenses associated with this type of activity. The increased costs incurred by hosting these groups should be reported on Table 2, Line 49 (Total amount given to non-United Methodist benevolent causes).  A church will need to calculate the portion of utility expenses that should be reported on Line 49 based on the space usage and the number of hours for each activity.  The proposed method for performing this calculation is demonstrated in the following section.  For general information on this topic see:  http://www.gcfa.org/PDFs/LeasingThirdPartyCProp.pdf

What formula should be used to calculate the utility expenses associated with building-use by outreach activities like preschool/childcare, soup kitchens, cold weather shelter, and non-United Methodist groups?

Churches may already have a formula for calculating these expenses, but for those looking for guidelines, the formula below is an example that could be used. 

A simple way to calculate the utility expenses for an activity is based on hours of usage and the percentage of the overall facility space that is used for the activity.

Input data:          UTL = Annual expense for utilities

                             HR = Activity Hours per week

                             WK = Activity Weeks per year

                             ASF = Square footage space used by the Activity

                             TSF = Overall Facility Total Square Footage

Formula:                Utility Expense = UTL x (HR/168) x (WK/52) x (ASF/TSF)

Activity 1:  Preschool

A church pays $40,000 annually for utilities.

The preschool occupies 2,500 SF of the church’s 10,000 SF building

The preschool operates for 30 hours/week for 36 weeks per year.

Calculation:           Utility Expense = $40,000 x (30/168) x (36/52) x (2,500/10,000)

Result:                    $1,236 per year in Utility Expense for preschool

Activity 2:  Girl Scouts:

A church pays $40,000 annually for utilities.

The scout meetings occupy 1,000 SF of the church’s 10,000 SF building

The scouts hold a 2 hour meeting each week for 48 weeks per year.

Calculation:           Utility Expense = $40,000 x (2/168) x (48/52) x (1,000/10,000)

Result:                    $ 44 per year in Utility Expense for Girl Scouts

The summation of the utility expenses for all of the outreach activities is recorded in Table 2, Line 48 for United Methodist causes (or Line 49 for non-United Methodist causes) and not included in Line 62, operating expenses.

For your convenience, expense calculators available on our website that will automatically compute activity related expenses based on the variables you provide.

Visit  www.bwcumc.org/statisticalreports and click on the “Online Calculators” link.

What lines in Table 2 are considered part of the apportionment calculation?

The following lines from Table 2 of the Local Church Report to the Annual Conference are included in the Apportionment Base:  (please note – each church on a multi-point charge is to fill out a statistical report)

Line 53 – Total amount paid in base compensation to the pastor

Line 54 – Total amount paid in base compensation to all associate pastors

Line 55 – Total amount paid to/for pastor and associate(s) for housing/parsonage (see note)

Line 56 – Total amount paid to pastor and associate(s) for reimbursements

Line 57 – Total amount paid to pastor and associate(s) for cash allowances

Line 58 – Total amount paid in salary and benefits for Deacons

Line 59 – Total amount paid in salary and benefits for Diaconal Ministers

Line 60 – Total amount paid in salary and benefits for all other church staff

Line 61 – Total amount spent for local church program expenses

Line 62 – Total amount spent for other local church operating expenses

Apportionment Calculation: 

The apportionment calculation formula is below:

Apportionment Base = Sum (line 53 + line 54) + (result of the Line 55 calculation) + sum (line 56 thru 62)

Apportionment Calculation = (Apportionment Base) x (Approved benevolence factor)

Table 3 Guidelines

Table 3 of the statistical tables is used primarily to gather data on the church’s income and how that income is designated.  This information is essential in better understanding the financial picture of the local church.   

Whether received for annual budget/spending plan, for capital campaigns or other designated special projects, or received from other institutional sources outside the local church it is important to report information as accurately as possible.

Specific questions for clarification

How should fundraising income be recorded?

Only net receipts from fundraising events are to be recorded in Table 3.  Line 67g is used to capture net proceeds in support of the annual budget/spending plan.   Line 68a is used to capture net proceeds in support of capital campaigns.

Consideration 1:  Expenses Related To Non-United Methodist Congregation Renting Space In United Methodist Buildings

When a non-United Methodist congregation rents space in a United Methodist building, most of the rent they pay covers utility usage and other related expenses.

Example: A church rents space to an Hispanic Congregation during times when the church is not using the space, as detailed below.

During the winter this usage requires programming the heating system to run at higher temperatures for additional hours in one or more wings of the church building. Window/wall air conditioning units are used for additional hours during the summer. Additional water and power for lighting, sound-systems, etc., are used year-round, and additional soap and paper towels are used in the restrooms. Extra building usage also increases the level of cleaning and routine maintenance. Thus, a large portion of the $800 per month the church receives in rent covers expenses that would otherwise not incur.

Prior to 2009, the church adjusted utility and maintenance costs to compensate for this usage when reporting operating expenses to the conference on the statistical reports. However, conference guidance for 2009 reporting seemed to disallow such adjustments.

Paying apportionments on the full amount of these operating expenses is equivalent to paying apportionments for the expenses of another congregation. Thus, the church would like CFA to provide a formula based on hours of usage that could be applied equitably by all congregations renting space to another congregation.

Guidance:  Please refer to the question: ‘What formula should be used to calculate utility expenses associated with building-use by preschool/childcare, soup kitchens, cold weather shelter, and non-United Methodist groups?’

Consideration 2:  Expenses Related To A Church Run Preschool or Childcare Program

A Methodist church operates a licensed preschool that operates as a ministry of the congregation. The preschool has a board of directors approved each year via the Committee on Lay Leadership and Charge Conference. The preschool functions under a 501(c)3 status and the church’s Federal tax ID, but maintains a separate budget and pays the congregation for their share of utility and copier costs. Prior to 2009, these preschool expenses were also excluded from the congregation’s operating expenses.

The only preschool related expense covered under the regular church budget is a children’s chapel program and the church has always reported and paid apportionments on this Christian formation/evangelism program.

The preschool’s 2009-2010’s enrollment was 35; only 4 of these students were connected to the congregation. Thus, the program is predominately an outreach program for the surrounding community.

Would CFA provide a formula based on hours of usage, square footage used, etc. that could be applied equitably by all congregations with church run preschool or childcare programs?

Guidance:  Please refer to the question: ‘How should Church Run Preschool or Childcare Costs be reported?’  You can also use the recommended formula on p4 to estimate the usage based on hours of use.

Consideration 3:  Youth Program Expenses

Some parents are able to pay the full cost for youth events such as ROCK and ENCOUNTER, and for other fellowship outings (ski trips, concerts, etc.), however that is not always the case.  In order to get all youth who want to attend ROCK each year or to any other event, the youth group must raise most of the funds.

Based upon current reporting policies (or the understanding of them), only funds paid on behalf of youth (i.e., expenses paid by the parents) can be treated as in-out costs. Funds that the youth group raises and then spends on events like ROCK must be reported as program expenses on the statistical report and will be included in our apportionment base.

This is a great inequity and will make it much harder for some congregations to send their youth to events like ROCK and to offer exciting youth events that will keep youth in the church and grounded in the faith. Thus, the church requested the CFA consider a more equitable way of dealing with youth group expenses in the apportionment formula.

Guidance:  Please refer to the question ‘How Should In-Out Cost be Recorded?’    Also, the monies received as Fundraising should be recorded in Table 3, Line 67.g (only the NET amount)

how/where do I report...

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