Parish Offer

Common Fund resources

In March, Bishop Richard, the Archdeacons and senior diocesan staff have written to all clergy, Churchwardens, and Parochial Church Council secretaries and treasurers regarding the 2025 Parish Offer process. They have invited all PCCs to respond with their 2025 Parish Offer by completing this online response form no later than 31 July 2024. They have also encouraged PCCs to work together with others in their benefice and deanery to discuss and discern what they can and cannot afford and submit a collective Parish Offer.

In his weekly message #196 released on 18 April 2024, Bishop Richard invites us to consider the bigger vision of 'proclaiming Christ and growing disciples' and to be generous in our giving so that Parish Offer contributions can resource ministry and the sharing of the Gospel across all our communities and local churches.

We have created a set of Frequently Asked Questions (FAQs) below to help you understand and plan your parish commitment - explaining how Parish Offer contributions enable local ministry and mission across our 400 churches. There is also helpful background on how the history of how the church is funded on the strategy page of our website here.

We acknowledge with thanks the DBF officers and senior clergy who have helped to prepare this section. We are also very grateful to the Diocese of Bristol for allowing us to use some of their FAQ material.

Overview of Parish Offer
What is Parish Offer?

Parish Offer is the way in which all Parochial Church Councils (PCCs) contribute to a Common Fund for the provision of frontline ministry and mission across the 400 church communities in Hereford Diocese.

Parish Offer enables local ministry and outreach to be provided regardless of wealth, and gives each parish the opportunity to model generous discipleship that we commend to each Christian.

Parish Offer supports our strategic diocesan priorities of growing Christians of all ages and backgrounds (spiritual and numerical growth), contributing to the common good, and reimagining ministry.

Every year, we ask each PCC to consider prayerfully how much they will commit in Parish Offer for the following year. This reflects both our responsibility and our privilege to provide for local mission and ministry. We invite PCCs to reflect on their local situation as they make a Parish Offer that is guided by faith in our generous God, yet is also realistic and sustainable.

The Diocese of Hereford introduced its generosity-based Parish Offer scheme in 2017 to replace the previous Parish Share arrangement which was considered too formulaic.

What is our financial challenge?

Since 2011, parish contributions towards local ministry and mission have declined every year in real terms, and do not cover the cost of providing such ministry. This trend accelerated sharply in 2020-21, when some of our churches saw sharp reductions in voluntary income due to the Covid-19 restrictions and, in 2022-23, sharply increased energy bills. As a result, overall Parish Offer in 2024 is expected to be £3.33m, a similar figure to the last 2 years and leaving a shortfall of over £1m.

There is a pressing need to restore and increase giving through Parish Offer, so that we can continue to invest in frontline ministry and outreach. We want to train the next generation of clergy and lay leadership, and avoid having to make reductions to existing clergy numbers.

A PCC that is unable to increase its Parish Offer over time places an additional burden on other parishes to cover shortfalls, and reduces the Diocesan Board of Finance’s ability to support ministry. If Parish Offer levels do not rise, we will need to review the number of current and future clergy we can support, and may need to reduce essential support to our parishes and church schools.

Our Diocese and Parish Offer
Why do we contribute to a Common Fund, rather than just pay for our own clergy?

One of the joys of the Church of England is that we work together rather than each church being independent and paying for their own clergy. This means that we share the financial resources God has given us so that, recognising that we are connected to each another across the Diocese, we commit to provide local mission and ministry for all on the basis of need and opportunity, rather than ability to pay.

Some areas in our Diocese are among the financially poorest in the country, while others are among the wealthiest. Collectively we are all part of one Church working together in God’s mission in our five counties, so we pool our resources – we don’t simply focus on our own needs.

It’s part of our calling as Christians who are living and working as one body, reflecting the character of God as Trinity, showing practical mutual love that is focussed on others. We have a principle of shared resources so that all may thrive.

The principles of Parish Offer are rooted in St Paul’s words in 2 Corinthians 8 and 9. Paul urges the Corinthian church to follow the example of the poorer Macedonian churches who gave beyond their ability to support other churches. The goal is to “excel in the grace of giving” and to achieve equality in resources across the Church so that we can reach all our local communities with the Good News of Jesus Christ.

There are a number of calls on each PCC’s income: insurance, building maintenance, outreach, administration, work with children and young people, and mission giving. But the largest cost relates to ordained ministry and this is met by the Diocesan Board of Finance, funded by parish contributions to our Common Fund. The Parish Offer system invites each of us to take responsibility for meeting the costs of local mission and ministry, and to be generous in supporting those with whom we are connected across our Diocese.

How should a PCC decide how much to give in Parish Offer?

