Tuesday, November 27, 2012

Personnel Comp Letters

2013 Personnel Comp Letters
Every year, every employee of your organization or church should receive a personnel compensation letter. This letter is a summary of all that the church pays in order to have this person as an employee. There are several reasons for creating this letter each year:
  • It provides documentation for the employee for his/her own knowledge. Otherwise, some employees would never learn if they got a pay raise or not.
  • It provides documentation for the employee's personnel file in the finance office in case the auditor or Department of Labor investigator wants to see it.
  • It helps the employee to see what the "total cost" of him/her working at the church is. Many employees grumble because they're not paid enough. This document will show that while their wages may be lower than they want, the employer provides a significant number of additional benefits. The letter explains how much those benefits would cost the employee if he/she had to buy them personally.
The letters that I send out have the following format:
  • Previous Year Gross Salary Figure
  • Next Year Salary Increase
  • Next Year Gross Salary Figure
  • List of benefits with a brief description of each and how much they cost for that specific employee
    • Employer FICA/Medicare (many employers forget this but it is a cost of having an employee)
    • Retirement
    • Health insurance
    • HSA contribution by the employer
    • Dental insurance
    • Other insurances: life, long-term disability, short-term disability, workers' comp
  • Total Estimated Compensation (BTW, you should insert the word "estimated" or "anticipated" lest any employee leaving in the middle of the year demand to be paid the "Total Compensation" this letter might imply).
This is a time-consuming process. Each letter should be tailored to every individual. For instance, ordained ministers' letters will not contain the FICA paragraph, but non-ordained staff will have it; some classifications of ministers will have different benefits than other classes. Tailoring the letters helps the employee know exactly what his/her benefits are. Take the time to do this or have it done. It will help employees see themselves in a new light, and it will help the personnel committee of the church see the true cost of their staff.

Lead On!

Tuesday, November 20, 2012

5th Gift Letter

Every year a church should sent out gift letters (statements of contribution) five times a year. After each quarter AND the first week of December. That letter in early December may be a new thing to some church administrators, so let me explain why you should do it.

December is one of two times a year that people's giving is heightened by society (tax filing season in April is the other time). A professional fundraiser once told me that he needs to work only two times a year, April and December, because those are the times when people are most inclined to give.  The rest of the year he cultivates donors, and there are some good lessons in that for church administrators. Since people are already aware of the Christmas season of giving, leverage that awareness for the good of the church by sending out a statement of contribution.

Most people do not record during the year how much they've given to their church. They need reminders and a letter in early December is an easy way to let them know. Most people are not offended by such a letter, and a lot of people actually appreciate the reminder.

A gift letter in December pays for itself several times over. Yes, it costs money to send out the letter, but my experience is that the amount of money received is a lot more than it cost to send out the letter. Sending it out is very cost effective and beneficial to the church (and to the donor for tax purposes).

Send a gift letter out (with a cover letter) in early December and you won't regret it; it will help you get in some year-end gifts that you might otherwise have not received.

Lead On!

Wednesday, November 14, 2012

Gift Letters or Statements of Contribution

Gift letters (also knowing a statements of contribution) have several purposes:
  • To acknowledge and thank donors for their gifts
  • To ensure the church received the gifts and credited them to the correct fund
  • To give members a chance to see how much or how little they've given to their church
  • To provide an opportunity to the church to include a letter explaining to donors how their gifts were used and the people whose lives are being changed because of the generosity of the givers
  • To instill confidence by donors in the integrity of the church's Finance Office so they can see that the staff is handling gifts accurately
Gift letters should have all of the following elements:
  • Name and address of the church or 501(c)(3).
  • Logo of the organization would be great, too.
  • Tax Identification Number of the organization. This is known as a TIN; sometimes it is called an EIN or FEIN (Employer Identification Number or Federal Employer Id Number)
  • Name and address of giver
  • List of checks which includes
    • Date of gift
    • Form of gift - check number, cash, online, or other description of manner of gift
    • Amount of gift
    • Purpose of gift - was it for the ministry budget, building, missions, etc.
  • (Pledge - if you use pledges, they should be on the letter, too)
  • Total of all the gifts by category and grand total
  • Thank you sentence from the Finance Office and who to contact if there are any errors
  • Sentence required by the IRS for tax-deductible gifts. Here is the one I use:
    • For IRS purposes, I must inform you that the gifts contained in this letter are based on intangible religious benefits. You did not receive any goods or services from _____ Church for this contribution. Please keep this letter as documentation of your gift.
Every time you send out gift letters, you should be accomplishing all of the purposes listed above and your giving statements should have all of those elements. Anything less means you're not getting as much value as you could.

