Saturday, December 10, 2011

Leadership and Followship

Recently I came across a couple of really good articles on leadership:
  • Leadership in Church:
    • Oh, those are sticky wickets to address but every single one of them is a potential minefield for both the church and its leaders. And, minefields don't go away. A study of minefields (the ones used in wars) show that mines become more unstable over time and the least little pebble can set them off. This is also true of church life - any event can set off a long-dormant mine. Dig up the mines (carefully); confront the elephants in the church (carefully) - they won't go away on their own but need to be led/taken gently out of harm's way.
  • Leadership in Sports:
    • Actually, the "cover story" is about sports but the article cites some research on what followers want: "According to Hogan’s research, followers want four things: integrity, confidence, decision-making and clarity. But just as important is what followers don’t want: irritability, moodiness, untrustworthiness, indec­i­sive­­­ness, needless micro-management and excessive authority. They perceive these things as incompetent, and pretty soon the leveling mechanism kicks in and there is a subtle rebellion." Those are very powerful words for leaders to remember - all the time.
I also saw a short (less than one minute video) with the former CEO of Xerox. She turned the company around from death's door to being financially successful. When asked about leadership, her answer was that leadership was dependent on followship - how those who actually do all the work see you and follow you.

Years ago I heard that one of the problems of leadership is that sometimes people are following you and sometimes they are chasing you. Obviously, followers are much better than chasers but sometimes you need both to keep you on your toes.

Don't run away from the chasers, turn and ask them point-blank (in a nice way) what they want to follow. You may be surprised by how reasonable their answers are. And you will certainly take the wind out of their angry sails. Make the chasers your followers; make the followers your disciples; make your disciples your new leaders; make the new leaders your successors.

Lead On!

Thursday, December 1, 2011

Funnies - December 2011

More stories from church life
  • Weddings!
    • One January a mom called the church office to reserve the Sanctuary for her daughter's wedding. The mother of the bride (MOTB) asked for a date in June, 18 months from when she called! When the office assistant congratulated the mom on the daughter's engagement, mom said that the daughter wasn't engaged yet but she was sure it would happen soon and she wanted to get the date she wanted reserved on the church calendar. It was an interesting wedding!
    • The most beautiful wedding I've ever heard of was when Miss Alabama got married several years ago. You see, Miss Alabama's bridesmaids were friends she'd met in various competitions. So, preceding Miss Alabama down the aisle were Miss Georgia, Miss South Carolina, Miss Mississppi, and a couple of other beauty queens. As I said, it was a beautiful wedding!
  • The minister's wife left her purse under her pew in church one Sunday. She asked her husband to go back to the church and get it for her. When the minister walked into the Sanctuary, he didn't turn on the lights because he would only be there for less than a minute. He went to where his wife usually sat and reached under the pew for the pocketbook. He grabbed some fabric and heard a yell from a man, the church's custodian. That's when the minister realized that the custodian was sleeping in the Sanctuary on the floor after worship. The wife got her purse and the custodian found another job!
  • Construction began on a new building for the church but first they had to demolish the existing structure. The wrecking ball knocked down walls and the excavator loaded up all the debris into dump trucks. But everything stopped when the wrecking ball swung too far and knocked down part of the mechanic's shop next door. Fortunately the church's insurance covered the bill for a brand new building. This was also unfortunate because the church had future plans to purchase the dilapidated mechanic's shop but now couldn't afford the price of the shop!

Lead On!

Tuesday, November 29, 2011

IRS Tax-Exempt Ruling Letter

Whether or not a church should obtain its own 501(c)(3)ruling letter from the Internal Revenue Service (IRS) is a question with some confusion. It is a simple question with a multi-layered answer so here is my take on this issue.

1.      The IRS considers, by definition, all churches to be exempt from federal income taxes. Thus, just because you are a church, the IRS will not tax the organization for income tax purposes.


2.      Most churches that belong to denominational bodies fall under an umbrella that covers all churches in the regional, state or national organization. For instance, the local Episcopal diocese has a letter with the IRS which covers all churches in the Richmond diocese. That way, churches do not have to obtain their own ruling letter from the IRS.


3.      Times are changing and church finances are getting more complicated every day. In 2008, some churches have intentionally sought to violate the IRS requirement that churches not endorse a political candidate. In 2004, the IRS revoked the non-profit status of 56 churches (albeit temporarily while there was an investigation).


4.      Because some churches are getting involved in national politics, I am of the opinion that each church should control its own destiny as regards the IRS. I would hate for an umbrella letter (covering hundreds of churches) to be revoked because a few churches in that group decided to flaunt the IRS. My worst case scenario would be that the IRS would revoke the tax-exempt status of the entire umbrella while there is an investigation. In the end everything will work out fine, but in the meantime there can be some heartache because of the actions of other churches. So, my recommendation is that each church obtain its own ruling letter from the IRS. Yes, it is a pain to fill out the forms, get things approved, write a check for a few hundred dollars, and wait on the IRS for a few months, but think about the headache and hassle it could save the church later. Again, I feel it is important to control your own destiny and not potentially suffer because of the actions of other churches.

I hope that helps you and the decision by your church. I’ll be happy to talk with anyone about this. In January I’m going to launch a new career of consulting with churches in the area of finances; if I can help you and your church, please contact me.

Lead On!

Tuesday, November 15, 2011

Advice for Young Leaders

A good friend of mine recently became the CEO of a non-profit he's worked at for several years. He asked me for advice on what he should do in his first few days and months. This is what I suggested to him and to anyone who finds themselves in the lonely position at the top of an organization.

