New Income and Revenue for Churches

A brief audit of a client's receipts over the past year revealed something interesting: 22% of their income came from sources other than the primary source. The organization has diversified their approach to receiving income so that more than one in five dollars comes from a non-traditional source. This means that if their primary revenue streams remain the same, this organization will have 20% more money to use - woohoo!

This is a good lesson for churches: are you dependent on your mainstay revenue source (tithes and offerings) or have you begun to look at other revenue streams? Churches must be creative in getting money in the door and then very transparent in how it is spent and used. Here are 21 different revenue streams (the first 10 come from a list prepared by George Bullard and the rest are from me):

1. Tithes and Offerings
2. Special offerings
3. Designated gifts
4. Fee for Services
5. Capital Campaigns
6. Foundations of the Organization
7. In-kind resources and services from individuals and businesses
8. Sale of Products
9. Foundation grants
10. Investment Income
11. Rental Income
12. Event Registration
13. Cost Recovery
14. Business Partnerships
15. Offerings After Special Events
16. Sponsorships and Scholarships
17. Ownership of Facilities
18. Memorials and Memorial Gifts
19. Capital Investment Lists
20. High Capacity Donors
21. Gratitude Gifts
22. Alumni Gifts

For a fuller description of these, visit Free Resources at www.financeforchurches.org

 

Lead On!

Steve

 

www.financeforchurches.org

www.facebook.com/financeforchurches

churchfinancialleadership.blogspot.com

 

Church Staffs Just Wanna Have Fun

One of the many legends about Google as a work environment is the different places they created for their staffs to have fun. It's not just work at work, there is some fun involved, too - by design. The folks at Google (and tons of other companies) realize that employees need to have their brains stimulated in new and creative ways, the staff need to decompress even during the work day, and they need do things together so that they can bond and bind together as a team. Coming to work, doing just work, going home and then repeating that ad naseum creates a workplace that can lead to employee burnout.

Here's a solution for churches:

• Allocate $1,000 from your church budget to be spent $250 each quarter (feel free to allocate more, it just depends on the size of your staff)
• Divide your staff into four groups and assign each group a quarter of the year.
• Each group is tasked with finding something fun, creative, and new for the staff to do and they've got a budget of $250. It may cost a little more and then each staff person might have to chip in a couple of bucks, but try very, very hard to not make this an expense for the staff.
• Find one day each quarter when the church is closed for a "staff development day" (if you can only do a half day, that is okay, too)
• Then, close the church, put a volunteer on the switchboard, and go have fun. Once you do this a few times, it will begin to change the way the staff interacts with each other. They will recall fun times, goofs by each other and themselves, etc.
• This will create memories that are NOT church or work related. The staff will have something to talk about other than work. This will create a much healthier work environment.

Here are some suggestions:

• Bowling
• Painted pottery
• Movies
• Tour of a local historical site
• Team Hide & Seek in a mall
• Paintball
• Ropes course
• Kayaking or canoeing
• Frisbee golf
• Scavenger hunt
• Raking leaves for a shut-in
• Habitat for Humanity home build

You get the idea. Some of these ideas are free; some are not; all are beyond the walls of the church. Some are outside the comfort zone of a few staff; none are difficult; all are different.

Go have FUN with your staff!

Lead On!
Steve

www.financeforchurches.org
www.facebook.com/financeforchurches.org

Stop Charity & Benevolence

Charity: the voluntary giving of help, typically money, to those in need.
Benevolence: An inclination to perform kind, charitable acts

Too often people are charitable and benevolent because they a need and want to help meet that need. They give money to fight homelessness, hunger, poverty, illiteracy, illness, etc. All these gifts are well-intentioned - no one gives because they are mean-spirited.

However, I do wonder at the motivation of the gift. Some gifts are given in order to receive a tax write off. Some gifts are made in order to look good in the eyes of others. Some gifts are more personal because of a family member's situation.

To me, it seems that charity and benevolence is done from a desire to attack the cause of a condtion. Don't get me wrong, I don't like the causes of hunger, poverty, illiteracy, etc. any more than anyone else. I find them despicable and wish they were eliminated. However, I do wish that the reason people were generously-minded was from a philanthropic viewpoint.