Maximize the impact of your gift letters by including a cover letter which has several additional elements:
  • Paragraph 1 - several sentences thanking people for their generosity (please use that term - it doesn't have any negative connotations and is viewed very positively by people; people like to be told they were generous)
  • Paragraphs 2, 3, and 4 - three brief stories that have happened at your church within the past 3 months where people were changed for the good because of what your church did, events that had an impact on children or youth such as a mission trip or Vacation Bible School, and/or activities that reached the community or world with the Good News of Christ. Tell stories - people remember stories; if parables were good enough for Jesus, they're good enough for you, too!
  • Paragraph 5 - conclude the letter with another acknowledgement of their gifts and generosity. Also, mention who and how they should contact if there is an error in the giving statement.
Finally, how should you send them: I like sending them out by email because it is free. Society has trained people that email is normal, so use what society has taught people. For people without an email you'll have to use snail mail. In a few instances, you'll have to use snail mail for some situations where people's giving needs to be kept confidential from another person in their home who has access to the family email - those are rare and sensitive, but you need to be aware of those. Snail mail costs about $1 for each letter (postage, envelope, paper, ink, and labor) whereas email costs just the labor (which you have to do anyway).

Lead On!

Tuesday, November 13, 2012

US Marines and Church

Recently I've visited several churches. I've noticed something in common about all of them, and it's something that is disconcerting for an organization whose primary purpose is to help people have a faith relationship with Jesus Christ. Here's my discovery:

Most churches are designed for themselves.

That's a pretty broad statement, so let me explain. I've been in church life and work my entire life. When I walk into a church building, I know how to slip in and find a seat without being noticed too much. I know what the program in the Sanctuary or worship center will be like and how long it will last. I know who the people "on stage" are even if I've never seen them before. I know all this because I've been in church for a very, very long time.

What about people who have never been to church or haven't been to church in a very, very long time. Are those people are going to overwhelmed by the physical layout of your buildings? Are they going to know when to sit, stand, and turn around during worship? Are they going to be offended or embarrassed by being asked to fill out a card or be recognized as a visitor? Are they going to feel under-dressed and uncomfortable?

Churches have one chance to get it right. When someone comes to visit, they're giving you one shot at making it so compelling and interesting that they'll want to come back the next week. You have one chance to do church so well that these guests will look forward to the next Sunday. One shot - just one.

Is that fair or right? No. Is it reality? Yes.

Think about the way you do church: is your Sunday morning programming crafted to appeal to newcomers or to make the long-timers feel comfortable? Unfortunately, in most churches, it's not what it should be. Even Jesus didn't go to the synagogue very often because, well, the synagogue of Jesus' time was very much like many churches are today: designed to make the religious feel good about themselves and not reach those who desperately need a faith relationship with God.

The U.S. Marines Rifle Drill Team is flat-out impressive. Watch a YouTube video of them. What they do is amazing. They are probably about as close to perfection as you can get; each and every time, they do it right. I haven't seen them in person yet, but I want to, and I know I'll be even more impressed.

I know churches run with volunteers led by church staff, so there is plenty of room for human error. But what I challenge churches to do is to be a LOT more intentional about what they do, how they do it, and what it looks like on Sunday morning. And by "it" I mean shaping almost everything about Sunday morning so that people you are trying to reach actually want to be there and aren't counting the minutes till they can leave without insulting you.

I don't expect churches to be perfectionists like the U.S. Marines, but I do expect churches to raise the bar. We've let our standards get pretty low, so it's time to raise them several notches. We should expect our staff and volunteers to be at the top of their game every Sunday, with every person. Challenge your leaders to make the Sunday morning experience one that makes everyone, guests and regulars, vital to their lives.

Now, go watch the U.S. Marines Rifle Drill Team (even the one where the rifle breaks in the middle of the drill!) and see what you can learn from a really good team that works seamlessly together.

Lead On!