Tuesday, October 30, 2012

Spears, Tridents, Pitchforks, and Rakes

I am concerned about the focus of the church, or its lack of focus. There was a time when the church in the United States was relatively financially flush and spent its money on a variety of ministries. Churches had food pantries, libraries, gyms, etc. I've even heard of a church that had a minister of softball!

My concern with this is that lots of organizations do those same things. Some of those organizations are Christian, while others are completely secular; some do it well and some don't. But there are others out there doing this work. So, why does a church feel the need to replicate what is already being done by others especially in today's very tight financial economy? I fully believe that churches should be involved in social ministries, I just don't think those ministries have to be located inside and paid for by the church. Take advantage of the economies of scale of several groups working together.

Here's my challenge to churches: stay on your mission-critical path. Focus on those things that no one else is doing. Concentrate on what you were tasked to do by Jesus Christ. Do what is in the marrow of your bones. Stay away from things that lead to mission creep.

Instead, if a church member wants to start a ministry, ask that person to find out what other groups are doing the same type of work in your area. The other groups may or may not be Christian, but that doesn't matter; we don't always work with Christians, we work for Christ. Next, find out which of those groups is the most effective, most efficient, and financially transparent in what they are doing. Finally, ask them if they could use additional volunteers and perhaps an occasional financial gift--and then partner with them. 

Churches don't need to use their resources to accomplish everything. They need to use their resources strategically. There are three main resources a church has: buildings, money, and people. When a church uses one, two, or all of these for a ministry within their own walls, they may take away resources that could be used for the church's critical path needs. And, when a church uses some of its resources in a ministry outside its buildings, it gets its people and money to be involved and invested in the community--exactly what Jesus asked us to do.

Every manager knows that he or she can focus on 3-7 goals at any given time, at a maximum. Do anything more and projects began to suffer; resources get scarce. Businesses know to concentrate on no more than five major items at one time (for confirmation, read any book by business guru Jim Collins). ITT is a great example of business that decided it could do everything at the same time. You've never heard of ITT? That is probably because it went bankrupt decades ago.

Churches need to learn from businesses and remain focused on a primary goal: sharing the Good News of Christ. Extraneous ministries are good, but they can be done by church members volunteering at other well-run organizations. They will still be able to explain their motivation in helping others: because of their desire to share and exemplify God's love.

Here's an analogy: if you take one piece of steel, you can shape it into a spear, trident, or even a pitchfork and those one, three, or five points can make a very strong impact. Those points are always going in the same direction and are virtually unbreakable. That same piece of steel can be made into a rake which has 20 or 30 prongs which bend every which way and sometimes don't even work together, bend at awkward angles, or even break off.

I challenge every church to be a spear,  a trident, or a pitchfork--singularly focused, very strong, and unified in its mission. Too many churches are like rakes going in lots of different directions with a wide variety of ministries. Use your resources strategically; use them for the Kingdom of God and the path on which God has set the church.

Lead On!

Friday, October 26, 2012

Financial Records Retention for Churches

Records retention of financial data can get very complicated very quickly but I think it should be simple. I've studied different charts but it all can be divided into two categories: 7 years and permanent.

7 Years
  • Bank statements & reconciliations
  • Contribution records
  • Accounts payable records
  • Payroll detail
  • And other financial detail records
  • Commercial insurance records and payments (property and workers' comp)
  • W-2s, W-3s, 1099s, and 1096s
  • General Ledger detail
  • Monthly financial statements
  • And other big picture records
The short-term docs are kept mostly in case of a church or staff member being audited by the IRS; IRS audits can go back only 7 years maximum. Also, after 7 years, most financial info is considered "historical" and not relevant to the church's current status.

The reason for keeping insurance docs forever is for legal purposes: if something comes up years later (child molestation or a building issue), you want to get the insurance company at the time of the incident to pay for and handle all the legal issues You need to keep a copy of the policy and payment of the bill to prove it was in effect. Other long-term docs are kept for legal and financial history; they are rarely consulted but it is a good way to keep financial history. There is no legal or financial reason to keep records of individual gifts beyond 7 years.
BTW, there is no permanent or long-term accepted standard for record-keeping. Right now the best way is on paper with an electronic backup in PDF format. Everyone is waiting on the Library of Congress to determine the definitive long-term storage but LoC is waiting on technology (which changes constantly). Until then, print things out (old-school) and have an electronic version (new school).
These docs need to be stored
  • In a climate controlled environment such as a closet
  • Above floor level  so that rising water won't damage them 
  • Behind a secure door which is keyed differently than all other building keys
  • In boxes on shelves to make access in subsequent years easier
  • Together by fiscal year and all permanent records need to be stored together
  • And, the financial records storage closet can also be used to store items that just don't fit in the finance office.
Each year, the oldest docs need to be shredded. I took the annual shredding chore and made it into an opportunity to help church members. I announced, especially to the senior adults, the day that shredding would happen and encouraged them to bring in old docs such as tax records and bank statements. The seniors were very grateful that the shredding could be done at no cost to them and it didn't cost the church any extra either.

Shredding will cost less than $100 or you can see if your bank will shred your docs for you. Some businesses have "shredding parties" to draw new customers - take advantage of that even if you don't become one of their customers.
Lead On!

Friday, October 12, 2012

Proverbs 22:9

Blessed are those who are generous, because they feed the poor.

