Covenant Shares: A New Assessment Method

 

Covenant shares are a method for funding ministry based on income. In a covenant shares funding system, each classis contributes to the denomination a flat percentage of the contributed income of each church within its bounds. General Synod 2019 approved a proposal to replace the current per-member assessment for funding denominational work with covenant shares.

Because moving to a covenant shares system requires a change to the RCA's bylaws, this proposal will also need to be approved by General Synod 2020 before it can take effect. If approved in 2020, covenant shares will be implemented in 2021. Note that covenant shares only represent the portion of assessments that goes to the denomination. It will be up to each classis and regional synod to determine how they fund themselves.You can find answers to frequestly asked questions about covenant shares hereYou can read more about the current assessment method here

The General Synod Council named a committee to explore alternate funding methods in response to discussions around the RCA about the limitations of per-member assessments. After careful deliberation, the committee proposed covenant shares as an alternative funding method. 

Why covenant shares?

The committee identified four values that a new funding method should reflect:

  • Biblical, reflecting the Bible’s emphasis on cheerful, generous, regular giving, and specifically on tithing as a percentage of income.
  • Equitable, allowing each church to support denominational work in accordance with its means.
  • Simple, reducing the risk of error and confusion by using a straightforward formula.
  • Congregationally supported, backed by churches throughout the RCA and easy for them to implement.

The income-based covenant shares method meets all four criteria. The new terminology also emphasizes the covenantal nature of our work together. As part of a denomination, we commit to sharing in the funding of our work together.

What would covenant shares fund?

Just like assessments, covenant shares would make possible:

  • Transformed & Transforming initiatives

  • The work of the General Synod
  • Denominational ministry support services
  • Theological education
  • The Board of Benefits Services assistance fund

What are the limitations of per-member assessments?

Membership as the basis for assessments can lead to inaccurate and inequitable contributions to the denomination. Membership rolls are not always regularly updated, and the number of members often differs from the number of people in worship, meaning that a church might be over- or under-paying relative to its actual attendance. Moreover, a church’s membership is not necessarily indicative of its ability to pay assessments.

This causes inequity in the amount that churches contribute to the denomination’s shared work. In 2017, assessments as a percentage of income ranged from 0.14 percent to 28 percent.

What counts as income?

The covenant shares model is based on contributed income, consisting of any gift received by the church, except for new endowed gifts. Contributed income includes any gift to a church that’s considered a charitable donation: contributions for general operations, missions, and benevolence funds; special designated funds; estate gifts; and capital campaign gifts. After much consideration, the committee believes contributed income is more equitable than total income.

How will the percentage be determined?

If this method is approved, the percentage would be calculated by dividing the denominational funding need by the total amount of contributed income reported on the Consistorial Report Form (CRF), lines 18b and 18e. In 2017, the percentage of contributed income necessary to provide the same total income to the denomination in assessments was 2.67 percent.

Programs like the Board of Benefits Services, the theological agencies, and any additional items approved by General Synod would be a percentage of the total covenant shares.

How will this impact my church?

At the 2.67 percent rate, 294 churches would pay more than they are currently, and 511 would pay less. The average increase per church would be $4,000, and the average decrease would be $2,300.

The new method would be implemented over a period of three to five years so that a church or classis would not be burdened significantly in one year. Additionally, in order to limit the burden to a church due to one-time gifts such as capital campaign or estate gifts, pass-through contributions, special mission trip funding, or significant growth, a church’s covenant share would not be allowed to fluctuate by more than ten percent in either direction over the previous year. 

Download this calculator tool to estimate how this alternative method would affect your church or classis.

Resources for churches and classes: