PARISH ADMINISTRATION & FINANCE ENEWS
AUGUST 2018
The Return of “Fun with Parochial Reports”
By: Louis Fuertes

Last year, the original ”Fun with Parochial Reports” garnered more favorable feedback than anything we have shared with you thus far. That might be a low hurdle, but here we go again.

Thanks to efforts of priests, treasurers, wardens and parish administrators (goaded on by incessant nagging from your staff at The Commons), we have received 2017 Parochial Reports from all ECCT parishes. Hurray for us all! We have been going over this information very carefully and shared preliminary highlights with you in our last Admin & Finance eNews . In this issue, we’d like to go into further detail to provide parishes with some context of how their financials compare with those of other ECCT parishes. If you’d like to play along, now would be a good time to put your hands on your parish’s 2017 Parochial Report, and a calculator or some other device that can divide one number by another.

One measure that might be of interest as we approach the annual stewardship appeal season is “How does pledge participation for our parish compare to the results from other ECCT parishes?” One simple answer is that the number of pledge cards received (line 1 of Page 3) for an average parish is about 84% of the parish’s Average Sunday Attendance (or “ASA” in churchspeak), which can be found on line 7 of page 2 of your Parochial Report.

Why, you might ask, should we stop at a simple answer when we have the ability to make it more complicated? Well, we actually don’t have to try too hard, because there is considerable variation around this 84% average, as shown in the distribution of results shown below.
What causes all this variation? Well, the graph below shows that the community incomes served by our parishes have very little to do with pledge participation. My guess is that differences in stewardship practices and traditions might be a more powerful explanation than socio-economic differences across parishes. [The estimated 2017 median HH income for the parishes shown in the exhibit was based on information from CityData.com , where you can find more recent estimates of medial HH income level for the city or town where your parish is located.]

Some might be surprised to see the number of parishes for which the number of pledge cards received exceed 100% of the parish’s Average Sunday Attendance. This results when parishioners who attend worship services irregularly nevertheless participate in the stewardship program.  Many parishes with pledge cards/ASA over 100% are smaller parishes, but some are larger parishes serving affluent communities, as shown in the exhibit below. Which of the dots in the exhibit below corresponds to your parish?
Contributions of all sorts (pledge fulfillments, loose plate collections and regular contributions from non-pledging individuals and families as reported on line 3 of page 3 of your Parochial Report) also vary considerably. The average contribution/average Sunday attendee as reported in ECCT Parochial Reports for 2017 was just over $2,500, but the distribution from parish to parish is once again very broad.
Contributions/ASA figures increase more noticeably with the income levels of communities served by ECCT parishes than was the case for pledge participation. However, as shown in the exhibit below, there is considerable variance in per ASA contribution levels across parishes. This is particularly true for smaller parishes, where average contribution levels can be swung significantly by a few large contributors.

The relationship for larger parishes shows a more consistent increase in contributions/ASA as community income levels increase. Still, the income levels of parishioners at a specific parish might not be representative of the city or town where the parish is located. Once again, the stewardship programs at two parishes in the same town might differ greatly in their effectiveness, and the contribution traditions at parishes serving communities with comparable income levels can also develop differently over time.
Which of these dots represents your parish?

Watch for an announcement of a Faithful Futures meeting on September 6, which will focus on Stewardship experiences of ECCT parishes with good outcomes on this chart.

One last exhibit that might provide you with some context of your parish’s financial performance is shown below, which plots reported 2017  total operating expenses (Line E from page 3 of your Parochial Report) against the average Sunday attendance for ECCT parishes. 

Look closely at this data. How can the operating costs of one parish serving 60 parishioners on an average Sunday total almost $400,000, while several other parishes report doing so for just over $100,000? 
Parochial Reports don’t give us enough information to answer this question definitively, but experience suggests that building costs and staff expenses for congregations with comparable ASAs can vary significantly. In addition, we have seen that contributions at some parishes greatly exceed that of others, so some parishes can afford to support more employee and ministry expense budgets than others. One last time, which of the dots above corresponds to your parish? 