·        MBWA – management by walking around
o   This is the single greatest act management can ever do – get out on the floor where things are happening. Don’t hide in your office. Wander around, have coffee, do idle chit chat, talk about football games, be visible and approachable. “The Boss” is scary enough – decrease the fear factor.
o   MBWA is absolutely critical and huge. You get to see how clean (or not) the building is, who is in the office, who isn’t in the office (because of vacation or sick), what offices look like, what the grounds look like, what the morale is like, etc. MBWA  is a great way to get feedback in a non-threatening manner.
o   Administrative assistants will make or break a leader. Keep them informed and find out what’s going on from them. Work the grapevine – make it your friend and put stuff on the grapevine as you need to. When it comes to office equipment, let the administrative assistants be the ones that make the decision about which copier to get (within budget boundaries), etc. Empower them – they are the ones that are going to use it more than anyone else.
·        Find a mentor/coach
o   The leader needs someone to vent to, to seek guidance and wisdom from, and to bounce ideas off of before sharing the ideas with those whom the leader is leading. Find someone you trust and meet with him/her regularly (should be a person of the same gender).
o   This should be one person – some form of sage and whose input does not need to be publicly acknowledged (that person is not in it for the credit).
·        Ask for staff input
o   Within the first 90 days, meet with each person and find out what is one thing they wish would happen or that they need to do their job. Then see if you can make that happen within the next 90-180 days. It shows the leader is listening, cares, and is willing to make things happen if it is within his power (and budget).
o   Meet weekly with the executive staff. Meet monthly with each level of staff, including having a monthly meeting with the secretarial/support staff. Listen to your staff and remind them at least monthly of the big picture vision and strategy for achieving that vision.
o   Always let your staff know what you expect from them and how they’re doing (“One Minute Manager” stuff). When the annual personnel evaluation comes along, you will have met so often with your staff that they will know exactly where they stand with you, so the eval should take about 15-20 minutes (enough time to fill out the paperwork and have a prayer).
o   Consult regularly with your staff and ask them sincerely for insight/input and then act on it. Ask your staff for ideas on how to reach the vision (tactical moves to achieve the strategic goals) - they'll appreciate being heard. Don't kill ideas before they're hatched - let some ideas develop more fully before you either kill them or invest substantial resources in them.
o   If someone gives a great idea that is implemented, give credit to that person, publicly. It’s a great morale booster and costs you nothing, but you gain lots of capital.
·        Read together
o   Get some GREAT books on business leadership and read them together. Personally I prefer business leadership over “Christian leadership” books – I find them more practical and less preachy.
o   Suggestions: “Me, myself and Bob” by Phil Vischer (of Veggie Tales – this is one of the absolute best business books I’ve ever read and funny as heck, too), “In Search of Excellence” by Tom Peters (or other Tom Peters’ books), “The Best Question Ever” by Andy Stanley (Visioneering is also very good but TBQE is one of the best books I’ve ever, ever read). Andy Stanley likes “The E-Myth Revisited” by Michael Gerber and used it to guide his church to what it is today.
o   Discuss the books, learn from the books, critique them, implement what they say, move on to the next book.
o   Go through 2-3 books a year on leadership.
·        Have fun
o   Each quarter (or more often) have the staff do something fun, not professional. You’ll learn more about each other outside the office than sitting in your workplace.
o   For instance: bowling, painting pottery, ropes course, canoeing, ballgame, go to a movie, etc. This is not sitting in a restaurant but doing something together – essentially, making memories from an experience together.
o   Divide the staff and ask them (not your executive assistant) to plan the day and give them a budget (maybe $250 each quarter) for them to plan something fun in an afternoon (or even a whole day). This will help the staff to keep things light when life/work gets very tense.
o   I can’t stress enough how important it is for the staff to get out of the office and do things together and even have events when the staff families are invited to join in.
·        Know the numbers
o   Keep up with all of your financial data. Each month ask the CFO to meet with you (and the treasurer of the board) to review the past month’s financials and to forecast future expenses and revenues. Ask your CFO what numbers are of my interest to others (the ones he/she cites) and be able to repeat those key numbers to outsiders with ease (and understand what you’re saying).
o   Bring your CFO to key meetings and get him to speak to the finer points (the geek-speak detail).
o   Hire me as your financial consultant/coach or your CFO (just checking to see if you’re reading this).
·        Cultivate your top 25 donors
o   Learn who they are.
o   Meet one for coffee each week or every other week (make it a regular part of your schedule to meet with a top donor).
o   In your meetings, share with them your vision for the future of the organization. Ask them for input and insight – they’ll be honored to give it and appreciate your asking.
o   Don’t ask them for money – that’s what they’re expecting. After a few meetings, they’ll ask you how they can help – if they’ve truly bought into the vision. Be able to cite financial figures – they’ll be impressed.
o   Never be afraid to talk money with the wealthy – they’re over it. Non-wealthy types like us are the ones with a problem in talking about money. See “Robbing the Rich” in my blog. The wealthy want to give money away – give them a compelling reason to give it to you – one that they’ll tell others about and feel good about.

Lead On!

