Category: Finance
August 31, 2010ChurchSafety.com’s Top 10 Training Resources
What other church leaders are reading and using to keep their congregations safe.
ChurchSafety.com provides expert guidance and risk management information on a broad range of safety topics. We’ve compiled the Top 10 most-downloaded resources from ChurchSafety.com during the past year. Find out what other church leaders have read and used to train staff and volunteers and to develop a safe environment for ministry:
10. Confronting Gun Violence at Church
While the number of incidents involving guns at churches remains small, information and preparation are still vital. Begin by assessing the current security of your church. This download gives helpful advice on how to plan for the unexpected, whether or not your church should hire a security guard, and how to deal with the media in the aftermath of violence.
Children are often the most vulnerable members of our congregations, and their presence also presents some of the most serious liability risks. Most churches use minors to assist in various children's or youth programs. Screening these workers will help prevent youth-peer sexual harassment. Institutions can be found guilty of negligence in these cases for not providing security against such abuse. Learn practical steps to properly screen underage workers and access helpful templates for references and interviews.
8. Creating a Safety Team
When crisis arises, are you prepared? Don’t be taken by surprise next time. Learn to respond appropriately to situations ranging from common medical emergencies to crisis involving gunfire. Every church can benefit from forming a safety team that is trained to respond appropriately to various emergencies. This download will discuss the importance of having a team that can handle situations requiring security intervention, medical response, or evacuation.
Continue reading "ChurchSafety.com’s Top 10 Training Resources" »
The Your Church Blog's Top 10 Posts from Its First Year
The topics that most interested readers like you during the past year.
I love milestones. And I'm a sucker for top 10 lists (thank you very much, David Letterman). Since today is August 26, it means the TheYourChurchBlog.com turns 1. Naturally, I went back and looked at our 10 most popular posts for the first year.
But before I do, a few observations about our past year:
1. Subject popularity appears diverse: 3 of the Top 10 posts fall under the Law Category, with 2 each under Finance and Safety, and 1 each under Staff and Office (the other post was a general one and didn't fall under one specific category);
2. Our highest traffic day came on February 23, on the heels of our post "Oregon Case Provides a Powerful Reminder to Churches," which reviews the implications of an appeals court's ruling that allowed a pastor's victory in a defamation lawsuit against his former church to stand.
3. The post garnering the most comments was "Where You Work Best," which discusses the pros and cons of worshipping at the church where you also work.
Without further delay, here are TheYourChurchBlog.com's Top 10 posts during its first year:
10. Legally Host a Super Bowl Party: If your church is hosting a Super Bowl party this year, you will need to abide by three simple guidelines to avoid violating copyright law ... read more
9. The Top 7 Resources to Combat Church Embezzlement: Earlier this month, we looked at two recent cases of church embezzlement, and the "zero tolerance" stance judges are starting to take against these crimes. Unfortunately, yet another big headline has since emerged ... read more
8. 10 Questions to Ask About Your Church's Communication: As you approach 2010, consider these 10 questions to discuss your church’s communication efforts ... read more
7. What Will the New Health Care Bill Mean for Churches?: Now that President Obama has signed the health care reform bill into law, many churches are wondering what the impact will be on staffing costs. ... read more
Continue reading "The Your Church Blog's Top 10 Posts from Its First Year" »
How Churches Can Re-think Money and Giving
4 questions with Mike Bonem, author and executive pastor
1) What connection exists between organizational theory and funding as it relates to churches?
In the for-profit world, money is the measuring stick of success. Increasing the bottom line by growing revenue is the driving factor behind business decisions, and they have developed sophisticated approaches for doing so, such as new products launches, market segmentation, customer retention initiatives, brand loyalty programs, and more. Businesses are also willing to look at strategic, long-term investments for the future, spending money today on something that might not pay off for two or more years.
For the church, financial resources are not the end but a means. The mistake that some churches make is to take a very simplistic approach to money as if it’s a dirty word. For example, we talk about discipleship strategies to move someone from a not-yet-believer to a fully devoted follower of Christ. We assume that their financial giving will grow as they mature, but perhaps we should have more explicit strategies in this regard. Or perhaps we should consider using cash reserves for an “investment” that is likely to bring in new members, people whose giving will “pay back” this investment in future years.
I am not suggesting that a congregation’s decisions should be run through the same financial filter as a business. There will be many decisions with no expectation of financial return, such as a low-income medical clinic or a ministry to college students. I am, however, suggesting that we could grow the resource base that is available for ministry if we learned from the corporate world.
Continue reading "How Churches Can Re-think Money and Giving" »
Should Churches Increase 2011 Budgets?
What church leaders around the country plan to do next year.
Christianity Today, our sister publication, recently asked several financial advisers, researchers, and other observers to weigh in on whether churches should increase their operating budgets next year. Here are their responses:
"What we see is cautious optimism on the part of our church members. Donations seem to be trending upwards somewhat. Some of them are still down five to 10 percent compared to a year ago, but there is increasing optimism on the part of churches as we see some positive trends in the giving."
Dan Busby, president, Evangelical Council for Financial Accountability, and an Editorial Advisor for Your Church
"The years of prosperity concealed underlying internal issues that are the real reason giving is down at some churches. During the time the economy was good and offerings were increasing, statistics say the offerings were not increasing on a per-giver basis. … They were growing their operating budgets by growing numbers of people. When the lean resource environment sets in, scarcity begins to clarify everything. For some of these churches, it clarifies that they haven't been healthy for a while, and the abundance of money was just covering it up."
Jim Sheppard, CEO, Generis
"Our church will not. In October 2008 there was a tsunami that hit Wall Street, and almost overnight there was crisis. That did not happen to churches. Churches do not experience tsunamis, but they are experiencing rising floodwaters of financial challenges. It isn't like bam, they all got slammed; it's like people aren't giving as much. Some of our people are out of work. There's not any one cataclysmic event, but rising floodwaters of economic difficulties that are more and more affecting churches."
Brian Kluth, founder, Maximum Generosity, and a Contributing Editor to Your Church
Read responses from Crown Financial Ministries' Chuck Bentley, The Financial Seminary's Gary Moore, Barna Group's David Kinnaman, Leadership Network's Chris Willard, LifeWay Research's Scott McConnell, and Generosity Monk's Gary Hoag at the full article here, then tell us what your church anticipates for its 2011 budget.
