Finance

Understanding Diocesan Finances

This guide provides an overview of how the Diocese of Swansea and Brecon is funded, explaining the principles behind Ministry Share and the additional support available to ministry areas across our diocese.

How Diocesan Funding Works

The diocese operates on a partnership funding model, bringing together contributions from ministry areas with support from the Representative Body of the Church in Wales and various grant programmes.

As a general principle, our annual budgets are designed to be cost-neutral, ensuring all costs are covered by income received. This comes from three main sources:

Ministry Share — contributions from ministry areas that meet the direct costs of ministry
RB Partnership Funding — support from the Representative Body that contributes to indirect costs of ministry such as bishop's officers, ministry area support, and grants
Investment Income and Other Grants — returns on investments and restricted grants that fund additional diocesan work

The Representative Body funds the expenditure using the total return on investments, with the vast majority of the RB's income coming from stock exchange and property investments.

What Ministry Share Pays For

Ministry Share directly covers:

Clergy stipends, National Insurance, and pension contributions
Housing costs for clergy
Training for ordinands and clergy in post
Clergy removal costs
Dignitary costs (archdeacons and other officers)

Understanding Ministry Share

Ministry Share is the contribution from ministry areas that funds the direct provision of ministry across the diocese. The system is built on principles of transparency and fairness, directly linking funding to the ministry provided in each area.

Principles of Apportionment

The process of apportionment is completely transparent
Apportionment is directly linked to provision of ministry within each ministry area — specifically, all stipendiary budgeted costs within that area
Costs of curates are equally distributed across the diocese so they can be placed to obtain appropriate training, and host ministry areas are not financially burdened
Apportionment figures become available in late November of the previous year, based on budgeted costs
Every effort is made to keep Ministry Area annual increases to no more than 5%
If receipts outweigh actual costs, any excess is rebated back to ministry areas proportionally

How Ministry Share is Calculated

Ministry Share is calculated on a ministry area basis, with variations directly relating to the number of stipends and properties in each area. Costs are assigned to ministry areas either on a pro-rata basis according to stipendiary headcount, or as an equal share across all areas.

Your Ministry Area Conference trustees can allocate share payments across the churches within the ministry area as they see fit.

The Clergy Pension Arrangement

Direct costs of ministry are paid by the RB and cross-charged to the diocese each quarter. The costs of the clergy pension scheme are deducted from annual RB Partnership Funding income, but the value continues to be included in Ministry Share allocation to offset this reduction in Partnership Funding.

Approval Process

Once costs are compiled into a ministry area level allocation structure, they are reviewed by the Diocesan Board of Finance Executive Committee. In October, any identified amendments are made, and costs are recommended to the Full Board for consideration at its November meeting.

Each Ministry Area has a clerical and lay elected representative at that meeting. Adjustments may be made until final approval is achieved. These figures are then distributed to ministry areas.

Additional Funding Streams

Beyond Ministry Share and Partnership Funding, several additional funding streams support growth, sustainability, and mission across the diocese.

Structural Resilience Fund

This fund was established to promote growth and support financial sustainability. It is a 10-year, non-inflationary grant from the RB, allocated to dioceses with a priority weighting based on deprivation, population, open churches, and schools. In Swansea and Brecon, we use it to subsidise operational funds available to ministry areas in support of growth and sustainability, such as our Mission Fund.

Inception Church Growth Fund

As we restructured into ministry areas, three key funding requirements were identified: ministry area administrators, succession planning, and staffing for direct mission and ministry.