Thursday, October 27, 2011


I'm totally convinced that a sitcom could be made about church life. And the kicker is that all the storylines would be based on actual stories submitted by church members and church staff. The problem is that most people would never believe these actually happened. Here are a few examples:

  • Follow that Pastor
    • A pastor performed a funeral. Afterwards, everyone proceeded to their cars to go to the cemetery. As is the custom, the hearse and all the mourners followed the lead car, the pastor's car. The pastor led the way and then completely forgot what he was doing and led the entourage into the parking lot at Wal-Mart. When he got out of his car, he realized he was leading the pack to the wrong destination.
  • Parking Problems
    • A minister parked his stick-shift car in the parking lot which had a slight incline to it. At some point the car slipped out of gear, and a few minutes later a staff person glanced outside and noticed three ladies by the minister's car. They were yelling for help as together they put all their strength in trying to keep the car from rolling down the parking lot into other cars. 
  • Bulletin of Evidence
    • A woman came to the church office asking for a copy of the bulletin for the previous Sunday, the Sunday after Easter. The church's custom was to print the names of all guests who attended the previous Sunday. She wanted the bulletin because it listed not only her husband's name but also that of his girlfriend. The wife had wanted to attend Easter with her husband, but he had preferred to attend with his girlfriend. The wife wanted the bulletin to use in divorce court!
  • Hijacked Website
    • A well-meaning member purchased a website domain name for her church. She not only created the website but also made email addresses for the staff to use. This volunteer ran the whole operation out of her house because the church didn't have the financial or personnel resources to run the website. After a few years, the church decided to take on the website. When a staff member went to the woman's house to talk about transferring the site, the woman very proudly showed the staff member not only the website but how she, a volunteer church member, was monitoring all the emails that the staff was sending and receiving. Oh MY!
  • We Have Liftoff
    • The spring-loaded candle on the candelabra was stuck, but the groom worked hard to loosen it so he could join his bride in lighting the unity candle. The bride was growing impatient as she held her candle. The groom's father stepped up and handed him the candle the father had used to light the groom's candle (and which the father had taken to his seat). The bride and groom then lit the unity candle, she put her candle back in its place, the groom placed his extra candle on the floor, and they began walking back to the altar. It launched. Very high. The spring-loaded groom's candle finally loosened, and the innards of the candle launched. Every eye watched it soar, and everyone heard it clang on the stone floor. The MOTB (mother of the bride) was aghast. The soloists stopped singing because they were laughing so hard. The minister couldn't gain his composure and guffawed four times before he was able to pronounce them "husband and wife."
  • Babies!
    • A baby was brought forward by his parents for christening during a hymn. When the minister uncovered the small baptismal font, he discovered it was dry as a bone. It had not been filled by the volunteer in charge of that. The minister motioned to the music minister to keep singing, and the minister disappeared. A couple of minutes later he came back carrying a pitcher of water from the church kitchen and poured it in the font. The baby was christened with no further delays.
I'd love to hear your stories. I'll put more on here, too. Who knows, maybe we can get someone in Hollywood to produce "Steeple Chase."

Lead On!

Sunday, October 23, 2011

Church Violence Website

I found a website that deals exclusively with church violence, Church Crime History. I do not know this person so I'm not endorsing it but he has a lot of information and statistics. I believe that his purpose (and mine, frankly) is to make people aware that churches can have violence. Information is always good - information can be used to help members be more aware of what is happening in other churches. Share this resource with whomever you feel it would help to know about this.

Let me encourage church leadership to take some pro-active steps for safety and security. The depth of those actions is dependent on the church's budget and the perceived potential danger to the church and its people. Some actions won't cost the church a dime (such as setting up a Safety Officer Team) while others are much more expensive (such as security cameras). It is true that many of the items listed in Church Crime History could never be prevented - no argument there - but some precautions are always a good step in the right direction.

Lead On!

Wednesday, October 19, 2011

Fundraisers for Youth Events

Fundraisers have two purposes:
  • To make money in an effective and efficient manner
  • To build unity among the participants and interested people around a specific goal

 All fundraisers need to have a balance between these two purposes and do it in a fun way (that’s the “fun” in fundraising). Too often, the group putting on the fundraiser focuses on one purpose to the neglect or even exclusion of the other purpose. That is not good and will harm future efforts. For instance, if you put on a concert and ask a bunch of people to work really hard in all the areas of the concert but then receive only $350 after all that effort, the volunteers will probably come away disillusioned about the results (but have good memories of the event). They achieved one purpose but nearly killed themselves without achieving the other purpose. On the flip side, if you put on an event and raise lots of money with little vested support, people may not feel as committed to the cause but feel incredibly proud of how much money they raised. Balance is good. Balance is key.

Another key to fundraising is to spread out the “ask” over a period of time such as several months. Some organizations do a “blitz ask” but they’ve done months of preparation (and received gifts during the prep time, too). Success is always, always a factor of how much effort you put into it. Every good fundraiser will require lots of effort on everyone's part - make sure that you get enough "return on your investment" to have made all that effort worthwhile.