Philanthropy: The effort or inclination to increase the well-being of humankind, as by charitable aid or donations (from the Greek: philo = love and anthropos = man)


Before you say this is "just semantics" and that philanthropy is the same as charity or benevolence, think about the motivation for giving. Philanthropy is done because you want to help a person whereas charity is cause-related. If benevolence is to fight homelessness, philanthropy seeks to work with "Mike" or "Susie" to find them a place to live and to address the situation that made Mike or Susie homeless in the first place. Charity is about giving left-over clothes or money so that an organization can do something to meet a need. Philanthropy is about you getting personally involved because you love people as individuals, not as causes or charities.

Jesus didn't come to be charitable or benevolent. Jesus came because He loves humanity and wanted to get personally involved in our situation, to get his hand dirty in our mess, and to face us in the muck and mire in which we had gotten ourselves. This was about human love.

Here is another way to categorize charity versus philanthropy. It comes from the 12th century Jewish philosopher Maimonides who wrote the Eight Levels of Giving:

1. A man gives, but is glum when he gives. This is the lowest degree of all.
2. A man gives with a cheerful countenance, but gives less than he should.
3. A man gives, but only when asked by the poor.
4. A man gives without having to be asked, but gives directly to the poor who know therefore to whom they are indebted, and he, too, knows whom he has benefited.
5. A man places his donation in a certain place and then turns his back so that he does not know which of the poor he has benefited, but the poor man knows to whom he is indebted.
6. A man throws the money into the house of a poor man. The poor man does not know to whom he is indebted, but the donor knows whom he has benefited.
7. A man contributes anonymously to the charity fund that is then distributed to the poor. Here the poor man does not know to whom he is indebted, neither does the donor know whom he has benefited.
8. Highest of all is when money is given to prevent another from becoming poor, as by providing him with a job or by lending him money to tide him over a difficult period. There is no charity greater than this becasue it prevents poverty in the first instance.

Lead On!
Steve

Tips for Working with Grant-Making Foundations

• They don't want to support salaries of employees or operations; they want to give money for programming. Their true goal is to help with the programming - the part of a non-profit that is making a difference in the people it serves. One way to accomplish both is to prove how a person is so connected to a specific program that there is a symbiotic and synergistic relationship.
• They give money to organizations that are working and collaborating with other orgs to accomplish the purpose. Grant-makers don't like to have multiple non-profits all trying to do the same thing but who won't work with each other. They feel that is not a wise use of resources.
• They like organizations that have broad support from donors, not a narrow group. Mkae sure that you are tapping the widest possible group of potential contributors.
• They are made up of people, of very caring people who want to do the most good with the resources they have. They all have restraints but I can tell you from personal experience all grant-makers want to give away far more than they are permitted to give.
• Appeal to the generosity and humanity of the grant-makers. Get to know them as people and make sure they know you, not just your mission. Don't be just a report they read, be a person and a face they relate to.
• Ask them who else you can talk to. Not only do grant-makers know the local non-profits, they are usually well acquainted with many high-capacity donors. These donors may have additional financial resources they'd like to give away but do not know of a worthy opportunity. The grant-makers know the passions of these high-net-worth individuals and they might be willing to serve as a conduit for you to access these generous people.

Lead On!
Steve

Community Foundations

• Every major city has a community foundation which is where people have given money, to be held in trust, until the donor or the board of directors distributes grants. Some CFs are very, very large (think billions of dollars investments) and some are small. All are legally required to give money away.
• For two years I worked as the CFO of a community foundation. Nothing gave the staff and board more pleasure than giving away money. It was so much fun to see the faces, hear the stories, and dream about how much more could be done for the region.
• CFs have major classifications for grant-making:
• donor advised funds (DAFs) - the donor recommends to the CF which non-profit should receive a grant and how much the grant should be
• field of interest funds - the board gives money to organizations which meet the donor's criteria when the fund was established such as literacy, health, etc.
• unrestricted - funds which the board gets to distribute according to their wishes and the grant requests which are received by the staff
• CFs are in the business of helping local non-profits - most CFs have a geographical restriction - and improving the quality of life in their community. They are tied to their community - the staff and board shop in the same stores as you do, worship in the same churches, attend the same movies and theaters, etc. These people know what is going on in their city and they want to make it a better place.
• Many churches have high net worth individuals who already have DAFs with the local CF. Churches would be well-advised to meet with their local CF staff to get to know them, to be known, to educate the CF of what the church wants to do, and seek ways to partner together.
• A church can also work with the people who already have DAFs to educate the church leadership about how the church can work with other high-net-worth individuals (whether they are members or not) to accomplish what the church wants to do.
• CFs are experts on all local non-profits. If your church wants to do something, meet with the CF staff to learn about other non-profits with which the church can partner to accomplish far more than each can do separately.