A Look at Christian Household Finances
Midway through 2010, survey shows signs of struggle and hope
Three out of four Christian households experienced stagnant or declining income levels during the past year. However, many of those households have managed to keep debt levels under control, according to results from the second annual View from the Pew, a constituency survey of 1,029 Christian households conducted during the first half of 2010 by Maximum Generosity and Christianity Today International.
Only 23 percent of households saw their family’s income increase from the previous 12 months. Meanwhile, as the U.S. economic recession continued, 44 percent saw their income stay the same and 33 percent saw their income go down.
Challenges with income did not necessarily result in higher levels of debt, however. The primary debt obligation for 64 percent of respondents was a home mortgage, according to the survey; only 35 percent of households reported car payments, and 70 percent said they actively pay off their credit cards in full every month.
“It’s a sign that a growing number of people are learning to actively eliminate and avoid debt,” said Brian Kluth with Maximum Generosity.
The View from the Pew results are consistent with ones uncovered earlier this year through the second annual State of the Plate, another constituency survey conducted by Maximum Generosity and Christianity Today International.
Impact of Health Care Reform Issues for Nonprofits
Editor's Note: Richard Hammar reviews the 2,500-page health care reform legislation that President Obama signed into law in March 2010 in the feature article of the July/August issue of Church Law & Tax Report. Rich's health care reform analysis also is available for individual purchase in Health Care Reform: How the new laws will affect your church--Feature Report.
H.R. 4872, the Health Care and Education Reconciliation Act of 2010 (Reconciliation Act, P.L. 111-152), is a massive overhaul of the U.S. health care system affecting nearly all taxpayers, many employers, and many elements of the health care industry. The Reconciliation Act modifies legislation signed into law on March 23, 2010 that contains the bulk of the health reform law, H.R. 3590, the Patient Protection and Affordable Care Act (Health Care Act, P.L. 111-148).
The federal health care reform law and other recent tax acts will have a substantial impact on churches and ministries. Here are the main issues you may wish to consider:
1. Which organizations are subject to the employer mandate to offer "minimum essential coverage" under a health plan? Only an "applicable large employer" (employing an average of at least 50 full-time employees during the preceding calendar year) is subject to the requirement to offer coverage beginning in 2014. Most small organizations, since they have fewer than 50 employees, are thus exempt from the employer requirement.
Continue reading " Impact of Health Care Reform Issues for Nonprofits" »
Is Your Church Giving Raises This Year?
How different churches plan to approach pay increases in 2010.
An interesting post recently surfaced in the Church Admin discussion group hosted on Yahoo:
"Situation: Our church is currently very close to our income and expense budget for the current year (fiscal year end in December). Last year, the board chose NOT to give any pay increases, but this year, some of them want to do so in next year's budget.One board member feels that since some of our congregants are out of work, that we shouldn't give salary increases, even though according to our budget projections, there is no financial reason not to. He is very vocal that we shouldn't even consider raising anyone's pay.
Is anyone willing to share whether or not they are giving pay increases, and the rationale behind their decision? I'm especially interested in hearing from churches who are doing okay at meeting their budgets, and whether or not they are considering pay increases."
The administrator's question is an interesting one. If the economy is beginning to thaw—and there is still debate about whether that's actually the case—then should churches currently meeting their budgets consider pay raises for staff? Our 2010-2011 Compensation Handbook for Church Staff, which surveyed nearly 5,000 churches across the country, showed a small decline in salaries in 2009 (after a slight gain in 2008). This means many church staff members haven't received a bump up in pay in quite some time.
Here's how other church leaders responded to the question:
Continue reading "Is Your Church Giving Raises This Year?" »
Protecting Churches from Embezzlement
A special webinar this week covers important financial controls.
Back in December, we ranked the Top 7 Resources to Combat Church Embezzlement. Six months later, I’m reminded of why, and with another unfortunate headline emerging last week, it’s an opportunity for me to highlight a special online event we’re hosting this week that you can attend.
At the time of our December posting, a couple of recent headlines had caught our eye, including the “zero tolerance" stance judges are beginning to take in cases involving embezzlement at churches, and a $1 million embezzlement allegation against an individual who oversaw a Connecticut church’s investments.
In Your Church magazine’s Spring 2010 issue, many of our Editorial Advisors cautioned leaders about the ever-present threat of fraud to church finances, a problem compounded by a reluctance by some to institute stronger financial controls, or by an ongoing presumption that safeguards aren’t necessary because those in their church office are trustworthy.
Last week, we were reminded again of this threat—this time in our own backyard. The pastor of a storefront church in Aurora, Illinois, just minutes from our offices, was arrested, accused of swindling $470,000 from three men, including a member of his congregation, through a church real estate investment scheme.
What Churches Should Know about IRS Form 990-N
Why outreach ministries may be affected by a looming deadline.
(Editor's Note: Since posting this on May 14, the IRS has issued a statement urging small nonprofits to still file, even though the May 17 deadline has passed).
We recently fielded a question from a reader regarding the Internal Revenue Service's Form 990-N.
Tax-exempt organizations that average $25,000 or less in gross receipts during the previous three years are required--annually--to file a Form 990-N with the IRS through a free electronic form. When an organization misses a filing for one year, or even two, the IRS will send a reminder. But if the organization fails to make its filing for a third consecutive year, the IRS will revoke the organization's tax-exempt status.
It's a big deal this year because 2009 represents the third tax year since certain law changes went into effect. And the deadline for filing for the 2009 tax year looms near.
The reader wanted to know whether the Form 990-N affects churches. The short answer is no.
But there are situations that church leaders should note because they could trigger a need for ministries and organizations related to their churches to comply. And in those situations, a filing must be made, either by Monday, May 17 (the deadline for organizations that use a January 1 fiscal year is normally May 15, but because that date falls on a Saturday this year, it pushes back to May 17), or by November 15 (the deadline for those that use a July 1 fiscal year) at http://epostcard.form990.org.
Continue reading "What Churches Should Know about IRS Form 990-N" »
Safe and Legal Fundraising
Use safety precautions when planning your next fundraiser.
Before you launch your next fundraising effort, be sure to consider some aspects that may be putting your church and your members at risk. Use the simple tips below as a checklist for your next fundraiser.