Some fundraising ideas for youth events:
Penny War
  • Boys versus girls. Every penny placed in the girls or boys jar is one point towards them. Every dollar added to a boys' or girls' jar is a negative 100 points towards them. After a month of war, the winners will be decided by who has the most points. The loser will then have to prepare dinner for the winners.
  • This is easy to do and raises a few hundred dollars without a lot of effort. This is a good balanced way to raise money in that every week you can promote it and even have a running total. Frankly, I do suggest that the money jars are emptied each week for two reasons: to announce the weekly running totals to egg on each side and to not have money sitting around in a jar which can walk off.
 Spirit Nights
  •  I know that both Chik-Fil-A and Tropical Smoothie have spirit nights we can tap into where during a certain time period, receipts taken will yield a percentage (normally 10 to 15 percent) to the student ministry. TS will even let us host a plinko game which raises a lot of funds.
  • The secret to working with local vendors (and some companies will sponsor car washes) is volume. The kids are going to have fun at the store and that will build unity – that is certain. How much money is raised is entirely dependent on getting people to come and/or buy tickets ahead of time. Kids need to be "in my face” about buying tickets. This a good idea and it can be held multiple times between now and when you need the funds without getting old and stale.
Yard Sale
  • The church rents out parking spots in the parking lot where people can host their own yard sale on the church's property (the church makes money off the rent of parking spots). In another part of the parking lot, the church sells items that people donated for the yard sale (the church makes money off the sale of items). The church can sell concessions and make some money. There is always a fear of someone selling something offensive, but that can be addressed with the individual and you can let them know what we won't let them sell (like porn magazines or offensive t-shirts).
  • This requires a LOT of effort and extreme coordination. Advertising is the key, too - get the word out that there is a community yard sale and people will buy reasonably priced parking spots ($10 is suggested) if they know there will be crowds coming. This can be a huge unity event for the youth as they work ahead of time and spend the entire day helping. It will raise at least a couple of thousand dollars.
  • This is my favorite way to raise money for youth functions. People bring in items that are of good value – other items should go to the yard sale! In one evening, there is a silent auction followed by a live auction (with a real, live auctioneer). Every year I've seen this done, the church raises over $12,000. The youth sell tickets beforehand and they drum up interest; the youth spend the Sunday and Wednesday before moving items; a team of volunteers helps coordinate the event; the youth work the auction by serving food and telling their story from the stage while people mill around.
  • Asking people to sponsor a kid or part of a kid for a trip always works. By this I mean informing people how much it will cost and then flat out asking them to fund ¼, ½, or the whole cost of a trip. People will do that. Afterwards, you can have the kid(s) that got the scholarship(s) to write a thank you and say how much the trip meant to him (them).
Sunday morning doughnuts
  • Krispy Kreme will sell doughnuts on the cheap for fundraisers and then you can re-sell them on a Sunday morning by the box.
What other successful ideas have you been a part of?

Lead On!

Saturday, October 15, 2011

Leap of Faith

For several years I have felt that my gifts and experience in church and non-profit finance could be used to help numerous churches and other organizations. In the 6 ½ years I’ve been at my current church, I’ve accomplished a lot in getting the church's finances and facilities where they need to be. I’ve helped the church operate more efficiently, effectively, and use technology better; I want other churches to use their resources in the best ways possible. I want to be able to offer my "services" to other places, so I need to make myself available. I believe this will free up some of the church's resources in order to hire a facilities manager and/or executive pastor--two positions which the church needs but doesn't currently have.

Because of this, I am resigning my position as Church Administrator of my church effective January 2, 2012. From now on, I am actively seeking a different challenge--and we (my wife and I) hope that will be as a self-employed consultant where I can work with multiple churches and non-profit organizations. 
One of the joys I’ve had in the past few years is authoring this blog on church finances, which has had over 2,000 hits (not bad for a site focused only on church finances). I know there is a need for my services, but it will be up to God and prayers for churches to be willing to accept some outside help with their internal finances.
So, in January 2012 I’m launching a career in financial coaching/counseling for churches who need sound financial advice (how to save money, how to bring in more money, how to make the finances and offices more streamlined, efficient, and effective). I don’t know of anyone else doing this (maybe there’s a reason for that!) but it is a passion of mine. In today's economic strain, churches must become even better managers of the resources they have.
As you can imagine, this is a huge step of faith for us as a family and for me as a professional. We ask for your prayers as we go through this change and for your creative ideas about places that might be able to use my expertise. Please contact me ( to discuss financial coaching/counseling for your church or organization.

Lead On!

Thursday, October 6, 2011

Steve Jobs and Church Mission Creep

Wow, everyone is writing something about Steve Jobs - I better join the parade before I get left behind. Well, sort of - I'm not a parade-kind-of-guy - more of a do-it-because-it-is-the-right-thing kind-of-guy. So, here's my angle on Steve's legacy and what the church can take away (the answer is "almost everything").

One of the things noted in several of Jobs' obits is the reference to his faith, Buddhism, and how he kept a very simple, if not spartan, lifestyle. Nothing on the walls of his house, a bare bed, little furniture, etc. He didn't accrue a lot of material things - even though his wealth afforded him that luxury. That same passion for keeping things simple transferred to his work ethic. Several months ago I read the story of the first iPad - the presenters explained how you could do something in about four or five steps. He handed it back to them and said, do in one step. They argued that the technology wasn't there yet but he refused to accept their response. A few months later they handed him the iPad that met his specifications - clean, simple, and easy to understand and use.

I have a passion for keeping things simple, too. Just ask my kids - "it must be in the recycle bin, I'm sure dad threw it away" is repeated often in our house (even when I'm not guilty!). Several years ago I worked for a community foundation where I got to manage $125 million (that was fun) and I learned about "style creep." Style creep is when you hire a fund manager to invest your money in a certain financial style (growth, value, mid-cap, small cap, etc.) and that manager begins to move the money away from how you directed into areas that are not of your choosing. If not watched, fund managers can really mess up your investments - read your investment statements.

Mission creep is when the church begins to lose focus on what it is supposed to do. The church starts out with good intentions and really plans well what it should do and how it should plan its resources (buildings, people, and finances) to meet that need. Then, somewhere along the way, someone comes up with a need and the church agrees to create a ministry to help with that need. Then, another need comes up and another one, and pretty soon there are dozens of needs and respective ministries. The church is now allocating closets, money, people, and scores of volunteers to take care of those needs. Guess what, you've been hit by MISSION CREEP.

You are no longer focused on the one (or two or three) things that caused you to come into being in the first place. The church decided to placate a few people by funding these extra missions. Now, I'm not saying these extra needs shouldn't be met, I just don't think that the church is the place to meet every need. I know there are other organizations out there that are meeting those needs. When a member comes requesting the church to create a ministry that will lead to Mission Creep, the church leadership needs to find a local ministry and then encourage that person to volunteer at that ministry. There is no need to duplicate things - it can only hurt the true mission of the church.