We ask each PCC to think carefully and prayerfully about how to use God's gifts to us to further the work of the Church in our diocese. This will involve collaborative discussions with neighbouring PCCs to identify how we can support each other across parish boundaries and ensure that we provide sufficient resources to cover, as far as possible, the full costs of local ministry in our own deanery. Of course, giving more than this will support parishes that are unable to be as generous as they would like to be – and help fund new initiatives for church growth.

How can we set a generous, yet realistic and sustainable Parish Offer?

Here are some suggested practical steps as you approach this vital exercise.

  • Book a meeting with other treasurers and PCC members in your benefice. Prayerfully consider together how to resource your Mission Action Plan priorities in the year ahead. PCCs should be aiming to meet the full costs of parish ministry within their deanery. Your deanery leadership team should be able to provide you with this information.
  • In your own PCC, develop an outline budget for the year ahead.
  • Review levels of giving, planned and occasional. Consider whether your PCC could adopt or expand roll-out of the Parish Giving Scheme.
  • Make it easy for people to give, and make it easy for visitors to know where their money goes and why their gift is important. Consider buying a contactless device.
  • Examine outgoings: are there areas where the PCC could save money? We know that costs are rising sharply. Please do take advantage of discounts available through Parish Buying?
  • Make sure the PCC has a simple, realistic and proportionate reserves policy. The Charity Commission tells us it's not good enough just to save 'for a rainy day'.
  • Share your findings with the full PCC and decide how much your Parish Offer will be for 2025: aim to be generous, yet realistic.
  • Complete the 2025 Parish Offer response form no later than 31 July 2024.
Will our Parish Offer be published?

Yes, every Parish Offer will be visible to the public in a PCC’s annual report & accounts. Deanery leadership teams and Archdeacons also have access to this information. Many dioceses publish Parish Offer (or Share) details on their website and, in the interests of transparency and our shared responsibility to one another, we may do this in future too.

What Parish Offer covers
What does Parish Offer pay for?

Parish Offer pays for local ministry and mission. Individual PCCs do not employ clergy; instead, Parish Offer contributions enable the Diocesan Board of Finance to meets the costs of clergy training, stipends, pensions, housing, and ongoing support. In this way, we can provide appropriate ministry in every community. Whilst the majority of costs relate to paid clergy, there are also support costs for self-supporting ordained and lay ministers and House for Duty clergy.

We need to resource not just current clergy, but those who will lead the Church of the future. Through our Common Fund, we pay for those who will be the future ministers in our parishes – through their selection, training and curacy.

In addition, the Diocesan Board of Finance provides the essential services that support parish ministry, alongside Diocesan Board of Education colleagues who support school leaders and education resources across our 78 church schools. Other resources provided by the DBF include:

  • Child and vulnerable adult safeguarding expertise
  • Local ministry and Intergenerational Mission teams
  • Guidance from Church Buildings, Community Partnership & Development, and Church & Society Link officers
  • Pastoral reorganisation advice
  • Management of clergy houses and glebe land
  • Finance, Generous Giving and Stewardship support.
What is the actual of ministry to the Diocese per parish or benefice?

For 2024, the average cost per paid clergy post will continue to be close to £60,000. The following chart provides a breakdown of this figure:

 

 

 

 

 

 

 

From April 2024, our incumbents and priests-in-charge will receive a stipend of £31,160 before tax and National Insurance. Until 2020, Hereford Diocese paid the lowest stipend of all 40 English dioceses. We have since raised it slightly as the trustees (Bishop’s Council) recognised the need to offer enough to attract and retain the best clergy, and also to make sure that they are not struggling financially.  (Nearly 1 in 4 clergy nationally approached the Clergy Support Trust in 2023 for financial assistance.)

Why are clergy pension contributions so high?

The national Church operates a form of defined benefit scheme for its stipendiary clergy – the Church of England Funded Pension Scheme (CEFPS). The C of E’s Pensions Board is in regular contact with the actuary and the Pensions Regulator to determine the precise funding requirements for this Scheme. Hereford, like every participating diocese, is required to pay a contribution rate prescribed by the Pensions Board. For a number of years, this was set at 39.9% of the prior year National Minimum Stipend (NMS), which in 2021 totalled just over £10,000.

The contribution rate depends on various assumptions agreed between the Scheme’s actuary and Pensions Board trustees: future investment returns, expected stipend increases, mortality, and inflation.  We are pleased that the pension contribution rate reduced in 2023 to 28% as the Pensions Board and actuary advised there was no longer a need for deficit contributions, and the contribution rate will reduce further to 25% from April 2024.

