Wednesday, June 9, 2010

Business Books

Why don't ministers read more business books? There are some classics out there by gurus such as Tom Peters, Peter Drucker, and Jim Collins. There are lesser known authors or newer authors such as the Heath brothers (right now I'm reading their book, Made to Stick - great stuff). Popular business books from the past few years are very readable and enjoyable.

If I could, I'd challenge every minister to read one business book for every two books he or she reads on theology or church life. Think outside the box! After all, a minister is the CEO of a corporation. An aside, a minister once told me that the church is the only organization in the world where the customers (who pay the bills) are also the stockholders (who control the company) which leaves the staff in the middle.

So, please read some business books. Here is a sample:
  • Me, Myself, and Bob by Phil Vischer (story of the rise and fall of Veggie Tales)
  • In Search of Excellence by Tom Peters (a management classic)
  • Made to Stick by Chip & Dan Heath (communicating your message)
  • Switch also by the Heath brothers (how to bring change to your organization)
  • Good to Great by Jim Collins (and the 30-page monograph dealing with non-profits)
  • How the Mighty Fall by Jim Collins (how to detect and stop the decline of your organization)
  • Y-size Your Business by Jason Dorsey (not read it yet but gets rave reviews about including the next generation of 20-somethings)
  • and too many others to count but this list will get you started
Lead On!

Getting around the FDIC cap on insured bank balances

About three years ago, a new financial service came available which addresses the issue of the FDIC cap of $250,000. This service, known as CDARS (pronounced like the tree), is explained in full at Some banks have purchased this service and some have not; check with your bank to see if it participates. In a nutshell, this is how it works:

• Your church buys a certificate of deposit (CD) for a little less than $250,000 (in order to have any interest earned included in the $250K cap).
• The CD you purchase is actually a CD in First National Bank of Peoria (for example). In turn, First National Bank of Peoria buys a CD from your bank for the same amount. These two banks are cooperating in the CDARS program and have just exchanged money that is fully insured through FDIC.
• You buy as many CDs as you want, all from different banks around the country, to cover your financial assets. The maximum amount you can invest in CDARS is $50 million (I don’t think that’s a problem for anyone).
• The CDARS program does several things:
   o It insures as much money as you want to have covered
   o It invests the church’s money through one financial institution so you get one bank statement (which means you don’t have to deal with a dozen banks and their statements)
   o You earn interest at the going CD rate (which is very low right now – about 1% per year – maybe it will go up soon?)

This is how my church puts this in practice
• My church has a cash balance of about $1.8 million (not unusual for a megachurch)
• We purchased 12 CDs for $100,000 each (that $1.2 million plus the $250K insured through our bank covers the bulk of our demand deposit balance)
• These CDs are laddered so that one comes due every month.
• All interest earned is put into the church’s checking account (which is added to the church’s financial statement and pays for the operations of the finance office)
• Each month our bank notifies me by email and I sign and email bank a document approving the next CD purchase – it is all handled electronically
• This church has a line of credit of $1 million. Because there are severe penalties (invasive of principal) for early withdrawal of a CD, the church will tap its line of credit should there ever been a financial need. Then, we’ll pay back the line of credit as CDs mature each month.
• My finance committee members were not aware of this program and several of them took it to their companies!

If you have questions or want someone to talk with me about this, I’ll be happy to help.

Lead On!