We have long encouraged local congregations to incorporate and offer model Articles of Incorporation for both US and Canadian churches within the Church Order Supplement to Article 32. Classes have been encouraged more recently, especially in Canada to incorporate and today almost all are.
Dr. Henry DeMoor, in his book Christian Reformed Church Order Commentary notes on page 195 that the reason for incorporation has traditionally been focused on protecting the property and assets of the organization. However, since few classes own real property, incorporation was less common. He points out that in more recent years, classes have incorporated themselves to make it possible to insure against liability arising out of lawsuits directed at classical agencies or leadership. The recent question you reference was an inquiry from my office to determine the feasibility for the possible creation of group coverage for Officer and Director insurance for all the classes that are incorporated. A classis that is not incorporated does not have a legal entity to insure.
As far as who would have the records of whether or not your classis is incorporated? I would suggest checking with the classis treasurer or the denominational archives as being the sources to begin your search.
The key issue is what do we call reserves and what are surplus funds. Much of this depends on the overall budget size of the congregation and the seasonality if any of the weekly offerings.
I would suggest that a reserve should be maintained that enables the church to meet its key obligations for at least one month if not two. The key obligations would include the staff compensation as well as items such as utility bills and any contractual obligations such as a mortgage payment. These reserves should be used to handle costs during times of variations in weekly giving.
Surplus funds would generally be related to a special gift such as a bequest, a one time large contribution, or simply greater than anticipated receipts during a year. The use of these funds should be one time in nature since it can not be assumed that the church will receive such extra income on a regular basis in the future.
The council will need to determine if the inflow of extra funds is becoming a regular occurance. If it is, then they should consider ways to expand their ministry.
I believe it is important for the council to be very conservative in its investment of reserve funds or surplus funds. The church's contacts at their local bank should be able to assist in this if needed.
The cash reserve we previously mentioned deals with the day to day expenses of a church and having enough cash on hand to manage through variances in the weekly offering cash flow.
What you are looking for is a "savings" type fund where certain amounts are set aside now for potential future expenditures. My home church maintains a Building and Grounds fund for just such expenses. A set percentage of the general fund offering (one or two percent) is allocated to this fund each month to help accumulate the needed capital to be able to address the major expenditures when they come.
At the same time, these major expenditures can be minimized by keeping up with regular preventative maintenance. Too often in an effort to balance a budget, simple, minor repair items are postponed to help save a few dollars. The result can all too often be a major expenditure far sooner than was necessary.
So while developing a "savings" fund for those big items when they do come, don't forget to include enough in your annual budget for proper preventative upkeep.
Ministry Shares are calculated using the number of professing members age 18 and older reported in the yearbook less the number of inactive professing members using the definition approved by Synod in 1998.
"Inactive members are those baptized or confessing members who are delcared by the consistory to have a relationship to the congregation which has ceased for one year or who for one year have not made faithful use of the means of grace, especially the hearing of the Word and the Lord's Supper, unless there are extenuating circumstances (e.g., military service, residence in a nursing home) that make such faithful use impossible. (Agenda for Synod 1998, pp.579-580)
I think we are talking about two different Ministry Shares here. There is the Classis Ministry Shares that are set at the classis level and administered by the classis treasurer. And there are the denominational ministry shares, which are set by synod and administered at the denominational level. It should be noted that the administration of the denominational ministry shares has changed within the last several years from what is published in the MoCRG on page 248.
The denominational ministry share per member rate is set each year by synod. In the Acts of Synod, the new per member rates are published including the regional college amounts. These are used for the coming calendar year. In other words, the 2012 ministry share rate was published in the summer of 2011. The requested ministry share contributions are then calculated based on the new membership information that is received by the denominational offices for inclusion in the Year Book for the upcoming year. It would not be reasonable to expect the membership counts from the prior Year Book submission (reported in 2010 for the 2011 Year Book) to be used for the calculation. If we consider a church that has had a significant change in its membership levels, especially a downturn in the membership counts, the church would be asked to contribute based on gifts from a population that is very different from that reported.
The Acts of Synod are silent on the details of the exact calculation, but simply indicate that the requested amount is based on the per member rate times the number of active adult professing members. It is appropriate that the most accurated membership count be used for this calculation, and that would seem to require the most recent data used for the upcoming Year Book.
If you are looking for a reference to an Act of Synod regarding which year’s membership count to use, I am afraid you will not be satisfied with the answer. Synod simply does not deal in that level of detail. Nor should you look to the Manual of Christian Reformed Church Government for definitive statements of administrative process since as the author notes, it is a helpful resource to the user and is a commentary on the actions of synod. It is not intended to be the detailed documentation of every administrative process.