Be cautious about Mission Creep - keep an eye out for it at every turn because it is there. Help your membership understand why the church cannot do everything for everyone - that is the value of partnerships with local organizations/ministries. Keep your church laser-beam focused on keeping things simple and true to the original mission (see Matthew 28:19-20 for clarification). Do not succumb to Mission Creep (and RIP, Steve Jobs).

Lead On!

Saturday, October 1, 2011

Safety Officers

Just over three years ago I established the Safety Officer Team at my church. No one asked me to do this, I realized the need for this after reading an article about the number of shooting deaths in churches. From 1999 to 2007, 41 people died in churches from gunfire. This does not include violent deaths at church-related camps or other properties nor does it include violent deaths by means other than guns (such as the poisoning of the church coffee pot in a New Hampshire church that killed one person). This figure does not include the scores of people wounded in shootings such as the two pastors wounded in September 2011 in a church in Florida.

Churches used to be considered sanctuaries (in every sense of the word). Churches are no longer immune from violence. Instead, churches must be proactive in protecting their facilities when so many people are present. Churches can do this in several ways:
  • Volunteers - these are typically members of the church who have had or are currently police officers. 
    • I  discourage the use of members of the military. I greatly respect members of the armed forces, but typically they are trained to shoot first and ask questions later; police are trained to ask questions first and shoot only as a last resort. 
    • Members who have neither police nor military training could be a risk the church should not take. My "risk-management hat" tells me that some untrained members may be either trigger-happy or trigger-reluctant and either situation can put people at risk.
    • Police (current or former officers) are probably the best way to go because of their training. This also gives police officer members of the church the opportunity to give back to their church using their professional training - something that many of them want to do but have never been asked to do.
  • Off-Duty Paid Officers - This is the best form of protection but it is also the most expensive. These officers can be either in uniform or in plain clothes or a combination. 
    • Some churches use traffic officers to help with getting cars out of the parking lot; those officers are the first line of protection for a church. Someone bent on harm may see a traffic cop and choose another, less guarded, site and bypass your location. 
    • High profile ministers usually have an officer that is assigned to be with the minister to ensure no one causes harm to him or his family while the minister is on the church's campus.
    • Paid plain clothes officers are usually used in large churches where an officer's presence is needed in a worship environment but where the church members do not need to be alarmed by the number of police. 
    • Sometimes a church will learn of a threat against a minister or the church itself. You need to decide how you'll address that threat and there isn't an easy answer. Every threat needs to be addressed individually.
      • Do you ignore it? A foolish action (in my book)
      • Do you bring in only volunteers? A good move but not far enough
      • Do you bring in paid officers in uniform? That is a great move but it does have consequences. The person making the threat may see the officer and decide to postpone the attack nor even cancel it. It may also alarm church members who are not used to seeing a uniformed officer.
      • Do you bring in a paid undercover officer? That is also a great move. It will not alarm church members but it does have the drawback in that the person causing the threat may continue with his (or her) attack.
  • Combination of volunteers and paid officers - This is probably the most efficient and effective method. 
    • It is an efficient use of church funds by using volunteers inside the church and a paid traffic officer. When (not if) there is a threat or there is a perceived need for increased vigilance, additional paid officers can be brought in.
    • It is effective in that the first line of defense is always the most visible officer - the traffic cop in the parking lot.
    • This is the way that I've gone to - I like and it works quite well. We've weathered 2 intentional threats and the heightened security around 9/11/2011. 

Below are the Safety Officer Guidelines that I created for my volunteer officers. My regular paid officer sees these guidelines, too. By the way, as my way of thanking them for their service, I meet with them once a year (the only official meeting I have with them). I invite them all, volunteer and paid officers, to lunch and I pick up the tab. I want them to get to know each other so that all the good guys to know each other - some churches are so large that police from different jurisdictions have never met each other. Take your volunteer officers to lunch - they'll enjoy it, you can take the opportunity to acknowledge and express appreciation for their community service, everyone will get to know each other better and you can remind them of why they are so needed and vital to the church.

Lead On!

Safety Officer Guidelines
  1. The purpose of the Safety Officers for our church is for passive not active threat assessments leading to actions only if absolutely necessary. Passive action means observing individuals but not approaching or engaging the individual unless a specific threat is noticed.
  2. Only trained law enforcement (present, former, or retired) should be included as a Safety Officer of our church.
  3. Safety Officers may carry weapons on church grounds but that is typically not necessary.
  4. Safety Officers may wear uniforms but that is not typically necessary.
  5. Safety Officers must know who else is a member in order to assist or recognize another officer during a crisis. 

  1. Whenever a Safety Officer is present at the church, he/she must consider him/herself to be “on duty” and available to respond.
  2. Safety Officers must be aware of individuals who have the potential to harm others. If a Safety Officer notices an individual believed to be a threat to others, he/she should approach the individual to determine the danger. If the danger is real, then the Safety Officer.
    1. Should summon on-duty officers (call 911)
    2. Maintain personal or visual contact of the individual until on-duty officers arrive
    3. Attempt to get other Safety Officers to help with the situation
    4. As a last resort, escort the individual out of the building if the person becomes disruptive
  3. Safety Officers should be aware that many times dangerous individuals want to gain a reputation or fame for themselves and their actions. The most prominent person in the church, and thus the most likely single target, is the senior pastor. If a Safety Officer notices an individual approaching the pastor during the worship service, the officer should walk forward to see if he/she can be of assistance.
    1. During the music – pastor may be approached by staff trying to tell the pastor some emergency. Only rarely will anyone else approach him.
    2. During the sermon – this is a high visibility time for an individual wanting to gain fame. Only rarely will anyone else be on the platform
    3. During the “altar call” – this time is when the pastor is most vulnerable since people are encouraged to come to him. Someone dangerous could get within inches of the pastor and not draw any attention.
  4. Safety Officers should not draw attention to themselves or their position unless a threat is imminent.
  5. Safety Officers should get to know each other and the church-hired traffic officer.
  6. The work of Safety Officers will go entirely unnoticed and unrecognized by the church. But please know that those people who are aware of your work greatly appreciate your service. It helps the staff and church do its work with peace of mind – thank you!
Lead On!