Physical Safety
Outside Vendors. Most vendors are reputable. However, some may be inexperienced or unprofessional. Be sure to select vendors who have references. Utilize a written contract outlining their duties and get proof that they have adequate insurance.
Your Church Celebrates Four Awards
Our quarterly church management magazine receives four honors.
Many of you may not know this, but Your Church magazine, like many other publications at Christianity Today International, is a member of the Evangelical Press Association, "the world's largest professional organization for the evangelical periodical publishing industry," as its website reports.
Each year, the EPA honors the best work from the prior calendar year. On Thursday, we learned Your Church received four awards for work performed in 2009. In all, the EPA judged 734 entries representing 87 publications:
- Your Church magazine, along with two other publications, received Awards of Merit in the Christian Ministries publication category (Your Church's sister publication, Leadership journal, received an Award of Excellence, the top honor for the category);
In the EPA's "Higher Goals" categories:
- Marian Liautaud, fifth place, for her roundtable interview with church leaders, "Budget Bullseye";
- Lee Dean, fourth place, for his church communications article, "Bringing Joy to the World";
- David Harbaugh, fifth place, for his cartoon, "Church Collateral," which you can see here:
We're humbled by the recognition, and thankful, too. We pray this work honors the Lord and serves church leaders like you well.
Don't Forget the Check
Remote-deposit capture is an efficient way to handle Sunday offerings.
The buzz surrounding electronic giving options continues to grow as online donation capabilities improve and text-messaging campaigns take hold. The American Red Cross, for instance, says it raised $35 million within 48 hours of the January earthquake in Haiti, with half arriving via its website and $5 million through texts.
But a lesser-known technology called remote-deposit capture may provide significant benefits to churches as they sift through the large number of checks still given weekly. A February survey of 750 Christian households by Maximum Generosity, Church Finance Today, and Leadership shows 90 percent still primarily use checks for their weekly offering.
Remote-deposit capture first gained acceptance among retailers wanting to speed the clearing of checks. In recent years, banks like Christian Community Credit Union, Bank of the West, and Evangelical Christian Credit Union began offering it to churches.
A Case Study: When Shortfalls Cloud the Big Picture
Three experts weigh in on a church's budget crisis.
The Scenario
Mike Newson* and the rest of the leadership of Trinity Church were at a crossroads. It was January—midway through the fiscal year—and Trinity’s income projections weren’t looking any better. It seemed like cuts were inevitable. But the timing of this conundrum was especially awkward.
It was only back in October when Don Farfrae had stepped in as Trinity’s new senior pastor. The previous pastor had retired after a fruitful 18-year tenure. It was a seamless transition, with Don overlapping one month with his predecessor. The congregation was at peace—in fact, they were excited to welcome Don.
In November, Don launched a project to “refresh” Trinity’s mission. The church’s board would go through months’ worth of exercises, discussions, meetings, and retreats to evaluate the direction of the church. Mike, who was the executive pastor, was excited for the church to clarify and affirm its mission. So he, along with the rest of the board, was prepared to be patient and do this right; the process was expected to last a year and a half.
By January, however, the financial situation looked grim. The downward income trend they had seen for some time wasn’t improving. Out of the church’s $10.1-million budget, it appeared as though cuts in excess of $1 million could be necessary. This would probably include laying off as many as 20 full-time employees, as well as some part-timers.
As Mike and the rest of the board faced these numbers, they saw a new problem come to the fore. Cutting more than $1 million from the budget—no matter which staff or programs were affected—would significantly reshape the structure and focus of the church. And yet the church was only two months into their 18-month-long mission re-alignment. If the church made decisive changes now, would it short-circuit their long-term strategic discernment? No one on the board wanted that.
*Names have been changed for this case study.
Continue reading "A Case Study: When Shortfalls Cloud the Big Picture " »
Learning from Lean Staffs during Lean Times
What churches might learn from those that spend less on staffing than the national averages.
With many congregations facing tighter budgets as they weather the worst economic recession in decades, a recent survey of U.S. church leaders shows that a small percentage of churches are able to continue doing ministry while keeping staffing costs—the single-biggest expense for nearly every church—well below national averages.
The “Lean Staffing” survey was conducted in January by Christianity Today International's Your Church magazine and Leadership journal, and Leadership Network. It was taken by 735 leaders of Protestant and evangelical churches.
The results show that 1 in 7 spends less than 35 percent of its annual budget on staffing costs. Historically, churches in recent years spend, on average, about 45 percent of their total budgets on staffing costs—and sometimes more.
The “Lean Staffing” study separated 539 respondents to generate the "lean staffing" comparison: 15 percent of that group spends less than 35 percent on staff, while the rest spend between 35 percent and 65 percent. The study used 35 percent or less as a benchmark since it represents a sizable decrease from national averages and it helps with statistical comparisons, said Warren Bird, director of research at Leadership Network.
Besides identifying churches that spend less on staffing, the study also found “lean-staffed” churches typically spend more on ministry efforts outside of their walls, Bird said.
“There are churches that seem to be healthy and outreach-minded that do, indeed, have a lower percentage of their budget going to staffing costs. It can be done,” Bird said. “That was very affirming.”
You can read the full article, which details the survey’s key findings, and you can read the full, 46-page report for free (note: free registration is required).
Also, you can listen to a 12-minute podcast between Warren Bird and me (note: free registration is required to download the podcast), and read Warren's blog post about the research (and the next steps to further research the topic).
Loss of a Church's Financial Records
There are several reasons why all hope is not lost.
Follow Richard on YouTube.com: http://www.youtube.com/richardrhammar
Learn more about Protecting Electronic Data at ChurchSafety.com.
Manage your church's finances year-round with The Essential Guide to Church Finance.
What Will the New Health Care Bill Mean for Churches?
Churches count the cost of coverage.
(Editor's Note: Since this post publishes, we've since released "Health Care Reform: How the new laws will affect your church.")
Now that President Obama has signed the health care reform bill into law, many churches are wondering what the impact will be on staffing costs.
“Does the church have to pay 100 percent of the employee’s premiums?” “Will we be required to cover our entire church daycare staff, which currently does not receive medical insurance as a benefit?” “Will we have to pay large fees and/or provide heathcare for our employees? Health insurance is very expensive and being forced to pay could mean we no longer can afford our small staff.”
