How Churches are Funded

The January speaker for Kidlington Connections was Joanna Foster CBE who spoke about the newly relaunched Friends of St Mary’s [church, Kidlington] organisation and the new opportunities for local businesses to become involved through sponsorship or business membership.

We all enjoyed the talk and there was some discussion afterwards about how churches are funded in this country. There are a lot of myths and misunderstandings around this, so I have been asked to write this piece as a bit more of an explanation.  For clarity, I am writing only about the Church of England, not Methodists, Baptists, RCs, or the free churches.

Who is the Church of England for?

Everyone who lives, works, or passes through the geographical parish boundaries. It doesn’t matter if people go to church, call themselves Christians, or care about the church at all; if someone lives in our parish we have a care for them. This is one result of being the national church, and of being organised in a geographical parish system. Every square inch of the country is in a CofE parish so every person in the country has a parish church if they wish to connect with it.

People connect in all sorts of ways – through community groups, children’s work, lunches and socials, bereavement work, schools work, cultural events, pastoral care, social justice, ecological initiatives, use of the buildings, volunteering, and of course life events. You are legally entitled to be baptised, married (with a very few exceptions), and have your funeral taken in your parish church.

The CofE also has a civic role which places our parish churches at the heart of our wider communities. We are not just here for those who come to worship week by week; we are here to be a service to our community. In Kidlington we take this very seriously and are running three community projects – for pre school families, supporting mental health, and making a community garden.

How are churches funded in other countries?

Its interesting how different countries fund their churches.

In France: the Church depends solely on donations from church members to run pastoral and spiritual care and general mission, but any church buildings (built before 1905) generally belong to the municipalities, which are responsible for their maintenance. (So that would mean Cherwell District Council would maintain St Mary’s Church)

In Germany: the state collects a church tax from everyone associated with a church and gives it to the church – this adds up to about 3% of all state income tax. You can opt out.

In Austria: the church receives a percentage of the annual taxable income of church members and also receives annual “reparation payments” from the state, compensation for property confiscated during the Nazi era and not subsequently returned to it. They represent about 8% of the church budgets.

In Italy: the state levies an indirect church tax. This is subtracted from the total proceeds of personal income tax. Since 1984, each taxpayer can decide, in their tax return, to allocate the eight per thousand fixed either to the State, or to one of the twelve religious communities which have concluded an agreement with the State. You cannot avoid this so-called “mandate” tax by leaving the Church. These taxes are 70% of the Italian Catholic Church’s income.

In Belgium, since Napoleon, the State directly or indirectly finances the tasks of the Church through various legal arrangements. The clergy are paid by the State, which also funds clergy pensions. The funding of Church institutions and projects is by negotiation with public authorities.

In Spain: taxpayers decide voluntarily, when completing their tax return, whether 0.7% of their tax contribution should be allocated either to the Catholic Church or to social or cultural objectives.

In Poland: more than 40 million euros per year are deducted from the state budget to supply an “ecclesiastical fund.” This fund was created in 1950 to compensate for the expropriation of religious communities during the communist era. It is used to pay the pension and other social insurance contributions of a large part of the clergy of all denominations, as well as the maintenance costs of the churches.

And How Do We Fund Churches in England?

In England the Church of England is the State Church and has legal responsibilities within our society. Yet no church in the UK receives any financial support from the state.Church buildings are maintained only by their congregations and people who love them. This is a HUGE burden.

Churches can claim gift aid on donations (not sales or subscriptions) which adds 25% to their value, but there are no other concessions available. After April 2026 listed church buildings will no longer be able to reclaim the VAT paid on any repairs. Grants for repairs are few and far between.

Domestic houses cost a lot to insure, heat, and maintain: How much more does a historic church building cost?

All the costs of our churches in England are paid for through voluntary donations. This includes, insurance, heating and lighting, roof and spire repairs, plumbing, maintenance and improvements, access requirements, plus the costs of clergy, all ministry and resources, all the office costs associated with running a small business, and any employed parish staff.

There are some strong myths around:

  •  that ‘the church’ is rich, with historic assets and investments to fund it.
  • that there is help available to maintain the heritage in our church buildings,
  • anyway no one cares about church any more.

None of these are true.

What is true is that:

  • church congregations all across the country struggle to maintain historic buildings that are a great asset to their communities
  • actually very many people care deeply about their local church, whether or not they are regular worshippers
  • church buildings and church volunteers add value to local communities in every part of the country, socially, pastorally, culturally, as well as spiritually
  • there is a huge need for people who care about a church existing in their community to contribute to its continued existence.

What Does This Mean For People in Kidlington?

St Mary’s is a thriving and very active church, but it cannot be maintained solely by the people who attend regularly.

If you care about St Mary’s Church, Kidlington in any way please consider joining the Friends of St Mary’s.  

Your modest membership fee will help towards maintaining and improving this magnificent church for all local people to enjoy, and you can get involved in the varied programme of events, talks, festivals, trips, and productions which FOSMK puts on.

And if you are part of a local business, we have a new Business Membership and Sponsorship Scheme for you.

I hope this goes some way to answering the questions that Joanna’s talk provoked. Please feel free to contact me if I can be of any more help in any way at all. We are here for every local person.

Felicity