[RMC News] From RMC Treasurer: Tithe Transitions Vol. 1, No. 22

[Roe, Ben]

Tithe Transitions
Mission and Money for The Rocky Mountain Conference
Vol. 1 No. 22					February 6, 2008
"...by the fifteenth of every month, each local church treasurer shall remit to the annual conference 10% (+1%) of the previous month's net contributions." 
2 Weeks Remaining to First Report!

SUMMARY OF GUIDELINES

Over the past few months, we have been providing guidance and examples of how the new tithing program will function in the Rocky Mountain Conference.  The purpose of this document is to summarize, in a concise and easy to follow reference format, the key points of the program and answers to the anticipated "real life situations" you have posited.  Hopefully, bringing this all together in one place will be helpful to all of us.  Without a doubt, situations will occur which are not fully clarified.  By working together during this transition year, we can cooperatively concur on the appropriate courses of action.

".... by the fifteenth of every month, each local church treasurer shall remit to the annual conference 10% (+1%) of the previous month's net contributions."

Please do not use prior year (2007/before) church remittance forms.  
Be certain to include your church name, number and district at the top of the form.
Be certain to note the remittance check number at the bottom of the form.

Find the monthly remittance form at <http://rmcumc.org/CR/Finance/TitheForm.xls>

The basic guideline to follow is twofold:
			*  My church should tithe all  funds received that we spend on our own life and ministry, and
			*	My church should tithe the funds we receive for our general operations of the church and programs-just as we ask our congregants to tithe from their personal incomes.

Line 10-Total Income for the previous month.
		Enter the total amount of all receipts for the previous month.  Your	
				monthly bank statement  or computer-generated total income report are the best and easiest sources for this entry.

		The following six lines on the remittance form are where you record deductions that the lay and clergy members adopted at the June 2007 Annual Conference.  This legislation provides some guidance about these categories; yet you are free to apply some moral and faithful judgments regarding what income might be excluded from your tithe.  Be certain to include these amounts on Total Income (Line 10) before deducting.

Line 11-Less Capital Campaign Income
	Include Here as a Deduction:
				Funds designated to the church by the donor(s) for a large campaign to underwrite a building construction or retire significant church-wide debt.  
				Typically, these funds would be designated as a Building or Capital Campaign fund.
	Do not include here as a deduction:
				Normal donations to general operations, repairs and building maintenance or other capital needs where the repair/project is less than 10% (as defined in the Book of Discipline) in relation to the total property value.  These amounts are included on Line 10 and should be tithed.	

	Example Situation(s):
				As part of a contemporary worship service, an electronic keyboard is needed and the price is $6,000.  Two members offer to donate funds to buy the keyboard.  Is $660 (11%) tithed?

				Since this gift is specifically designated, the intent of the donor must be honored; therefore it should not be tithed. Include on Line 10 and Deduct on Line 11.  This type of purchase typically would not have been made unless the donation had taken place. It is not a normal inflow of church funds.
				_____________

				A boiler blows up and needs to be replaced.  The church borrows $65,000 to replace the boiler.
			Value of church before boiler blowup.................$1,000,000
			Boiler Replacement cost..............................   $     65,000
			Project Value as a % of Total Value..................6.5%

				Since this example project is less than the 10% guideline, it is considered non-capital per Discipline definition and the monies borrowed should be tithed and reported on Line 10.  No deduction of these funds should be reflected on Line 11. 

Line 12-Less Endowment Donations
	Include here as a Deduction:
				The lump sum funds bequeathed or donated to the church, whose investment earnings are intended to be used over time, but whose original principal amount remains intact as an asset owned by the church (the lump sum receipt is also reported on line 10 above).
	Do not include here as a Deduction:
				Any periodic withdrawals from the endowment fund for normal annual operating costs of the church .  These amounts are included on Line 10 and should be tithed.

	Example Situation(s)
				A church member dies and leaves a large sum of money in trust with a local bank.  The trust specifies that only the income from the trust will be
				distributed. Further, the proceeds from the trust may only be used for repair and maintenance of the church building and grounds.  Paying a tithe on these funds would, in this case, violate the trust stipulation regarding how the funds are to be used (for repairs and maintenance).  Thus it should not be tithed (Report on Line 10 as part of income and report on Line 12 as a tithe deduction.
				_____________
				If another donor gave a bequest to your church indicating that the annual earnings from that gift were to be given to the general support of church operations, these earnings would then be tithed (reported on Line 10 with no deduction on Line 12).   

Line 13-Less Tuition paid for Services
	Include here as a Deduction:
				Monies received from donor(s) paying tuition for a program (e.g pre-school) that meets in, or is operated by, the church.  Tuition paid by families for the cost of a summer camp.  Report on Line 10 and deduct here on Line 13.
	Do not include here as a Deduction:
				If your church program contains regularly budgeted amounts for camping programs, they should be considered part of what is spent as a church. These tuition amounts are included on Line 10 and should be tithed.

Line 14-Less Direct Costs of Fund-Raising
	Include here as a Deduction:
				Monies donated and allocated to raise funds should not be tithed; thus deducted here on Line 14.
	Do not include here as a Deduction:
				The actual income raised.  These amounts are included on Line 10 and should be tithed.