These are the kinds of questions and concerns that are surfacing on discussion boards and through readers’ questions to us.
I can appreciate the trepidation many churches are feeling. We are in a very dynamic period, with several state attorneys general having filed legal challenges to the new law in recent days, and Senate Republicans engaging in parliamentary maneuvering. No one can say what the results of these efforts will be.
And, note two additional considerations: First, if the Republican Party regains control of the House of Representatives in the mid-term elections later this year, it will have the authority to defund implementation of many, if not most, of the provisions in the new law. Second, even if none of these roadblocks stop this legislation, many of the provisions in the law do not take effect immediately. Some do not take effect for several years.
The bottom line is that it is premature to say what all of the ramifications of this bill will be.
I am currently reviewing the impact of each provision in this 2,500-page bill on churches, while at the same time monitoring the potential obstacles to full implementation. I will be sharing the results of my analysis in upcoming articles for Church Law & Tax Report and Church Finance Today.
In the meantime, if you have questions on this new legislation, please feel free to submit them to: CLTReditor(at)christianitytoday.com.
Did the Grinch Steal December from Churches?
Why a once-strong budget month may be on the decline.
In the latest “State of the Plate,” survey, in which we worked with Maximum Generosity’s Brian Kluth to poll 1,000 church leaders on the health of their churches’ finances in 2009, an interesting pattern emerged—December didn’t save the day for many congregations the way it typically does.
Is it a new reality? Or yet another anomaly in a year wrought with economic firsts? That remains to be seen.
One down year alone doesn’t indicate a trend. But when I interviewed attorney Frank Sommerville, a veteran of nonprofits and churches, last November for the Spring 2010 Your Church cover story, he projected an “ugly” December, and said it very well may be a sign of the times: “Don’t bank on December. (Churches) need to know the reality is that it’s not going to be as easy for them to raise money in December as it has been in the past.”
We’ll have to watch closely in 2010, and for good reason. December brings increased attendance to many churches because of the holidays. And in the past, many who showed up often did so with a year-end bonus or other financial windfall in hand. That led to a surge in giving to churches, which then typically helped them meet their annual budgets just as the year came to a close.
That didn’t happen for many in 2009, though. And if the pattern continues in 2010, it may change the way churches view giving initiatives year-round, not to mention the ways they budget for expenses—and when.
The “State of the Plate” told us the following about December and the start of 2010:
Continue reading "Did the Grinch Steal December from Churches?" »
How Finance, Sexual Wrongdoings Challenged One Church
A pastor's worst nightmare leads to a new beginning.
My lawyer said, "Just follow my lead and answer the questions he asks, and everything will be okay." I clung to his advice as I entered the smartly decorated boardroom lined with towering bookshelves. The first thing I noticed was the videographer and stenographer setting up their equipment. Then the opposing counsel, who to me represented evil incarnate, walked into the room.
"Please state your full name for the record." His tone and mannerisms suggested this was strictly routine. For the others in the room, this was just another work day. They pushed buttons on the camera, they typed on the stenograph machine, they served coffee, they represented their clients—this was a 9-5 job for everyone in the room. Everyone, that is, except me.
I cleared my throat and said, "Ralph Webster Neighbour III."
"I am sure your lawyer has explained to you the deposition process, but let me explain it again for the record …"
There was that phrase again—"for the record." I thought: This is high stakes. The church's reputation and my future are on the line here! I also knew this deposition was just the beginning; we would walk at least another year through this legal maze.
I couldn't believe this was happening to me—a seventh generation pastor. But here I was, giving a deposition in a sexual misconduct lawsuit. This was not what I signed up for!
This article first appeared in Leadership journal. The full version is available at LeadershipJournal.net. For additional resources on embezzlement and sexual misconduct issues for churches, please visit:
- Secure Your Church Finances
- The Essential Guide to Church Finances
- Sexual Harassment in Your Church
- Boundaries for Healthy Church Relationships
- Child Sexual Abuse Response Plan
- Safe Mentoring Relationships
- Reducing the Risk, a child abuse prevention training program for church leaders.
10 Tips for Last-minute Tax Filers
Here are the Internal Revenue Service's top 10 tips that will help your tax filing process “run smoother than ever this year.”
1. Start gathering your records. Round up any documents or forms you'll need when filing your taxes: receipts, canceled checks and other documents that support an item of income or a deduction you're taking on your return.
2. Be on the lookout. Gather any W-2s and 1099s that were mailed to you by your employer. You'll need these to file your tax return.
3. Try e-file. When you file electronically, the software will handle the math calculations for you. If you use direct deposit, you will get your refund in about half the time it takes when you file a paper return. E-file is now the way the majority of returns are filed. Last year, 2 out of 3 taxpayers used e-file.
Family Money Matters: A Look at Christian Household Finances
“State of the Plate” shows debt levels, giving patterns for families.
What really matters in an economy is not what the media says, but what people’s personal wallets say. As part of the second annual “State of the Plate,” 750 Christian households provided an inside look into their income, employment, debt, and giving/tithing.
I'm conducting this research with Christianity Today International’s Church Finance Today and Leadership journal. Based on preliminary results of this research, I've found that the average Christian family, though directly impacted by the economy, remains committed to faithful and generous giving to their church and ministries as a major priority.
Here's a closer look at four findings:
1) Income: The majority of families have either lost ground or remained flat financially this past year. For many years, most families saw their income increase. This is no longer the case as more and more families that completed the survey personally felt the effects of the sluggish economy:
- 33 percent of households said their incomes went down this past year.
- 43 percent of households saw no increase in their income.
- Only 23 percent of households saw their income increase.
2) Jobs: The negative effects of the economy are being felt in people’s homes and church. Almost everyone knows someone who has been negatively impacted by the economy. This financial pain has been felt in people’s immediate families, and everyone is mindful of other families in their church who are facing financial and employment struggles, too:
- 97 percent knew someone in their church who had lost a job in the past 12 months.
- 42 percent indicated they know people in their church who had to move away to find work.
- 33 percent of families had someone in their household whose job was negatively impacted by the economy.
- 30 percent know people personally who have lost their homes.
- 26 percent personally know people who declared bankruptcy.
Continue reading "Family Money Matters: A Look at Christian Household Finances" »
Church Finances Remain Pinched in Early 2010
Nearly a third say December giving fell short of expectations.