Monday, September 26, 2011

Employer FICA is Illegal for Ordained Ministers

Last week a colleague at another church and I had an email exchange that might be of value to you. The question was whether ordained ministers should have the employer's portion FICA paid by their church (NO!). The underlying issue is bigger than that - too many times church leaders tell their staff to do things which are illegal because those leaders are not familiar with tax laws. When the staff attempts to inform the pastor of the laws, the pastor instructs the administrator to do it his (the pastor's) way regardless of the law. This puts the administrator between a rock (his boss and paycheck) and a hard place (the IRS and the law). 

Pastors, please listen to your administrators. That's why you hired them; that's what you pay them for. Ask them for information rather than telling them what they should do. You may not like their answer - remember, they are just the messenger. Take your frustration to Congress, please, not on your staff.

I do not know what my colleague will do but this person is in a very difficult position. Unfortunately, I hear about situations like this at least once a month.

Lead On!

It’s been a long time since I consulted you! I have a problem and need your expertise. One of our ordained staff was approved to designate part of her salary as her housing allowance yet wants to continue to be treated as an employee. Does that mean we pay our share of her FICA (Social Security and Medicare)? Any other things we need to know regarding this? How do I prepare the W-4 toward the end of the year when in the first eight months, her whole salary was treated as taxable income but beginning September, we exclude that housing allowance? I need help and guidance from you. Thanks!

Great question and I got an answer for you – I heard it this past summer at the church administrators’ annual meeting.

If a person is ordained, then that person cannot be treated like an employee for Social Security Administration purposes. That person is self-employed. Thus, the non-profit can never pay any employer FICA and Medicare for that person. The ordained minister bears the burden of both the employee and employer portions of FICA and Medicare.

Housing allowance can still be taken out of the salary. However, the housing allowance portion is only prospective from the time it was approved by the governing body. That means that if the minister was on staff on 1/1/2011 but that the housing allowance was approved by the board on August 1, 2011, the housing allowance is only effective from August 1 through December 12 – it is not retro-active to January 1.

One last thing this attorney said, if you are made to do something that you disagree with, then do not sign the W-3 – get someone higher up to sign it because if the IRS or SSA come to your office, you can direct them to the person who signed it, not you.

Thanks for contacting me and I hope I answered your questions. If not, I’ll try again. Let me know.

Thanks once again for your prompt reply. My concern is that it’s my boss I’m dealing with. He wants me to treat one of our staff with a housing allowance but to continue to withhold and pay the necessary taxes and SS & Med tax for the employee. I’m confused as to what I should do.

You’re in a very difficult place – you need an “outside expert” to explain the legal side to your boss. There are several ways to go about this.
      * Gather data from reputable sources such as Richard Hammar’s Church & Clergy Tax Guide. It’s published annually and costs $40 – the whole book is over 700 pages long. It is the “Bible” for church administrators on legal and tax matters. If you don’t have it, please get it ASAP.
2       * Get a person to write up an opinion to give to your DOM. This person can be someone like me, a nationally-known expert (see, or the best scenario is the firm that does your audit.
3       * Get someone to visit with your boss to explain the situation and the consequences – fines, penalties, loss of 501(c)(3) status, and, if it is bad enough, jail time.

What he is asking you to do is clearly illegal. He needs to be educated about this. The laws have been the same since 1984. I don’t know how old your boss is, but he may be thinking of pre-1984 laws or he may have heard of pre-1984 laws from some colleagues.

Let me know if I can help you in this situation.

Thanks for the advice and I will pray which action to take. I’ll study the things you listed.

Lead On!

Monday, September 12, 2011

Budget Percentages

Below is a recent email exchange with a friend of mine (names omitted).

Email Question:
I have a church that wants help examining their budget allocations by categories: missions, personnel, programs, etc. They want to look at similar size churches with similar size budgets. They want to know whether their allocations are in line for their type of church. Basically, they want to benchmark their distributions. They suspect that their personnel budget at 67% is high, but the church doesn't know any different. And they want to know why they do not have any money to do actual programs.

Do you have access to any sort of database like that from any of your connections?

My response:
  1. No, I don’t know of any authoritative written source of ratios. Sorry.
  2. My experience tells me the following makes commons sense

a.      Personnel
                                                              i.      Range of 40-60% of undesignated receipts
                                                            ii.      Ideally about 50%
                                                          iii.      This includes the ministers and administrative assistants – people key to accomplishing the goals, mission and vision of the church
b.      Facilities
                                                              i.      Range of 15-25% of undesignated receipts
                                                            ii.      Ideally about 20%
                                                          iii.      This includes facilities staff costs
                                                          iv.      The percentage will be higher if a church has debt; lower if there is no or low debt.
                                                            v.      A church should spend annually about 2% of the cost of replacing the building on maintenance. If you have a building worth $1 million, then spend about $20,000 on maintenance. The rest of the percentage will be spent on salaries, utilities, cleaning supplies, commercial property insurance, capital reserve funds, etc.
c.      Programming
                                                              i.      Range of 20-35% of undesignated receipts
                                                            ii.      Ideally about 30%
                                                          iii.      This includes education, worship, missions, funds budgeted for allocation to outside organizations (Cooperative Program/Missions), etc.