	Example Situations:
				If you purchase food for a fund-raising dinner, and these expenses were paid from general fund operations,  the purchase amount of the food is not tithed and should be shown on Line 14.  (When the dinner yields income to the church treasury, the event income is tithed in the month you receive and deposit it-and  reflected on Line 10-and not deducted here).
				_____________

				If you pay a professional consultant to assist in a fund-raising campaign, including a regular stewardship campaign, and these expenses were paid from general fund operations, the consultant's fees and expenses can be deducted on Line 14.

				(The church tithe should be on the funds that are raised; not on the funds spent to raise them). 
				_____________

				Youth group has a pancake breakfast fundraiser to help pay for a mission trip to Guatemala.  The fundraiser earns $550.  Does the church remit $55 (10% +1%)?  If the $550 pays a pledge that the youth group made to an organization in Guatemala,, it is a pass-through donation and need not be tithed.  (Include on Line 10 but deduct on Line 15 (see below).  However, if the money was to pay for the youth group's own program costs, (i.e., paying for the kids to actually go to Guatemala) it is for the church's own life and ministry; and thus should be tithed (include on Line 10 with no deduction here. 
				_____________

				The United Methodist Women pledge $1,000 from their fund-raising efforts to assist the church in whatever way is necessary.  If the funds are used for a specific purpose which would not have been a normal expense had they not earned those funds, it may be viewed as not contributing to normal life of the church-and therefore not tithed (include on Line 10 and Deduct on Line 14).  Conversely, it can be viewed as normal cash flow of your church, just as if a summer visitor would put money in the collection plate-thus tithed and included on Line 10 only.  If the UMW had specifically designated all of the funds for carpet cleaning, for example, then you have no choice but to spend it all on the designated purpose and the money would not be tithed (include on Line 10-Deduct on Line 14).  If the money was used to pay monthly expenses, it should be tithed (include on Line 10 only).
				_____________

				The city notifies the church that the curb and gutter around the building is deteriorating and that it is the church's responsibility to repair or replace it.  The job cost comes to $25,000 and you initiate a fund-raising campaign-with no professional fund-raiser.  Does the church remit $2,750 (11%) to the Conference?  Since no outside professional fund raiser is used, there is nothing to exclude (deduct) on this line.  This can be viewed from two perspectives: 1) The money is being raised for a specific designated purpose, therefore the money is not tithed  (included as Income on Line 10 and deduct on Line 14 above) or 2) the cost of this project is less than 10% of the total property value and therefore a normal repair and maintenance item-the revenue for which should be tithed (see Line 10 above).  Your discretion should be used to determine "what is right".

Line 15-Less Funds Designated Locally/Pass thru Funds
	Include here as a Deduction:
				Funds that the donor intends to give to a local worthy cause outside your church, but chooses to do so through your church; for example a homeless shelter, soup kitchen or other local charity that the church pays directly. Include donation on both Line 10 and Line 15.

Lines 17-36-Less Funds Designated to UMC Programs
	Include here as a Deduction:
				Funds that the donor intends to give to a cause as noted on the remittance slip, outside of the local church, but chooses to do so through your church.

				The remittance form permits you to show  these gifts on the monthly remittance for the Annual Conference to forward to the proper recipient(s) on your behalf.   You may deduct here on lines 17-36 the amount of these gifts-which were reported in Total Income on Line 10 before calculating the 11% tithe.

Line 37-Adjusted Total Income for Church Tithe
				This line equals Line 10 minus all amounts on Lines 11 through 36.

Line 41-Total Designated Funds Remitted to RMC (Rocky Mountain Conference)
				This equals the sum of Lines 17 through Line 36.

Line 42-Church Tithe remitted to RMC (Rocky Mountain Conference)
				Line 37 dollar amount x 0.10  (10%).

Line 43-"Second Mile" (1%) or Additional Gift to RMC
				Line 37 dollar amount x 0.01 (1%)

Line 44-Total Remittance to RMC
				Sum total of Lines 41 plus Line 42 plus Line 43
				Send your check (include check number on form) for this amount along with the remittance form.


OTHER CASE STUDY EXAMPLES

Church receives $825 per month for renting the parsonage to a church (or non-church) member.  It covers just the expenses of the parsonage insurance, maintenance and pastor housing allowance for the year.  Is this income?

Amounts received which are less than or equal to the actual expenses are not reported.  Any amounts received over and above the noted costs of operation are income which should be tithed.
_____________

We receive $400 per month from the conference to help pay the pastor salary.  Is this income?  

No, this amount is not tithed since it is covering a specific expense.  As in the last example, amounts received up to the actual expense are not tithed; receipts in excess of the related costs should be tithed.
_____________

Receipts from "off-budget" projects such as Chili dinners, King Soopers coupons, bazaar sales etc.  need not be tithed.  

Again use judgment in determining if the donation should be tithed.  Please call the Conference Treasurers Office when questions or concerns arise.  You will be assisting all of us in further clarifying the many circumstances involved in this new process.


By Wayne Bettendorf, Conference Treasurer
A copy of this document will be found on the RMCUMC.org web site, under Church Resources -> Finance.


Ben Roe
Information Administrator
Rocky Mountain Conference, The United Methodist Church
ben at rmcumc.com  303-325-7046  800-536-3736x146 
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