A “new normal” is emerging in the church world when it comes to giving, budgets, and generosity initiatives, according to an ongoing survey conducted by Maximum Generosity and Christianity Today International’s Church Finance Today and Leadership journal.
Nearly 800 churches have responded so far to the second annual “State of the Plate.”
Five major developments are emerging from the survey, which asks church leaders and pastors to report on how their giving efforts concluded in 2009 and began in 2010:
1) The poor economy is hurting a growing number of churches. While the headlines may say the economy is improving, its impact hasn’t shown up yet in the offering plate:
- The number of churches reporting a decline in giving this past year has increased to nearly 36 percent of churches surveyed, compared to 29 percent at the same time a year ago.
- Only 38 percent of churches saw giving increase this past year, compared to 47 percent a year ago.
2) Many churches say December year-end giving fell short. While Rick Warren’s December appeal to more than 100,000 e-mail recipients helped his church adequately close the gap on a year-end budget shortfall, many other churches weren’t so fortunate. In the “State of the Plate,” 30 percent of churches surveyed said that their December year-end giving “missed” their expectations. Only 24 percent of churches indicated that year-end giving surpassed their expectation. With nearly a third missing expectations at the end of 2009, many churches likely entered 2010 looking for ways to slow their church spending.
Continue reading "Church Finances Remain Pinched in Early 2010" »
6 Trends in 2010 for Grants
What churches should remember while seeking outreach funds.
If your congregation plans to seek grant funding for programs in 2010, keep in mind that the grants picture has changed quite a bit in the past 12 months due to the economic downturn. As I research local (Minneapolis-St. Paul) and national funders for several clients, and talk to a variety of churches and ministries about their grant-seeking efforts, I notice the following developments. They are worth noting in the weeks and months ahead:
Grantmakers generally have less money to give. Due to the downturn in the stock market, and reduced corporate profits during the past year, available funds are down. Funders are handling this in several different ways. Some are not making grants to any new organizations, which means if you don't already have a relationship with the funder, 2010 will not be a good year to try. Others are cutting the size of their grants. I occasionally encounter one organization that plans to stop making grants altogether for the coming year. So, when you call or e-mail a funder about applying for a grant, it will be important to ask, "Will you be making grants to any new organizations this year?"
It is important to frequently check funder websites. A number of funders have changed their guidelines and focus areas, sometimes without much notice. The foundation that looked like a perfect fit for your after-school program six months ago may have changed its focus to programs providing food and shelter. A few months ago, one foundation that I monitor abruptly changed its focus areas over a weekend, taking everyone (including the foundation staff) by surprise!
Struggling Cities Eye Taxes, Fees for Churches
Budget shortfalls bring tax-exempt status under fire.
Like countless other municipalities throughout the country, Fort Wayne, Indiana, is struggling to find ways to bridge the gap between declining tax revenue and the costs of maintaining infrastructure and services.
What makes Fort Wayne stand out is the city’s mayor, Tom Henry. Henry is leading the charge for the Urban Mayor’s Caucus of Indiana to tax nonprofit and church-affiliated ministries to help solve his region’s revenue shortfall.
Nearly every town in America is feeling the strain of the economic crisis. As a result, while becoming a 501©3 is a relatively simple process, maintaining a completely tax-exempt status may become increasingly difficult for churches.
Continue reading "Struggling Cities Eye Taxes, Fees for Churches" »
Discerning Eyes for Church Law, Finance, and Administration
Known, respected leaders to help guide CTI resources.
Christianity Today International's church management division, which publishes Your Church magazine, the Church Law & Tax Report and Church Finance Today newsletters, plus resources, such as the annual Church & Clergy Tax Guide and ChurchSafety.com, recently formed two important boards for its publications and resources.
CTI invited well-known and well-respected members from church legal and financial circles to an Editorial Advisory Board to bring authoritative and qualified eyes to its work.
The 14 advisors will regularly contribute to the church management division’s publications, websites, and resources, and also will regularly provide ideas, thoughts, and feedback, shaping the articles, videos, books, blog posts, and other resources that guide church leaders on important legal, financial, safety, and administrative decisions.
Noted church and business leaders who will lend their expertise include:
Continue reading "Discerning Eyes for Church Law, Finance, and Administration" »
Stetzer: Churches Lag in Economic Recovery
New LifeWay research says churches ''still waiting for recovery."
Ed Stetzer, president of LifeWay Research in Nashville, wrote a post today highlighting new research regarding continued economic pressures on U.S. churches. LifeWay gathered the research in November through phone surveys with 1,002 church pastors.
The overarching message: Churches are still waiting for a recovery.
That message is consistent with predictions Stetzer gave to Your Church back in May, when we hosted a roundtable discussion on our 2009 Church Budget Priorities research:
"Effects of unemployment tend to lag a bit for churches that emphasize tithing, but as the unemployment rate continues to increase, more congregations will get hit financially. Churches need to be ready for this impact," Stetzer said.
Fast-forward to the new LifeWay research released today and covered by USA Today and the Christian Post, among others:
Continue reading "Stetzer: Churches Lag in Economic Recovery" »
To E-Give or Not to E-Give
There's something psychologically important about writing a check and putting it in the plate.
I stopped tithing a few months ago. Okay, no scandal here. I got married in September, and my husband and I moved to a new area and wanted to find a church. As we slowly combined our finances, it became painful. (He’s a cheapskate, and I didn’t want him to see every pair of earrings I splurged on.)
Within a few months we found a church that we really liked for various reasons. As the new year approached, we resolved to streamline our finances. Eager to get in our giving before 2009 ended for tax purposes, we talked about back-tithing. We decided to tithe the four months we had been married, which felt like a lot of money. It was daunting to put the check in the offering plate and watch the money pulled from our bank account. I then vowed to talk with someone about having our tithing automatically deducted from our account so we wouldn’t think twice about it.
On one hand, you could argue, “It’s not your money to begin with, so pretend like you never had it.” On the other hand, there’s something psychological about physically writing a check and putting it in the brass plate. If we all paid our taxes once a year instead of having them automatically deducted from our paychecks each pay period, we would probably feel the pinch much more. I often wonder whether I should stop the deduction so I could invest the money during the year and then pay up later. (But that, of course, requires some self-control.)