Motives are at the heart of generosity. Why are you generous? What action, event, cause, purpose, or reason makes you generous? Every person has a different motivation for being generous.

The writer of Proverbs in the Bible says that one motivation is to get nothing in return. Feeding the poor means you don't expect anything in return. In fact, you'll probably be met with suspicion as to why you're feeding the poor - suspicion from both the poor you're helping and from your peers who wonder at your motives. So, to see who is truly generous, see how they act around the truly poor. Observe them, their interactions with the less fortunate. Watch what they say and how they say it to those with few financial means.

A few times (too few, really) I've taken action to be generous according to this verse. Each time I've come away changed. I tell these stories to remind myself to be more generous more often - because it is good for me. Ironically, each time I share, I'm blessed; each time I give, I get.
  • While I was in grad school, I went to the grocery store. At the checkout line, the lady in front of me forgot her wallet at home. She left the items in the checkout line and went to call her family to bring some money. I knew she was poor from what she was buying and having to put back because it cost too much. When she stepped aside, I got $20 from my wallet and paid for her groceries and asked the cashier not to tell her. I paid for my own and left the store. That was over 25 years ago - it is still a fresh memory.
  • While on a trip overseas, I came across a family of four who are economic refugees. They travel (with two young children) from country to country looking for jobs. My heart aches for the kids who think this is normal and who don't have the opportunity to have a solid education so they can become professionals to break the economic cycle. My wife and I gave them about $50 (all the money we had on hand). That was last year - I pray they have found a home and a well-paying job, but I doubt it.
There have been many other occasions in the years in between. It is never about the amount of money, it is always, always, always about the attitude of the heart. Each time I have been generous is etched in my memory. Each time I have asked enough to know that the recipient is poor. Every single time I have been overwhelmed with the sense of what I ought to do. And every time I did the right thing, I have welled up with a feeling a gratitude that I was able to be generous. Yes, there have been times I have not been generous - and those are also etched in my memory and are embarassing to me. They are lessons to my heart, to always have the attitude of generosity.

I challenge you to be generous in your daily life. Every so often some opportunity will present itself and you'll have a choice - to be generous or to withhold a blessing. Believe me, it won't affect your wallet (it really won't), but it will affect your heart (not to mention the recipient). Be generous.

Lead On!

read: greedy, selfish, self-centered, miserly, stingy

Friday, October 5, 2012

Generosity Index

You need to know about the annual Generosity Index  which is an interesting measure (at least to us numbers geeks) of how generous people are. This link is to the 2011 publication of the 2009 tax data. The compilers gather data from the US Internal Revenue Service (Canada is in the survey but in this blog I'm referring only to the US). They gather data by state:
  • Total amount of income on all the tax docs filed
  • Total number of tax filers
  • Total number of tax filers that made a charitable contribution
  • Total amount given to charities
The data is sliced and diced in two primary ways: 1) percentage of total aggregate income given to charity and 2) amount of average charitable donation. Those two are merged to get the Generosity Index and then states are ranked by each of these.

It is interesting to see the number of tax filers in a specific state but we don't know if these donors gave $10 or $10,000 so I prefer to look at the percentage of income that is given to charities. That percentage is very telling about those who are inclined to be generous with their money. BTW, by far the largest recipient of charitable dollars are churches - no one else comes close.
  • The most generous state is Utah whose residents give an average of 3.09% of all their income to charities. The second is Georgia whose tax filers give away 1.85% of their collective income. There is a big drop from #1 to #2 and that is due to the Mormon emphasis on tithing.
  • The top ten most generous states are
    • 1. Utah
    • 2. Georgia
    • 3. Alabama
    • 4. Maryland
    • 5. South Carolina
    • 6. Idaho
    • 7. North Carolina
    • 8. Oklahoma
    • 9. Mississipp and New York (tie)
  • The top ten stingiest states are
    • 41. Ohio
    • 42. New Mexico
    • 43. Arkansas
    • 44. Hawaii
    • 45. Rhode Island
    • 46. West Virginia
    • 47. New Hampshire and Vermont (tie)
    • 49. Maine
    • 50. North Dakota
Generalizations are rarely correct but there are interesting patterns
  • Many of the most generous states are seen to be very religious (Utah & Idaho with Latter-Day Saints; Georgia, Alabama, South Carolina, North Carolina, Mississippi with Baptists and Methodists).
  • Many of the most generous states are seen as some of the poorest states
  • Many of the stingiest states are in the Northeast: Rhode Island, New Hampshire, Vermont, and Maine which is an area of the US that is considered less religious
  • Is there a correlation between faith and generosity - it would seem so (if we are looking broadly).
Years ago I read that research by Empty Tomb, Inc. showed some interesting statistics:
  • In 1932 the average Christian gave 3.2% of his or her income to the church. This is at the depth of the Depression, when people had less to give than ever before as a nation. It was a very, very tough time for the US.
  • Just before the economic collapse of 2008, the average Christian was giving 2.3% of his income to charity. During one of the most prosperous economic times in the US, Christians were more stingy than during the Great Depression. The figure of 2.3% has steadily dropped since, which means Christians are giving even less.
You can draw your own conclusions from this information. Here are mine:
  • More money does not make you more generous.
  • Generosity comes from the heart, not the wallet.
  • Being poor (a relative term in our country when we compare ourselves to other countries) means you understand better than others the importance of helping others.
  • A person's faith and religion plays a large role in his or her generosity.
Lead On!