However, perhaps the best reference to an Act of Synod that will help your question can be found in the Acts of Synod 2009 Article 29 I. B 1.b.(page 580) which states:
"That synod encourage local churches to use the recommended contribution amount as determined by the ministry-share system as a starting point as it evaluates its ability to participate. A church with extraordinary financial capacity may discern to contribute more than the recommended amount. Likewise, a church with undue financial circumstances or hardship may discern the need to contribute less than the recommended amount."
So whatever membership count the ministry share system uses, it really is up to the local church to determine what dollar amount of ministry shares they wish to give toward the support of the ministry we have covenanted to do together through the agencies, institutions and ministries of the denomination. Whether the membership count is the most recent or a year old should not enter into the decision of the church.
The Lilly Endowment has provided the CRCNA with a $1 million grant to not only understand the financial issues facing pastors, but to do something about it as well.
As to the issue of a defined benefit plan like our current Ministers Pension Plan that is provided in both the US and Canada or a defined contribution plan...I strongly support the defined benefit plan design for our ministers of the Word. Not only does it provide a benefit that a minister can not outlive, in the long run it is less expensive for the denomination to make sure a life time benefit is provided than using a defined contribution plan.
There is a bigger question that has not been addressed. Is the Director of Canadian Ministries an Ordained Minister of the Word. Currently, our interim DCM is not. Therefore, he is not eligible to participate in the Ministers Pension Plan, a defined benefit pension plan that comes with special life benefits as well as long-term disability coverage. In addition, his benefit program does not provide a benefit for his life and potentially the life of his spouse no matter how long either lives.
The salary data for the FAS calculation is taken from the annual compensation survey of all ministers both in Canada and the US. The survey requests salary information be split between the compensation providing for housing and other cash salary. In this way, the value of the house, either a parsonage or pastor owned, is excluded from the FAS.
The financial issues facing Calvin College have be the cause for many misstatements of fact that make the situation look like a "fiasco" compared to the actual issue.
Calvin College does have over $100 million in debt that was related to the significant construction program they undertook over the last few years. What comes due in 2017, however, is not the full $100 million plus, but simply a scheduled payment on the debt.
The Christian Reformed Church Investment Policy is fairly conservative, but has nothing to do with Calvin College's decision to follow common practice and fund construction with low-cost bonds.
Posted in: Classis as a Corporation?
We have long encouraged local congregations to incorporate and offer model Articles of Incorporation for both US and Canadian churches within the Church Order Supplement to Article 32. Classes have been encouraged more recently, especially in Canada to incorporate and today almost all are.
Dr. Henry DeMoor, in his book Christian Reformed Church Order Commentary notes on page 195 that the reason for incorporation has traditionally been focused on protecting the property and assets of the organization. However, since few classes own real property, incorporation was less common. He points out that in more recent years, classes have incorporated themselves to make it possible to insure against liability arising out of lawsuits directed at classical agencies or leadership. The recent question you reference was an inquiry from my office to determine the feasibility for the possible creation of group coverage for Officer and Director insurance for all the classes that are incorporated. A classis that is not incorporated does not have a legal entity to insure.
As far as who would have the records of whether or not your classis is incorporated? I would suggest checking with the classis treasurer or the denominational archives as being the sources to begin your search.
Posted in: Do you know of any established Reserve Fund Guidelines?
The key issue is what do we call reserves and what are surplus funds. Much of this depends on the overall budget size of the congregation and the seasonality if any of the weekly offerings.
I would suggest that a reserve should be maintained that enables the church to meet its key obligations for at least one month if not two. The key obligations would include the staff compensation as well as items such as utility bills and any contractual obligations such as a mortgage payment. These reserves should be used to handle costs during times of variations in weekly giving.
Surplus funds would generally be related to a special gift such as a bequest, a one time large contribution, or simply greater than anticipated receipts during a year. The use of these funds should be one time in nature since it can not be assumed that the church will receive such extra income on a regular basis in the future.
The council will need to determine if the inflow of extra funds is becoming a regular occurance. If it is, then they should consider ways to expand their ministry.
I believe it is important for the council to be very conservative in its investment of reserve funds or surplus funds. The church's contacts at their local bank should be able to assist in this if needed.
Posted in: Do you know of any established Reserve Fund Guidelines?
The cash reserve we previously mentioned deals with the day to day expenses of a church and having enough cash on hand to manage through variances in the weekly offering cash flow.
What you are looking for is a "savings" type fund where certain amounts are set aside now for potential future expenditures. My home church maintains a Building and Grounds fund for just such expenses. A set percentage of the general fund offering (one or two percent) is allocated to this fund each month to help accumulate the needed capital to be able to address the major expenditures when they come.
At the same time, these major expenditures can be minimized by keeping up with regular preventative maintenance. Too often in an effort to balance a budget, simple, minor repair items are postponed to help save a few dollars. The result can all too often be a major expenditure far sooner than was necessary.
So while developing a "savings" fund for those big items when they do come, don't forget to include enough in your annual budget for proper preventative upkeep.