The RB allocated significant funding in support of these priorities. This restricted fund can be drawn down over a 10-year period and is dedicated to:

Ministry Area Administrators — enabling employment of administrators to manage compliance and free up capacity for growth and outreach, with funding tapering from full support to being fully covered by Ministry Share over 10 years
Succession Planning — creating additional clerical posts to initially grow and strengthen ministry areas, then sustain them as retirements occur
Staffing Direct Mission and Ministry — funding key diocesan roles that directly support mission and ministry in ministry areas

Church Growth Funds

The Church Growth Fund represents a significant multi-year commitment from the RB to invest in churches and ministry areas to resource confident and consistent evangelism. There are two tiers of funding available:

Tier 1 — grant applications up to £10,000, available to ministry area projects
Tier 2 — grant applications over £10,000, available to diocesan projects

For tier 2 diocesan projects, the DBF draws down funds from the RB quarterly in advance, against actual spend commitments. The funds are restricted to the specific line items in the application and are monitored by a project manager and the finance team.

More information about Church Growth Fund grants can be found on the Church in Wales website.

Grant Funding Provided

The diocese also provides grant funding to support the life of the Church across ministry areas, schools, cathedral, and resource churches. This includes funds for mission, churches and pastoral support, assistance committee grants, social responsibility initiatives, and world mission.

Frequently Asked Questions

Why is share apportioned in this way?

A diocese-wide consultation process in 2017 reviewed the apportionment method for share. The system we have today is derived from that discussion process. The principles of allocation were reviewed again in 2021 and re-affirmed. The latest review considered the impact of restructuring to full ministry areas and established a transition plan.

Is share connected to worshipper numbers?

No. The 2017 review concluded that connecting share to worshipper numbers was a barrier to growth and encouraged stagnation or decline. It also did not encourage trustees to address unsustainable financial problems. Share allocation is now based on direct cost of ministry. Ministry Area Conference trustees can allocate share payments across the churches in their ministry area using a methodology suitable for their own area.

Can we have the costs confirmed earlier in the year?

Calculating ministry share earlier in the year would make the figures less accurate because they are based on actual and predicted headcounts. The costs are calculated and budget decisions are taken by the full board in mid-November. The costs are then distributed following budget approval.

How does the rebate work?

If the total Ministry Share collected in a year is greater than the total cost of ministry, then the surplus is returned in the form of a rebate. Rebates are made pro-rata according to the percentage paid. Rebates are allocated to arrears and/or future Ministry Share. The DBF does not budget to profit from Ministry Share or retain monies from Ministry Share.

What happens if we have a clerical vacancy?

Your archdeacon will work with your Ministry Area and MAC trustees to compile a ministry area profile as part of the recruitment plan. Interim arrangements are put in place during a vacancy to ensure suitable pastoral care.

During a vacancy there are usually additional costs, which may include: unworked notice periods or sick leave payments; removals costs; disturbance allowances; recruitment costs; security checks; utility costs; garden maintenance, etc. In addition, we often take advantage of a vacant property to do larger, more invasive property maintenance such as kitchen or bathroom refurbishments, as well as refreshing internal decoration so the property is attractive to applicants.

For this reason, we do not provide rebates of share during the interregnum. Your archdeacon will work with your team to ensure any disruption to the ministry area is minimised during the interregnum.

What happens if we can't pay?

The allocation process is designed so that each ministry area can review or re-apportion Ministry Share internally to react to unforeseen circumstances. The first action should be for the MAC trustees to review its internal allocation to see if adjustments could be made.

Continuous discussions with your archdeacon, Ministry Area Standing Committee representatives, and the diocesan secretary should highlight any area-wide financial concerns. When assessing a ministry area's income, expenditure, and reserves, it may be possible to recommend a DBF Share Assistance Grant.

If a ministry area does not meet its full share for the year, it will remain as an outstanding arrear and carried over to subsequent years until paid in full. When a clerical vacancy occurs, the level of share collection and arrears will be considered in the decision process to appoint a new cleric.

What happened to the Block Grant?

The Block Grant scheme was no longer fit for purpose. Its formulae and criteria had both become irrelevant to today's Church. A new fund has been established called the Partnership Fund.

What is the Partnership Fund?

The Partnership Fund is paid by the RB to the DBF based on three core DBF staff costs. Brecon Cathedral receives its own partnership fund from the RB to pay for its core stipendiary and salaried staff.