For this graph and for the others presented above, what are the implications for how you might improve your parish’s financial performance (and how you might budget) for 2019?
The Plans They Are A-Changing

Details are not finalized yet, but it is understood from conversations with the Church Medical Trust that participants in ECCT health plans will choose among several new health plans this fall. Plan options from both CIGNA and Anthem are likely to differ from those offered in 2017 for 2018.

  • The early word is that the CIGNA Open Access plan will be replaced with another CIGNA health plan
  • The Anthem 80/60 plan is also slated to be replaced by another Anthem health plan

While all participants in ECCT’s health plans will need to learn about different plan designs, it is to be expected that the provider networks (doctors, hospitals, labs and services) are likely to be essentially the same as in 2018. Participants will need to pay close attention to changes in plan terms (including copayment amounts, co-insurance %s, out-of-pocket maximums, etc.) from these anticipated changes in plans being offered by the Church Medical Trust.

Within the next several weeks, ECCT will be learning the details of the plans that will be made available during this fall’s Open Enrollment period and that information will be passed along.
HR Matters: Personnel Files Audit
by Kayla Tubolino

Personnel Files are various employee records outlining an employee’s relationship with a company. Accurately maintaining these personnel records is not just a good business practice; but is also important to comply with the State and Federal Law. These records should be retained for one year from the employees’ date of termination. All employees should have a file kept in a private and secure place.

Please note that personnel files must be separated into parts. Employee medical records and wage information should not be in the same folder as the job description and employee’s annual review. Conducting an audit on your parish’s employee records may be a good idea for an end of summer project.  Here is a link to what should be included in these files . 
How is that Parsonage Allowance of yours tracking?

Most members of the clergy who have housing allowances (known by IRS mavens as Parsonage Allowances) set these up at the beginning of a calendar year. Some clergy reassess the size of their parsonage allowance in advance of the year to come, making revisions as might be warranted, while it seems that most clergy carry parsonage allowance levels from year to year without changing them. 
One of our sharp-eyed correspondents forwarded to us a thought piece from the ChurchLawandTax.com weekly update issued on July 10 about altering the “pastoral housing allowance” in the middle of the year if it is clear that such a change is justified (see below). 
Is Your Pastor's Housing Allowance Too Low?
  • We’re past the halfway point in the year, which means this is an optimal time to check up on pastoral housing allowances, whether you receive one or you set one or more for other qualifying ministers. Specifically, a mid-year review will help determine whether the allowance is too high or too low and in need of an adjustment. Do it now, and it will help alleviate potential problems if they arise later in the year.

Why? Attorney Richard Hammar explains:
  • If an allowance designated for 2018 is clearly below actual housing expenses, then the church board should consider declaring a larger portion of the minister’s remaining compensation as a housing or parsonage allowance. A church is free to designate any portion of a minister’s compensation as a housing allowance, but remember that clergy who own their homes may never claim a housing allowance exclusion greater than the fair rental value of the home (furnished, including utilities). Therefore, the allowance ordinarily should not be significantly more than this amount.
Remember, any changes that are made only apply prospectively—never retroactively. For more help, including sample language for your board or finance committee to use to adopt a housing allowance, check out the Church Law & Tax website ( ChurchLawAndTax.com ).

Would a mid-year change make sense for your parish priest?
D&B to Introduce New Reporting Capabilities

The Trustees of Donations and Bequests are pleased to announce that U.S. Trust, Bank of America’s Private Wealth Management division, will soon introduce a new monthly statement and expanded online access capability. The new statement is currently scheduled to reach D&B customers in November, reporting balances as of October 31, 2018 along with transaction activity for October.  

The new statement will have the same level of information currently available and will add several new elements, including:

  • The allocation of parish investment holdings by asset class (% and $ amounts)
  • Investment performance information
  • The capability to download data to Excel 
  • Additional information on the fund managers selected by U.S. Trust to manage different asset classes

Additional information will be provided as the current schedule is finalized.

The Trustees of Donations and Bequests are committed to providing ECCT parishes with access to superior investment management expertise and to provide consistently excellent service quality. If you have questions or concerns, please feel free to contact Theresa Dupont at  [email protected] .
Q. Are Canonical Requirements optional? A. No

Parishes are canonically required* to submit annual audits or financial reviews of their financial records by September 1, 2018 . This means Audits or Financial Reviews of 2017 financials are due in two and half weeks!