Posted in: What figure do you use to calculate Ministry Shares?
Ministry Shares are calculated using the number of professing members age 18 and older reported in the yearbook less the number of inactive professing members using the definition approved by Synod in 1998.
"Inactive members are those baptized or confessing members who are delcared by the consistory to have a relationship to the congregation which has ceased for one year or who for one year have not made faithful use of the means of grace, especially the hearing of the Word and the Lord's Supper, unless there are extenuating circumstances (e.g., military service, residence in a nursing home) that make such faithful use impossible. (Agenda for Synod 1998, pp.579-580)
Posted in: When do we count members for Ministry Shares?
I think we are talking about two different Ministry Shares here. There is the Classis Ministry Shares that are set at the classis level and administered by the classis treasurer. And there are the denominational ministry shares, which are set by synod and administered at the denominational level. It should be noted that the administration of the denominational ministry shares has changed within the last several years from what is published in the MoCRG on page 248.
The denominational ministry share per member rate is set each year by synod. In the Acts of Synod, the new per member rates are published including the regional college amounts. These are used for the coming calendar year. In other words, the 2012 ministry share rate was published in the summer of 2011. The requested ministry share contributions are then calculated based on the new membership information that is received by the denominational offices for inclusion in the Year Book for the upcoming year. It would not be reasonable to expect the membership counts from the prior Year Book submission (reported in 2010 for the 2011 Year Book) to be used for the calculation. If we consider a church that has had a significant change in its membership levels, especially a downturn in the membership counts, the church would be asked to contribute based on gifts from a population that is very different from that reported.
The Acts of Synod are silent on the details of the exact calculation, but simply indicate that the requested amount is based on the per member rate times the number of active adult professing members. It is appropriate that the most accurated membership count be used for this calculation, and that would seem to require the most recent data used for the upcoming Year Book.
Posted in: When do we count members for Ministry Shares?
If you are looking for a reference to an Act of Synod regarding which year’s membership count to use, I am afraid you will not be satisfied with the answer. Synod simply does not deal in that level of detail. Nor should you look to the Manual of Christian Reformed Church Government for definitive statements of administrative process since as the author notes, it is a helpful resource to the user and is a commentary on the actions of synod. It is not intended to be the detailed documentation of every administrative process.
However, perhaps the best reference to an Act of Synod that will help your question can be found in the Acts of Synod 2009 Article 29 I. B 1.b.(page 580) which states:
"That synod encourage local churches to use the recommended contribution amount as determined by the ministry-share system as a starting point as it evaluates its ability to participate. A church with extraordinary financial capacity may discern to contribute more than the recommended amount. Likewise, a church with undue financial circumstances or hardship may discern the need to contribute less than the recommended amount."
So whatever membership count the ministry share system uses, it really is up to the local church to determine what dollar amount of ministry shares they wish to give toward the support of the ministry we have covenanted to do together through the agencies, institutions and ministries of the denomination. Whether the membership count is the most recent or a year old should not enter into the decision of the church.
Posted in: Let's Talk About Pastor Compensation
The Lilly Endowment has provided the CRCNA with a $1 million grant to not only understand the financial issues facing pastors, but to do something about it as well.
As to the issue of a defined benefit plan like our current Ministers Pension Plan that is provided in both the US and Canada or a defined contribution plan...I strongly support the defined benefit plan design for our ministers of the Word. Not only does it provide a benefit that a minister can not outlive, in the long run it is less expensive for the denomination to make sure a life time benefit is provided than using a defined contribution plan.
Posted in: Pensions for Pastors Serving churches and Pastors Employed by CRCNA H.O.
There is a bigger question that has not been addressed. Is the Director of Canadian Ministries an Ordained Minister of the Word. Currently, our interim DCM is not. Therefore, he is not eligible to participate in the Ministers Pension Plan, a defined benefit pension plan that comes with special life benefits as well as long-term disability coverage. In addition, his benefit program does not provide a benefit for his life and potentially the life of his spouse no matter how long either lives.
Posted in: Pensions for Pastors Serving churches and Pastors Employed by CRCNA H.O.
The salary data for the FAS calculation is taken from the annual compensation survey of all ministers both in Canada and the US. The survey requests salary information be split between the compensation providing for housing and other cash salary. In this way, the value of the house, either a parsonage or pastor owned, is excluded from the FAS.
Posted in: Financial Stewardship and Accountability
The financial issues facing Calvin College have be the cause for many misstatements of fact that make the situation look like a "fiasco" compared to the actual issue.
Calvin College does have over $100 million in debt that was related to the significant construction program they undertook over the last few years. What comes due in 2017, however, is not the full $100 million plus, but simply a scheduled payment on the debt.
The Christian Reformed Church Investment Policy is fairly conservative, but has nothing to do with Calvin College's decision to follow common practice and fund construction with low-cost bonds.