While this reduction in contributions may sound like good news, we do want to ensure that after a lifetime of service in parish ministry, our clergy have reasonable provision for their retirement. A member of clergy who completes over 40 years of pensionable service would receive between half and two-thirds the previous year’s National Minimum Stipend at their normal retirement date: that's a modest pension of between £14,000 - £19,000 p.a.  The pension receivable would be lower for those with fewer years of service.  (By way of comparison, the average weekly wage in England & Wales across all sectors is equivalent to an annual pre-tax salary of £35,000.  Source: Office for National Statistics, March 2024)

Training new ministers seems to cost a lot. Can we afford to sustain this level of investment?

Perhaps a better question is, “Can we afford not to?” With the ‘baby boomer generation’ retiring, the national Church is expecting a shortage of clergy and is trying to increase by up to 50% the number of new ministers being trained and ordained. Even achieving this goal will not maintain current levels over the next few years. So this is perhaps the most important investment that we can be making.

In order to select the right kind of people, there is an intensive selection process at both diocesan and national levels; this needs resourcing.

Pre-ordination maintenance costs (on courses and in colleges) can range from less than £5,000 to over £20,000 per person per year, over 2-3 years. Our curates placed with a training incumbent have a slightly lower stipend, but other costs are broadly similar to priests-in-charge, vicars and rectors.

We should never forget that our many Self-Supporting Ministers and Licenced Lay Ministers give generously of their precious time. Without them, we would struggle to maintain ministry in some of our churches. However, there are still costs attached to training, equipping and supporting them in their roles. Initial training for an SSM costs around £8,000 a year, and they benefit from ongoing ministry development, and support from Archdeacons and others.

What about central diocesan costs?

The Diocesan Board of Finance employs a number of support ministers to enable ministry in our parishes and church schools. It makes sense to share their expertise at diocesan level as this ensures good coordination and value for money.

Prior to the COVID-19 pandemic, the Hereford DBF had forecasted a balanced budget. We targeted savings in the diocesan office by changing the way we do things (in particular reducing agents’ fees, closing offices, seeking external funding and reducing the amount of work we do) and through not replacing a number of diocesan staff. Over the last 5 years, we have taken hard decisions to reduce the number of full-time equivalent staff through reorganisation and voluntary redundancy, which has generated cost savings of over £700,000.

This enabled the DBF to prioritise parish ministry posts, although we have overseen a small decrease in this area too. We also choose to release a portion of our diocesan endowment fund each year to support stipends.  By doing this, we relieve some of the demands on the general fund, allowing trustees to fund strategically significant projects across our diocese which will enable local churches to grow and flourish.  There is particular emphasis on growing a younger church.

How is the Diocese of Hereford funded?
What proportion of diocesan expenditure does Parish Offer fund?

In 2024, we are budgeting £4.85m for parish clergy costs (including ministry support costs). This included clergy development and training, conferences, mission projects, and parish support officer salaries. Total 2024 Parish Offer commitments of £3.27m (1% lower than in 2023) will cover two-thirds of these local ministry and mission costs. This will leave the Diocesan Board of Financewith a headline operating deficit in excess of £1.1m for 2024.  The DBF can and does draw on its endowment fund to support stipends each year, but the trustees need to be mindful of the need to be able to sustain support from this fund over the long-term.

 

 

 

 

 

 

 

Another way of looking at total income and expenditure is shown below:

HDBF 2024 Budget Income and Expenditure

 

 

 

 

 

 

 

What other kinds of income does the Diocese get?

The Diocesan Board of Finance receives income from statutory fees, rents, investments and grants.This income significantly subsidises the frontline ministry in our parishes.

The nature of the organisation means that the Hereford DBF does own significant assets. However, the DBF deploys these assets primarily to support parish ministry, or to generate long-term returns from investments. Currently £52m is invested in properties for our parish clergy. The DBF may sell a vicarage or develop glebe when such assets are no longer required for local mission and when market conditions are favourable. The DBF re-invests proceeds from such sales to generate long-term income to support local ministry. However, sometimes the one-off benefit of ‘selling the family silver’ results in a loss in future revenue, and charity regulations specify that sale proceeds can be used only for specific purposes.

In recent years, as Parish Offer contributions have declined, the DBF has had to use some of these proceeds to maintain sufficient liquidity to pay stipends and suppliers. Hence it’s vital that PCCs contribute as generously as they can to ensure that together, we can resource local ministry appropriately.

What do we get from the national Church?

In 2023, the Hereford Diocesan Board of Finance sent £435k to the Archbishops’ Council as part of our Diocese’s share – this covered training for ministry, national church responsibilities, and retired clergy housing costs. In return, we received £319k of Lowest Income Community funding (notionally allocated to ministry and mission in the most deprived quartile of parishes nationally) and £75k of ‘Transition’ (restructuring) funding. There was also funding of £223k to support the training of additional curates, and other targeted grants of £65k.

We also benefit from national church expertise.