That being said, these percentages go wild in various types of churches. New, emerging, highly growing churches have very high salary percentages and loads of debt. Older, established churches have paid off their debt so their programming is high and salaries have stabilized in the 50-60% range. While there is no “one size fits all” there are well-grounded rules that will help a church stay out of fiscal trouble. Hope this helps.

Lead On!

Sunday, August 28, 2011

Church Insurance

On 9/11/2001, the insurance industry took the largest hit ever - over $40 billion dollars in claims - as a result of the terrorist attacks on the twin towers, the Pentagon and the planes. The insurance industry raised their premiums in an effort to recoup their vast losses - commercial insurance prices rose a lot in 2002 and then stabilized. In an effort to help the insurance industry, Congress also permitted the industry to levy a terrorism fee on new insurance policies (this authorization for this fee expires in 2014). As a result, church's have been paying more for their commercial property insurance for ten years.

Actually, the price increases for churches are not entirely attributable to 9/11. There were two other series of incidents in the 1990s that exacerbated church insurance premium hikes. The Roman Catholic Church (and other church's, too) had a series of well publicized pedophilia scandals which then tainted all faith institutions and raised premiums. There were also a number of church vans that tipped over and killed several people. 9/11 was the third of unrelated incidents which affected church insurance.

Since 9/11/2001, every commercial property insurance has carried a terrorism clause and premium. The dollar amount isn't much and is rarely noted by the policy holder and not often mentioned by the insurance agent. This is a voluntary payment - churches can exempt themselves from paying this by simply stating they do not want this coverage. The coverage is automatic unless the church specifically states it doesn't want the coverage. Please call your insurance agent and have that coverage removed. In my opinion, churches don't need it because of the very limited coverage it offers: the terrorist attacks must be perpetrated by US citizens and acknowledged as terrorist acts by Congress are the only ones covered. Therefore, nothing on 9/11 would be covered but the Oklahoma City bombing would be covered.

In recent years I put my church's insurance contract out to bid. Here's what I learned. We paid over $42,000 for five consecutive years. In the year that the contract went to bid, the incumbent agent came back with a quote of just over $28,000 - a reduction of 35%. Two other bids came in at the same price so I knew that was a reasonable amount. In December 2010, a year after the initial bidding, I put the contract back out to bid and got back a quote of $24,500 - even more savings. We have shaved about 45% off our insurance contract.

With that savings I paid for a current valuation of the church's property so that we have an accurate estimate of the worth of the church's buildings and furnishings. I also got a video inventory of every room, cabinet, closet and office in the church. We made several copies of that video inventory and placed the copies with different people in their homes (away from the church), including our insurance agent. I'm in favor of inventories but not paper ones - when it says "10 chairs" there is no knowing the worth of those chairs. An image of those chairs allows for better accuracy in getting an insurance settlement.

So, please do the following

  1. Call your insurance agent today and delete the terrorism coverage on your church.
  2. Put your church's insurance contract out to bid as soon as possible. Get at least three quotes and chose the low bidder.
  3. Get a current valuation of your church's PP&E (property, plant & equipment)
  4. Make a video inventory of your tangible assets and have copies made for several people

Lead On!

Tuesday, August 23, 2011

9/11 - 10 Years Later is on a Sunday

This year the anniversary of 9/11/2001 is on a Sunday. Churches will be filled with people as on every Sunday and many churches will make note of the sacrifices of the people working in the Trade Center Towers, the Pentagon, and the four airplanes. Hopefully they will also recognize the first responders (fire and police personnel) who rushed into the burning buildings only to have the towers collapse and kill them. 

While it would not be appropriate to either trivialize the significance of 9/11 in American history, it is also not right to make it a jingoistic or nationalistic event. That day was one of the worst terrorist attacks but it was preceded and followed by scores of other terrorist attacks across the world (Nairobi, Madrid, London, Oklahoma City, Bali, Beslan, Mumbai, etc. to name but a few of the most infamous and deadly). The attacks are the feeble attempt by a few to disrupt lives and impose their ideology on others.

For 9/11, I’m asking our members of the church's Safety Officer Team who are active duty police officers to come in uniform (with weapons) and with a marked car. Ostensibly this is to remind people that on 9/11/2001 it was the first responders who voluntarily went into the burning towers and to their deaths. The other reason for very visible officers is to deter someone from attacking the church. Of course, our regular traffic officer will be on the street with his marked car, too. There has been much speculation that Al-Qaida or some other organization or person wanting to make a name will attempt a terrorist event on this upcoming anniversary.

Inside the church's lobby, I've suggested that we have a poster for people to sign and write notes on. Actually, we need four of them because Sunday afternoon, we can take each of these four posters to the three fire stations and one police station who take care of our church. This will be our way of thanking them for their service to us but also to say that we remember the day they lost so many of their brothers and sisters.

Let me encourage every church to have some acknowledgement on 9/11 of the first responders in their area - that is a great tribute to those who died 10 years ago. But let me also encourage you to take precautionary measures to discourage terrorists.

Lead On!