The authors of Freakonomics, economist Steven Levitt and journalist Stephen J. Dubner, report that economist Milton Friedman came up with automatic tax withholding from employees’ paychecks. Americans weren’t paying their income taxes, as I would imagine it’s hard to remember to save up a huge chunk every year. Levitt and Dubner also write a lot about the importance of incentives: We need a really good reason to eat our vegetables (think Vitamin C) and to resist the temptation to speed (think a $100 ticket).
To continue reading, please visit the original post "Confession: I Stopped Giving to the Church," on Her.meneutics, a blog for our sister publication, Christianity Today.
New Survey on Church Staffing
Understanding how lean personnel costs are--or aren't.
How lean is your church staff? How does it compare with other church staffs? If you've ever wondered about these questions, here's your chance to find out.
The editors of Christianity Today International's Your Church magazine and Leadership Journal are collaborating with Leadership Network to learn about healthy ways churches keep staff costs down. If you'll take a few minutes to tell us about your church, you'll receive a copy of the findings, showing you what other churches have said.
Your replies will be held in the strictest confidence. The final report, and any subsequent articles and presentations, only will give group totals.
Please complete the survey by January 25, 2010. If you have questions or comments, there is contact information provided on the first survey page.
Your Church's Top 10 Articles of 2009
Looking back at the articles you read most this past year.
Last week, we wrote about the Top 10 most-read posts on TheYourChurchBlog.com during 2009. This week, we're taking a look at the Top 10 most-read articles from YourChurch.net, the website for Your Church magazine.
For a year riddled with bad economic news, there are a few surprises in these results (hint: Our No. 1 ranked story has nothing to do with the economy, or finances for that matter). What can we conclude from this? Probably not much. Except the fact that church administrators, executive pastors, pastors, and lay leaders wrestle with a variety of challenging, and often complicated, questions on a wide array of topics.
As a not-for-profit ministry, Christianity Today International is thankful it's in a position to help you answer these questions through Your Church, YourChurch.net, and TheYourChurchBlog.com, as well as Church Law & Tax Report, Church Finance Today, ChurchSafety.com, BuildingForMinistry.com, and YourChurchResources.com.
It's our desire to help you keep your church safe, legal, and financially sound. Here's looking forward to 2010!
And now, the Top 10 most-read articles on YourChurch.net during 2009:
10. Why Church Secretaries Quit
The Top 10 Church Administration Posts for '09
A look at the hottest topics facing pastors and administrators.
As 2009 draws to a close, here's a fun look back at the year's 10 most-read posts on TheYourChurchBlog.com. Doing this kind of review often helps us understand the most pressing issues facing church administrators, executive pastors, pastors, and leaders.
And, it's a nice way to showcase topics that you may have missed the first time around.
Here's the Top 10:
10. How to Interview Your Next Church
9. Report: Giving Steady at Two-Thirds of Churches
7. Free Excerpt: The Essential Guide to Church Finances
6. 5 Leadership Books Worth Reading
Continue reading "The Top 10 Church Administration Posts for '09" »
The Top 7 Resources to Combat Church Embezzlement
Best practices and guidance to protect your church's money.
Earlier this month, we looked at two recent cases of church embezzlement, and the "zero tolerance" stance judges are starting to take against these crimes.
Unfortunately, yet another big headline has since emerged—this time, the leaders of a 150-member Greek Orthodox Church in Connecticut discovered someone potentially embezzled more than $1 million. Federal authorities investigated the claims, and in an arrest made Tuesday, authorities say the suspect, who oversaw the church's investments (including managing the building fund and endowment) allegedly used the money for his businesses, according to the New Haven Register. The church's attorney, and federal documents released with the arrest, allege the 50-year-old man stole more than $2 million from three parishoners, and potentially millions more from the church, the paper reported.
As incidents such as these continue to spring up, we've compiled the Top 7 resources church leaders should use to prevent embezzlement opportunities and combat individuals who might attempt to steal:
Continue reading "The Top 7 Resources to Combat Church Embezzlement" »
IRS Announces Standard Business Mileage Rate for 2010
Rates slightly drop as transportation costs ease.
The Internal Revenue Service today issued the 2010 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:
* 50 cents per mile for business miles driven;
* 16.5 cents per mile driven for medical or moving purposes;
* 14 cents per mile driven in service of charitable organizations
Continue reading "IRS Announces Standard Business Mileage Rate for 2010" »
Zero Tolerance for Church Embezzlement
Extended sentences put churches on notice.
A sad story emerged last week out of Indiana, where a 37-year-old woman accused of stealing more than $350,000 from a church while working there as an employee received the maximum sentence allowed by the state.
According to an article in the Greencastle Banner-Graphic, the local paper, the woman was convicted on six counts of Class C felony charges and six counts of Class D felony theft, resulting in 10 years in the state jail, followed by 5 years of probation.
The woman began stealing from the church shortly after getting hired in late 2004 as the church's financial and administrative secretary, according to the article. She forged signatures on 192 checks, doctored bank receipts to cover it up, and also made unauthorized charges on church credit cards, the paper said.
This case is similar to one covered by Richard Hammar in November's Church Finance Today in which a woman employed as a church office manager for seven years stole $450,000. She received a 15-year sentence, which included an upward adjustment "for misrepresenting that she was acting on behalf of her church," according to the article.
What's the takeaway for church leaders from these cases? Aside from the need to implement strong financial controls, if such controls aren't already in place, Richard explains three reasons why church leaders should learn from cases like these:
Is It Time To Build? 10 Questions to Ask
Key questions an administrator or executive pastor should consider.
In early 2008, we made the decision at Fairhaven Church to move forward with an $8 million construction project, even as the signs of recession popped up everywhere. Reports of other churches delaying or canceling plans for expansion were easy to find. We concluded that we should move ahead carefully, yet confidently.
Why? What questions did we wrestle through that led us to conclude that moving forward was the right decision?
Below are 10 questions to help you galvanize the issues that are important in balancing the uncertainties of the economy with the need for building expansion:
Continue reading "Is It Time To Build? 10 Questions to Ask" »
Smart, Inexpensive Church Building Design Ideas
How to create superb ministry space for less.
Walk the streets of Disney World, and visitors are transported into a magical world of creativity and inspiration. Mel McGowan, a former Disney Imagineer and now president of Visioneering Studios, a national church architecture firm, brings this same expectation for creativity and inspiration to ministry facilities.