How is the diocesan budget managed and scrutinised?

As you would expect from a charitable organisation with a significant budget and multiple stakeholders, we monitor our financial position closely.

Every year, the trustees in Bishop’s Council ask a dedicated Budget Review Group to scrutinise the annual budget and assumptions, before it goes to Finance Committee for review, and to Bishop’s Council who recommend the budget to Diocesan Synod for approval.

Through the year, the diocesan Finance Team generate monthly management accounts and cash flow forecasts for review by senior management and Finance Committee. The annual statutory report and accounts are subject to external audit and extensive review by Audit and Finance Committee before approval by the full Board of directors and trustees. Once Diocesan Synod approves the annual report and accounts, they are submitted to Companies House and the Charity Commission, and shared publicly on the diocesan website.

Do parishes have to make a Parish Offer?

There are so many calls on our finances – how do we prioritise?

As church members, it is primarily our duty and joy to provide the financial resources for local mission and ministry. We know how much those living in our parishes value the contribution we make to the common good, and how much they appreciate our buildings as wonderful examples of heritage, and places where many significant moments of life are marked by prayer. We can invite them to partner with us in finding funds to help maintain the buildings, and some of our wider community events.

What happens if parishes do not give at, or beyond, the level that is requested, or reduce their Parish Offer giving?

Put simply, someone else has to pay! In the medium term, there will be tough decisions about where to allocate limited resources to local ministry and mission.

If PCCs do not give generously, in effect they are asking other parishes to contribute more. As PCCs, we are responsible and accountable to one other for how much we give. Where Parish Offers to the Common Fund do not meet local ministry costs, the Diocesan Board of Finance has to step in with its reserves to close the gap.

At the end of 2016, the Diocesan Board of Finance wrote off over £1.1m of Parish Share arrears. Between 2017 and 2023, the DBF has used its reserves to cover a similarly high level of annual operating losses on its General Fund. In order to ensure that the Board has sufficient resources to sustain the breadth of its charitable activities over the long term, the trustees are keen to return to a balanced budget position at the earliest opportunity, although recognise that this may take a little longer than anticipated following the coronavirus pandemic and the geopoltical and economic uncertainties of the last two years.

Few organisations can allow expenditure to exceed income over the long term. For now, we continue to prioritise funding for frontline parish ministry, maintain investments in future ordained clergy and lay ministers, and check that central diocesan support remains effective yet cost-effective. We invite every PCC to partner with us to sustain ministry and outreach in our local communities.

Parish Offer works best when we all give, in St Paul’s words, “as much as we are able and even beyond our ability” (2 Corinthians 8:3).

Our parish/benefice is in vacancy – why are we still asked to make the same level of Parish Offer?

Vacancies are hard for everyone, especially when they go on for a long time, which is why in Hereford Diocese we have a policy of filling them as soon as is practicable, of providing support and, where appropriate, putting in place interim ministry if we need to consider new arrangements for future ministry during a vacancy.

It’s important to note that the average cost of a stipendiary clergy post of approx. £60,000 in 2024 includes vacancies.  If one or more PCCs stop their Parish Offer contributions during a vacancy, everyone else would have to pay more!  So when we maintain our Parish Offer contributions during an interregnum, we show our mutual support to other parishes, and this avoids sudden changes to the amount needed from each deanery every year.

Nationally we need to train clergy and lay ministers to replace those coming to retirement, and these aspects of the Common Fund remain the same whether or not a parish is in vacancy. We continue to offer ministry experience programmes to some, and provide for those already in training for ordained and licensed lay ministry.

We are planning a large project in our parish. Can we reduce our Parish Offer for a while to meet this additional local need?

We ask PCCs to prioritise Parish Offer contributions every year – since we still pay our clergy and suppliers every month.  With some careful planning, it may be possible to raise additional income through fundraising or attract grant funding to resource a particular project. Please speak with one of our Parish Giving Advisers, or our Church Building Support Officer, for guidance on how to finance a large project.

Encouraging generosity within parishes
What support is available to help us to encourage generous giving within our parish?

Our Parish Giving Advisers are available to support you and discuss any questions you may have about stewardship, giving, and generosity.

Christians have a distinctive understanding of giving and sharing; it shapes and changes how we live and all our decisions and actions. Giving is at the heart of faith when we choose to follow Jesus Christ. Our team is available to advise you on all the many ways to enable and encourage generosity and giving within the life of your church and to support its mission and ministry.

Please refer to our Staff Directory for contact details for our Generous Giving & Stewardship team.

We encourage PCCs and church officers to refer to the eight-point Giving for Life guide and take proactive steps to nurture and grow a culture of generous giving and sharing so that the work and life of every local church family can flourish. You can find these resources on the Generous Giving area of the diocesan website


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