These audit/financial reviews are useful tools for ECCT but they also provide your church leadership with suggestions for improving the accuracy of parish reporting, for improving financial operations and for reducing financial risks. ECCT's financial liability insurance coverage assumes parishes are complying with this canonical requirement.    

Parishes with total revenues (Line D on your Parochial Report) exceeding $750,000 are required to have an audit performed by a Certified Public Accountant; those with total revenues below $750,000 can submit a financial review from an Independent Public Accountant. 
Please remember that ECCT must receive your 2017 parish audit/financial review for your parish to be reported in "good standing” at our October Annual Convention.
  • Parishes seeking to sell or encumber property must have audits or financial reviews completed.
  • Parishes seeking to call a new priest must have audits or financial reviews completed.
  • Parishes seeking assistance in addressing financial challenges must have audits or financial reviews completed.
  • Parishes seeking grants must have audits or financial reviews completed.
Come to think of it,  all parishes are required to have audits or financial reviews completed. Compliance with this business practice by ECCT parishes is improving slowly, but is not close to 100%.  
How do we feel about this? See photo on the right. Hint: not totally happy.

Please contact Karolyn Nicolaides ( [email protected] ) if you would like to receive a list of Certified or Independent Public Accountants used by other ECCT parishes. You may review all Parish Financial Reporting Requirements on our website  here . Click "Parish Administration" then "Financial Reporting Documents."

* See ECCT Canon IV 2D and The Episcopal Church Canon 7, Section 1.(f)
Progress Continues in the Great Parish Appraisals Saga

The Industrial Appraisal Company continues to make progress towards its goal of completing appraisals of all ECCT parish buildings and their contents. This effort, begun in 2017, is an essential part of our effort to update our property insurance coverage. Completed appraisals will be made available to parish leaders by year-end. Please contact  Matt Handi  at 203-639-3501, x107 with any questions.
Parish Directory

We have recently compiled a parish directory that now includes parish information received as part of the parish survey initiative. You will note there are now listings for multiple forms of contact, parish partnerships, and parish ministries. If your parish has completed the survey, you will now see such data listed in the updated directory. Please click HERE to take a look! Note, this is a Beta version, we welcome your feedback and are happy to let you know how you can edit your parish information!

Please contact  Matt Handi  at 203-639-3501, x107 with any questions and changes.
Bishops' upcoming visitation schedule

September 9: Ahrens - L'Eglise de L'Epiphanie, Stamford; Douglas - St. James', Winsted
September 16: Ahrens - Grace, Broad Brook; Douglas - St. Monica's, Hartford
September 23: Ahrens - St. Mark's, Storrs; Douglas - St. John's, Bridgeport 270th Anniversary (not a visitation)
September 30: Ahrens - All Saints, Cornwall; Douglas - St. Alban's, Simsbury

October 7: Ahrens - St. Peter's/Trinity, Thomaston
October 14: Ahrens - Christ Church, Guilford; Douglas - St. David's, Gales Ferry
October 21: Ahrens - St. Philip's, Putnam; Douglas - St. Paul's, Windham
October 28: Ahrens - St. Luke's, South Glastonbury

Visitations will start again in September, which will be included in the August PA&F eNewsletter.
Parish admins invited to join a listserve

Want to chat with colleagues about ACS vs PowerChurch? Offer tips on more successful mail merges? Get suggestions on names for a new campaign?  Alison Hollo , Senior Administrator for the Office of the Episcopate, invites parish administrators to forward her their names and email addresses to be added to an ECCT listserve for parish admins. 

As a member of Bishops' Executive Secretaries Together (B+E+S+T), Alison has participated in their listserve and wants to make the same opportunity available for parish admins in ECCT. 
Helpful Links
2018 Treasurers' Newsletter can be found  here : Included: Clergy Compensation, Insurance, Lay Pension, Church Records, Supply Clergy, Tax and other IRS information, and other management operations. 
2017 Treasurers' Newsletter can be found  here . 

Manual of Business Methods in Church Affairs  linked on this page  (English and Spanish)
The next issue of the Parish Admin & Finance eNewsletter will be published mid-October.