When McGowan speaks at the Cornerstone Knowledge Network conferences, WFX, and other facilities-related events, he shows slides of churches he has designed. Invariably there is murmuring in the crowd: "Those are really neat churches, but they must have cost a fortune." "We could never afford a church like that?"
At first glance, people assume the level of excellence represented in these church designs equates to top-dollar budgets. McGowan is intent on busting this myth. With the right materials and intentional design, he contends, churches can create sacred space that captures their uniqueness within the parameters of their budget. Case in point: Crossroads Christian Church in Corona, California.
Continue reading this post on BuildingForMinistry.com.
Church Budgets: How Much for Staff, Buildings, and Ministry?
An executive pastor suggests a different analysis of expenses.
Paul Clark, one of Your Church's contributing editors, wrote an interesting post this week on his blog. Paul is an executive pastor who at one time spent several years in a managerial role with General Electric. His business background gives him an interesting perspective on how churches operate.
This week, Paul challenges three common questions often asked among church administrators: What percentage of a church's budget should go toward personnel expenses? Facilities? Ministries?
He writes:
"Those are great questions, but they are a bit narrow in their scope. The reality is that a church budget is a reflection of the overall strategy and focus of the church in a given calendar year. That focus can change from year to year and consequently, the budget percentages will change accordingly."
Paul then illustrates what he means, making the case for projecting expenses further into the future to truly understand overall budget ramifications.
Earlier this year, Your Church did a comprehensive survey with church leaders regarding church budget priorities.
The average breakdown in expenses for church operating budgets, based on responses from 1,168 church leaders:
- 38% toward salaries and wages
- 12% toward buildings/facilities
- 8% toward utilities
- 7% toward ministries and support
Our survey participants mostly hail from small- to mid-sized churches; organizations like NACBA and Leadership Network, both of which typically survey larger churches, report salaries and wages, on average, take up 45% to 50% of church operating budgets.
Like Paul asks, how does your church assess these expenses, and how those expenses reflect--or don't reflect--the church's direction now and in the future? Is an analysis like Paul proposes more instructive for current and future church budget planning?
Top 5 Reasons Churches Wind Up in Court
Current legal trends that can help your church assess its vulnerabilities.
For many years, I've closely reviewed litigation involving churches to identify patterns that pastors and leaders can use to assess their own risks and potential vulnerabilities. In 2008, the following five types of cases brought churches to court more than any others:
1. Sexual Abuse of a Minor (15 percent of cases). Sadly, this type of case is typically the No. 1 or No. 2 reason churches wind up in court every year.
2. Property Disputes (13 percent of cases).
3. Zoning (10 percent of cases).
4. Personal Injury (9 percent of cases). This is a Top 4 issue every year.
5. Tax (7 percent of cases).
Based on this ongoing analysis, churches should note the following major risk categories they face and work to evaluate (and to minimize) their own risks:
Continue reading "Top 5 Reasons Churches Wind Up in Court" »
Report: Finances Steady at Two-Thirds of Churches
New research: Giving flat or growing for many congregations.
New research released this week by Indiana University's Lake Institute on Faith & Giving and The Alban Institute suggests giving remained steady--or grew--during the first half of 2009 for two-thirds of the 1,540 churches they surveyed.
More than three-fourths of those surveyed hail from Protestant denominations, the two organizations said.
Nearly 37 percent of congregations said their collections grew during the first half of 2009 compared to the same period of 2008, while another 34 percent said their collections remained flat year-over-year, the research showed.
The remaining respondents said giving declined in the first six months of 2009 compared to the same period a year ago--up 8 percent compared to survey results from a year ago, the two organizations said.
Other highlights of the research:
Continue reading "Report: Finances Steady at Two-Thirds of Churches" »
Facing a Financial Crisis: Three Experts Weigh In
Is your church struggling with a mortgage? Some tips on how to act—now.
A headline I read earlier this week from the newswire service United Press International gave me pause: “More Churches Face Foreclosure.” Upon reading the piece, I quickly understood why: While the rate of foreclosed church properties continues to climb, thanks partly to some widely publicized defaults in Naples, Florida, and Temple Hills, Maryland, among others, the overall number remains small.
As the article points out:
“The scope of the problem is difficult to measure. Most of America’s 335,000 churches are well established, building costs paid off long ago. The situation among a minority of congregations, however, is certainly worse than it was last March, when the New York Times found that 0.31 percent of the 82,441 churches it studied were facing foreclosure.”
Not many can say 2009 delivered a banner year, but these types of headlines suggest a widespread financial problem among churches, which just isn’t the case. (As Dan Mikes from Bank of the West pointed out to me, his division has $1.3 billion in direct church loan exposure “without a single delinquency, loss, or foreclosure.”)
Nevertheless, these headlines remind me that some churches are struggling with how to make a mortgage payment. To help, we asked three lenders to tell us what churches facing a financial crisis should do if they aren’t able to make mortgage payments. Here are their responses.
Continue reading "Facing a Financial Crisis: Three Experts Weigh In" »
Free Excerpt: The Essential Guide to Church Finances
Most churches don't use a program budgeting method--and they're missing out
Earlier this year, we released The Essential Guide to Church Finances by Richard Vargo, a professor of accounting in the Eberhardt School of Business at the University of the Pacific, and Vonna Laue, a partner at nonprofit accounting firm Capin Crouse.
Below is a free excerpt, which discusses the advantages of program budgeting and why churches that use incremental budgeting strategies put themselves at a disadvantage (and, if you like what you see from this excerpt, you can order your copy of Essential Guide to Church Finances here).
Continue reading "Free Excerpt: The Essential Guide to Church Finances" »
Building a Culture of Generosity in Your Church
An interview with Brian Kluth on teaching members to give to God.
Some estimate giving to churches is on a 40-year decline. In contemplating the reasons why, here's a thought that should give church leaders pause: A church budget usually is set to the level of its people's unfaithfulness.
That's one of the messages Brian Kluth is taking to churches around the country.
Brian spent 10 years as the senior pastor of the First Evangelical Free Church of Colorado Springs. Nine out of those 10 years, the church ran a surplus budget. In the four years prior to Brian's arrival, the church never met budget.