Lead On!

Steve

Guidestar.org

• Guidestar is an online non-profit company with one purpose. It publishes the Form 990 that most non-profits are required to submit to the IRS each year.
• A 990 is a legal doc which states the total expenses and income for a non-profit. It breaks the expenses down into sub-categories and even lists the salaries of the five highest paid employees and their benefits. The 990 also shows the various sources of revenue for a non-profit from programming receipts to investment income. Finally, a 990 lists all recipients for organizations who grants from the non-profit whether these were small gifts or very, very large ones. All 990s on Guidestar are in PDF format so they can be downloaded and/or printed for further analysis.
• Guidestar has a cool tool which enables people to search the hundreds of thousands of non-profits for any category which interests you. This makes finding your specific field of interest that much easier.
• For example: your church is working with nearby elementary schools and wants to find money to expand a literacy program. A Guidestar search on "children's literacy foundation" shows over 150 non-profits which have literacy as one of their interests. Not all of them write grants so further research is required. This is time-consuming but eventually you'll find a dozen or so foundations to which you will write a compelling grant proposal/request. You may not get much or as much money you want/need the first time you ask, but be persistent and over time you'll develop relationships with the foundations that will open some doors.
• Use Guidestar as a research tool to find local and national foundations which can provide additional resources for your efforts.

Lead On!
Steve

Sloppy Church

My guess is that when you go to a fast food restaurant, you look for a clean or mostly clean table at which to eat. I avoid tables that are piled with stuff from a previous customer that wasn't considerate enough to put his trash away. I appreciate when the staff comes out to wipe down tables so they are clean for the next customer.

That is true for churches, too. Churches should be clean and free of clutter. We don't need last week's bulletins scattered everywhere, or every flat surface piled with flyers and postcards about upcoming events. We don't need Bibles and study guides in stacks on ledges, tables, and chairs in classrooms. I've seen rooms with tables and chairs tossed around as if no one cared about the room and what it looked like. I've seen members walk right past trash on the floor; actually, they looked at it and probably thought that was someone else's responsibility to clean up. I could go on and on, but you've likely seen the same thing in your own church or in one you've visited.

Bottom line: if a place of business were as sloppy and messy as many churches are, you wouldn't give them your business. Why then are churches so sloppy?

• Is it that no one really sees it? Yes, there are some people who see messes and some who just don't. I'm one of the first group. I see messes, and they bother me a lot. Here's a way to know what group you're in: look in your car. If you have empty drink cups, wrappers, and other trash on the seat or floor, you're in the group that can't see messes. If that's the case, you ought to find someone with a really clean car and get them to point out to you the messes in your church. They'll show you what you "can't see."
• People think someone else is responsible for that. Some members actually believe that they pay staff to do those menial chores and that they should not have to stoop to pick up trash or straighten bookshelves or ask why there are old books and Sunday School quarterlies which make the church look bad. Keeping the church clean and straight should be everyone's responsibility; not just the custodian's job.
• Do some people not even care? Unfortunately, yes. It's not a large number of people, but some just don't really care or appreciate how a church looks. That kind of problem requires a bigger solution than just becoming aware of how sloppy the church looks; those folks need to experience a change of heart so they'll value their church and its property.

Next time you're in church, look around with really open eyes. Check out your surroundings very intentionally. If it were a restaurant, would you eat there, or go to the next restaurant down the road? Guests and members appreciate cleanliness and orderliness, and you do too. Make it a point to help your fellow members understand how little things such as picking up old bulletins, straightening tables and chairs, not having piles of materials everywhere, and other things like that can have a positive effect on people--members and guests alike.

Lead On!
Steve

Star Trek & Star Wars

Pick one of those two space sagas - I don't care which one, choose your favorite. Okay, now, name the seven major (good) characters in each one:

Star Trek

1. Kirk
2. Spock
3. Sulu
4. Chekov
5. Scotty
6. Uhura
7. Bones

Star Wars

1. Luke
2. Han Solo
3. Leia
4. Obi-wan Kenobi
5. Chewbacca
6. C3PO
7. R2D2

You may not be a fan of one or the other; you may not like either series. There are a few similarities and many, many differences between these two groups of characters but let me focus on one in particular as it applies to churches and their leadership: #6 in each list.

• Uhura is more than the sex appeal for Star Trek, she's the communications officer. She is on the bridge, sitting just behind the captain and ready to carry out his orders but also making suggestions based on her experience and knowledge of language and culture.
• C3PO is the golden robot and comic appeal in Star Wars. He is also conversant in "more than 6 million forms of communication." He talks non-stop to everyone especially his buddy and fellow robot R2D2.