Tuesday, August 9, 2011

Capital Budgeting

The List
Every church needs more money for it's capital projects. Oh, I presume that you have a list of capital needs which means you've already done a study of them. If not, here's what you need to do:
  • Itemize
    • Make a list of every thing you need to do in the next ten years. 10? Yes, because I guarantee you do not have the money do it all this year so you need to have a plan of what you're going to do over the next decade. Equipment will break down and need to be replaced. Keeping a list of your HVAC (heating, venting, and air conditioning) equipment and what needs to be replaced in the next few years will help you set money aside for those needs.
    • Also, there are things that you don't see now that you will need in the future. In 1990, no one had any idea of the power of the internet - now it is an indispensable part of every office. Who knows what the next 10 years will bring - be prepared to control the future rather than having the future take control of you.
    • The list needs to items that you know about but also what others see. No one person knows all in a church, consult with others (both staff and lay members) about what should be on the capital needs list.
    • Most capital needs lists are physical plant items: air conditioning units, roofs, paint, furniture, buildings, etc. There is nothing keeping a church from establishing a capital needs list with items related to non-physical needs - items that will help others outside the four walls of the church and/or will enable members to go farther and do more. I wish more capital needs lists had other items such as
      • Endowment or foundation funds: this would be a pool of funds to meet present and future needs of the church whether it is a physical plant need or a ministry need.
      • Mission fund for a specific trip coming up or to take care of a ministry need somewhere else. 
  • Prioritize
    • After you've got a list, put them in some type of order. The best order is one which indicates their priority for being accomplished - the priority of need. This order is very fluid - some things will drop in priority while others will rise according to the needs of the church at any given time. For instance, new interior signage may drop in priority when people realize that the condition of the children's furniture warrants more attention and funding.
    • This does not mean that you'll do the items on the list in that order. Several things may interrupt such as
      • A donor sees something on the list that tickles his or her fancy and the donor decides to take care of that item(s). There are donors like this in every church - let members know about the list and you may be surprised by how many items are "just taken care of."
      • Some items are so big that you can't do them in one year; instead, items are taken care of in phases over several years. I'm doing that right now with several items: installing electric shades in the dining room and gym; replacing all copper gutters and downspouts with aluminum ones with gutter guards (so I never have to pay for the gutters to be cleaned again); putting in new windows throughout the church; etc.
  • Monetize
    • Put a dollar figure beside each one. The dollar figure is very much a guess, but an educated one.  Do not spend the time now to get quotes for every item, just take a stab at how much each item will cost (aim a little high, too!). That way, when people see the list, they'll understand the scope of the needs. Also, if someone wants to "own" one of the items, they'll know how much to give to the church to cover that specific item.
  • Date-ize
    • Establish goals as to when items will be done.  These dates can be fluid, of course. But if you don't put some type of date/goal, then it may never get done. Put it on the list with a desired "due by" time frame even it is done piece-meal over several years.
  • Publicize
    • Tell people what the list contains, why items are on the list, ask them for additional items for the capital needs list, be willing to alter the list as needed, and continue to tell people about the list. The more publicity you can create, the better. You're not "poor-mouthing" the church, just making people aware of items that they may not know about or may have over-looked. Help people be aware of the needs - then they'll support you in your efforts to meet these capital needs.
    • One of the ways that I make my list available is to put it in a rack just outside my office door. I totally believe in transparency so I make all financial info available to anyone who comes to my office (and a limited amount online at the church's website). That rack contains four items:
      • The latest audit by the independent audit firm
      • The most recent monthly financial statement
      • The current capital needs list
      • Give away books on stewardship and generosity (The Treasure Principle by Randy Alcorn and Fields of Gold by Andy Stanley)
    • When a project is underway, let people know what is being done and why it is being done. AND, thank them for their financial gifts which made that work possible. Acknowledge their generosity every way you can whether it is in print or from the platform.
  • Review-ize
    • Every few months (definitely once a year), go over the list. Move things around in priority, re-value items as you have new info about their cost, change the "due by" dates as needed, move items to the bottom "already done" category, etc. The capital needs list is organic - don't let it be static.
The Money
I tell my vendors that while I cannot afford a new piece of equipment this year, I can pay for it in five years by setting money aside. Where does this money come from? Lots of sources - and that is key: tap various areas of the church's finances in order to pay for the various projects. Finding different pools of money to do things will let you do more. Here are some examples:

  • Use the church's reserve funds for things that are needed. That's what the reserve funds are there for. Don't deplete the reserve funds, but also don't let those funds just sit there when they can be used for immediate and/or pressing needs. If necessary for a big project, tap the entire reserve fund with the understanding that the money will be put back if the church ends the fiscal year in the black.
  • If the church ends the fiscal year in the black AND it has fully funded the reserve accounts it needs, then use the excess to pay for capital needs. Make sure that the governing body of the church authorizes this expenditure and as often as possible, let the congregants know about this project and how it was paid for out of their generous gifts to the budget.  
  • The church's foundation was asked for money for the renovation (complete gutting) of the oldest bathrooms in the church. The foundation was informed that the total need is $100,000 and they would be approached five years in a row for $20,000 each year to do this work. The foundation agreed to fund this. 
  • The gym needed new equipment. The need was made known to parents during Upward Basketball games and over the course of about 9 months, over $12,000 was received for this need. This money came from people outside the church so these gifts didn't affect the church's budget receipts - this was "gravy money" which we would not have received otherwise. 
  • Talk about specific needs with various members of the church who you know have the gift of generosity. Twenty years ago a family donated funds to enhance a room in memory of a loved one. The room is increasingly out of date and needs some re-touching. I approached the family and they are more than willing to underwrite the cost of renovations to this room. In fact, I gave the family a ballpark of how much this would cost and they said that money is not a hinderance. They are a wonderful family and example of generosity.
In summary, keep a list (with lots of input), check it twice and thrice, find the money from lots of different pockets, spend the money while you tell people what you're doing and why, and say "thank you" lots of different ways.

Lead On!