Earlier this year, the church commissioned Brian to become a "generosity minister at large." In addition to developing his resources and writing a book, Brian now is touring with the Evangelical Council for Financial Accountability and its 14-city "recession-proofing churches and ministries" workshops.
Brian recently visited Christianity Today International and sat down with me to share more about the tour, and about developing a culture of generosity in your church. In our short interview, Brian makes several interesting observations, which you can hear by clicking the link below (the audio player you need appears with the rest of this post).
Continue reading "Building a Culture of Generosity in Your Church" »
Study: Donations Grow 42% With Face-to-Face Time
Research underscores the power of relationships for church leaders.
In fact, it matters so much, the study reveals “donors to religious organizations gave an average of $2,904, or 42 percent more, when they were asked in person by someone they know,” according to an article published Wednesday by Philanthropy Journal.
That stat provides a tangible reminder of the power of relationships. Of course, when it comes to ministry, face-to-face time should matter more than just to land a big-dollar donation. We were created for relationship with the Lord, and for relationships with each other. Relationships matter a great deal to Him. We should strive to maintain healthy, edifying ones with all congregants, regardless of their financial situations, because the fruits of such efforts are eternal.
Keeping that in mind, there are people in your congregation who feel the Lord has blessed them in terms of finances and resources. For a church leader, the key is to learn more about these people by listening to them, and to hear about how their passions might align with the church's vision.
Continue reading "Study: Donations Grow 42% With Face-to-Face Time" »
Raising the Bar in Tough Times
How church administrators can prove—and increase—the worth of their roles.
In this uncertain economy, with so many churches scrambling to reduce expenses, the role of the church administrator inevitably will come under the bright light of scrutiny. Because of this uncertainty, church administrators need to spend time reflecting on ways to showcase—and increase—our value to the churches we serve.
Nearly half of the 1,168 churches surveyed by Your Church magazine earlier this year indicated giving at their churches was on the decline (click here for the full report). Personnel costs usually consume between 45 percent and 60 percent of a church’s budget, so that makes it fertile ground for reducing expenses. And as a senior pastor or key decision-maker looks across the staff, the cost of the church administrator might appear more tempting a fruit to pluck off the vine than other staff positions because the perception is that the administrator does not have the direct impact on ministry that other church positions offer.
The administrator usually doesn’t preach, doesn’t counsel, doesn’t meet with new families, doesn’t lead programs, or possess nearly as public of a face as other staff members. It could be suggested, albeit incorrectly in my opinion, that a church could release a church administrator and not see a direct impact to the ongoing ministries of the church. That kind of reasoning is wholly short-sighted, but perhaps understandable in tough economic times like these.
That’s why we must demonstrate our value and find ways to further expand that value, not just to lessen the likelihood we’ll lose our jobs, but also for the far more noble desire to increase our impact in Christ’s Kingdom. We want to become more valuable because we can and, because in so doing, we’ll gain the fulfillment that comes from knowing we have made a difference in our world through the Gospel.
The role of church administrator is one of efficiency and productivity. It allows the church organization to function smoothly and effectively. It involves processes and systems that indirectly, yet significantly, impact the people we serve in our churches. The church administrator often works behind the scenes to ensure resources are wisely and efficiently used. The church administrator also creates and implements policies and systems that promote harmony, decrease ambiguity and confusion, and allow for greater productivity and impact toward the church’s mission.
Here’s how to showcase these very important qualities and raise the bar even higher:
Pinched Paychecks
Survey: Pastors, church staff nationwide see slight pay declines.
About half the nation’s full-time pastors report they received no salary increase in the past year, continuing a downturn in salaries among top leaders in churches, according to a new survey published by Christianity Today International. In fact, the extensive survey, publishing this fall in the 2010-2011 Compensation Handbook for Church Staff, shows a slight decline or stall in pay levels for the majority of every church employee surveyed this year.
The Compensation Handbook was developed to provide church leaders and employees with a current and reliable picture of compensation practices across a broad spectrum of American churches. It presents survey data from nearly 5,000 churches representing more than 10,000 staff members in 13 ministry positions, both full-time and part-time, ranging from pastors to childcare positions. The survey was conducted in February and March from subscribers of various Christianity Today International magazines, e-newsletters, and web channels, including Church Law & Tax Report, Church Finance Today, and Leadership, a journal for pastors and church leaders.
Among the findings:
• After a slight bump up in salaries in 2008, the new survey finds a small decline reported in 2009.
Reading the Fine Print
Tips and tactics to remember when it comes to contracts.
The deal sounded good.
About 50 churches in the Washington, D.C., area leased interactive electronic kiosks for their entrance areas so that members and visitors could check on activities and news and register for classes and meetings. The selling point? Church leaders say the kiosks were presented to them as “cost-free,” with the chance for their churches to potentially earn revenue from advertisers interested in reaching church audiences.
But in April, a lawsuit filed against three commercial leasing firms, an online services firm, and an interfaith digital network services firm by the District of Columbia churches suggested the deal wasn’t a good one. The churches say they received lengthy—and costly—leases and faulty equipment, as well as fees and termination expenses. All told, the lawsuit estimates hundreds of thousands of dollars in combined losses for the churches.
Officials from at least two of the firms deny the allegations. News reports indicate that the companies must prove the charges and expenses were disclosed—in the “fine print”—even as the equipment was advertised as cost-free.
The situation underscores why it’s important for church leaders to review any contract before signing it. Legal experts concede that contracts and agreements can be tough to navigate, but necessary to do nonetheless.
“One insurance coverage contract I reviewed was over a thousand pages long,” says Frank Sommerville, a Christian attorney based in Houston. “There was a lot of complex language surrounding liability coverage and exclusions, and that could create a lot of potential issues for the church.”
Church leaders don’t want to find themselves on the wrong end of a deal. Details really do matter. For that reason, it may be especially important to secure an attorney’s help with reviewing larger contracts. In addition, these seven items are important to remember when it comes to reviewing purchasing and leasing deals:
Making Comparisons for Church Purchases
Eight tips your church can use when making purchases.
As a consumer in the marketplace, a local church faces the inevitability of making purchasing choices. Ford or Chevy? Plain or peanut? A lot or a little?
Wise choices are made from informed methods of comparison shopping. Executive pastors and church administrators identified these key principles to help your church make the right decision every time.
Continue reading "Making Comparisons for Church Purchases" »