Both are utterly critical to the success of each mission. Uhura and C3PO ensure that the message from the leader is spoken clearly and without misunderstanding (well, C3PO does mess up a few times) so that the story is moved along and that everyone knows what is going on.

Transition: who is the communications person in your church? Are you like most churches, relying on the pastor who is already doing everything else (preparing sermons, marrying, burying, counseling, helping members, leading staff, going to meetings, etc.)? Or are you intentional about using someone who is gifted in this area to take the message from the leadership and craft it in a multitude of forms so that the message is transmitted to everyone in every way possible? That person may not know six million forms of communication, but he or she is probably more knowledgeable than the pastor about how to disseminate the message.

Churches need to have a clear, consistent, comprehensive, and cohesive communications cohort. The pastor and other leaders must develop the message in a succinct manner. Then, they must work with and trust the communications specialist to send the message out in every way possible to the broadest possible audience.

The audience will see, hear, and read it in multiple ways. Marketing experts say that it takes a person seven views before the person will internalize a message. Communications people love the challenge of finding ways to tell things; most non-communications get weak-kneed at the idea of telling the same thing seven different times.

Even Hollywood recognizes the importance of communications in a leadership group. How much more should the church recognize the importance of communications since the church has the greatest message in the world? How intentional is your church in its communications? And what do you need to do to be more intentional about it?

Lead On!
Steve

How to Calculate a Church Budget

Every church I've worked with has struggled with determining the amount at which to set the subsequent year's budget. Everyone wants to increase the budget in order to provide more funds for staffing and programming (rarely for building needs, but that is another matter). But Finance Committees know that even if they put a figure out there, it means little if the income/receipts/revenues don't come in to support that budget target. Committees want to step out in faith, but they also don't want to be caught overstepping (and dropping into a financial void). So, what's a church Finance Committee to do?

Here's my idea:

• In the month that you set the budget for the next year, look back 12 months and calculate how much money came in during that period. That figure is your budget for the next year.
• For instance: 
• Your fiscal year is the calendar year
• In July and August, ministry areas work on their respective budgets with a deadline to get their requests to the Finance Committee by August 31
• The Finance Committee gathers all the data to finalize the budget by September 30 so that it can be voted on in October
• At their July meeting, the Finance Committee looks at the total undesignated receipts for July 1 through June 30 (the previous 12 months). That figure is the new budget for the fiscal year that starts in January (six months away).
• Whatever that increase (or decrease) is over the current fiscal year, that percentage (up or down) is communicated to all the ministry areas as to how much they can increase (or decrease their budget.

This has many benefits:

• This is a conservative or fiscally prudent way of budgeting - churches should receive at least that amount in the next 12 months, perhaps a good deal more.
• This means that you shouldn't have to go into spending freezes and hurt the morale of the staff and church
• This enables the church to continue to plan well for its ministries and not feel it is over-reaching financially
• If more money comes in than was budgeted, the extra money can be used for capital needs, rainy-day or reserve fund(s), money for unforeseen opportunities, additional money for budgets that were shorted, etc.

This process makes short work out of deciding how much you'll budget for the next year. That will enable the Finance Committee to focus on more important things such as assisting ministers, ministries, and members with good stewardship practices.

Lead On!
Steve

Saying Thanks!

Here is a link to a good article about thanking your donors. Thanking, explaining, sharing stories, and helping others know what is going on in your church is vital to your church's finances. People liked to be thanked - please do it often and use as many platforms as you possibly can:

• Personal letters
• Articles in the church bulletin
• Social media
• Webpage
• Hallway conversations

If you make this part of your daily attitude, that same attitude of gratitude will flow into your staff and your church members. After all, it is well known that every organization takes on the attitude of the top dog. So, be grateful, tell others thanks, and encourage everyone to follow your lead.


http://www.guidestar.org/rxa/news/articles/2012/9-clever-ways-to-thank-donors.aspx

1. Write a Greeting Card, Not a Business Letter
2. Share Recent Progress, However Small
3. Add an Invitation—But Not to Something That Requires Another Donation!
4. Use a More Creative, Personal Opening
5. Include Results-Oriented Photography
6. Record a Video Message
7. Send a Postcard from Behind the Scenes
8. Be Specific about How the Gift Is Being Used
9. Change Who's Saying Thank You   Lead On! Steve