Church Credit Cards

I think church-issued credit cards are unnecessary except in special situations (more on that later). I really am against the issuing of church credit cards and here's why:

• they lead to more work by a staff person, usually an administrative assistant to manage all the cards and track the receipts
• they lead to expense since some staff will buy things more quickly than if they were using their own card
• they lead to abuse by some staff (dealing with that is a personnel committee matter not a finance committee issue)
• they are seen as a right and status symbol when they are neither

Here are my recommendations regarding church credit cards:

• Staff should use their own personal credit cards when making purchases for the church. Then, the staff person should turn in a receipt and get reimbursed for that expense just like he or she would for mileage or any other purchase. This incentivizes the staff person to get the receipt and turn in the receipt in a timely manner. This addresses the single biggest issue regarding church credit cards - staff members who do not turn in receipts when asked for them and that causes problems for the church's Finance Office.
• A way for staff to deal with this in a positive manner for them is to get a card with rewards points and then use that card only for church purchases. Write on the card "church use only" so you don't get confused. When the bill comes in, turn in the statement and all the receipts requesting that the check be made payable to the credit card company (not to the staff person). At the end of the year, the staff person earns points which he or she can keep.
• A church may want to have ONLY ONE church card in the office and that is for use by the administrative assistant when he or she is buying things online (from Amazon.com or an airline ticket or paying a conference fee). This card should not be used by one of the ministers - they can use their own card - and the invoice must immediately be sent to the church's Finance Office as soon as it is received by email.

There is one and only one exception that I can think of and it is not very good. If a staff person needs a credit card for church work but cannot get one because his or her own credit is poor, then the church can intervene and get one. But, there is a big, huge red flag - if that person's credit is that poor, there is a reason for that and do you really want someone with bad credit handling a church credit card? Think twice about that.

I know church credit cards can be positive. In the past two years I've gotten three (3) iPads for church staff using rewards points. But I also know that when you get credit cards, someone on staff will spend hours reconciling all the receipts to the card statements and entering the payment data. That is a lot of extra time that could be used more productively elsewhere in the church.

So, if you ignore my advice and do get church credit cards, you need to have a contract with the cardholders. This contract needs to be authorized and approved by the church's Finance Committee, signed by the staff person, and placed in the employee's personnel file in the Finance Office. This contract should have a "three strikes" provision: if someone with a church-issued card does not turn in his or her paperwork in a timely fashion (when requested by the Finance Office), then after the third event the card will be revoked for a specific time period (usually 3 or 6 months, sometimes indefinitely until the person appears before the Finance Committee or even the Personnel Committee).

The bottom line for me is about being good stewards of the church's resources. A credit card is a privilege, not a right and staff people need to earn it, not expect it.

Lead On!
Steve

RACI

A friend and colleague of mine gave me an acronym that is used in his church whenever a decision is made. They assign RACI to actions and I like this so much I want to share it as a tool to help church staffs. RACI stands for:

• Responsible
• This person is in charge of the activity. All subsequent decisions go through this person to ensure that everything is working together to meet the desired outcome. This person can delegate intermediate steps but in the end, the buck stops with this person regarding the entire project. The responsible person must also have the trust and authorization to carry out the duties assigned to him or her. Anything less will set that person up for failure and perhaps even his or her departure from the church.
• Accountable
• This person is accountable for his or her actions (or inactions) and that accountability will affect his or her annual evaluation. An accountable person may or may be in charge of one aspect of the project or may be the responsible person, also. The accountable person must have the resources to carry out the task assigned to him or her whether those resources are financial, time, knowledge, or people. Accountable people need to know to whom they are accountable - that must be deicded initially; it is frequently the person who is responsible for everything.
• Consulted
• This is a person or group of people who have information which can help move the project further along the road. This may be specialized persons (lawyer, architect, teacher, pastor) but they are not part of the decision-making process. Their value is in providing additional knowledge which will help others who are decision-makers. Information is always a two-way street in the section: those who are consulted, by definition, should provide feedback to ensure the proper information is getting to the responsible or accountable person(s).
• Informed
• These are people who should be told what is happening along the way. This may be a person (such as the pastor or other leader) or a group of people (such as the congregation or key committee). They are not necessarily part of the decision-making process but keeping them informed can help the decisions go faster and easier. Information is usually one-way but sometimes it can flow back if it will help.

Sometimes these four are mixed and matched. For instance, someone who is consulted may also be a accountable. Sometimes you don't have all four - one of the above may be omitted if it is not appropriate or unnecessary.

Use this terminology to ensure that everyone understands and knows their role in the decision-making process. Keeping this clear will help people know what they are supposed to do and what they should not do. It can minimize conflicts ("eliminate" is probably too much wishful thinking). Use this tool to help you become a more efficient and effective staff - and one that communicates better with each other.

Lead On!
Steve

Church Violence and Death

Although this blog is posted after the tragedy at Sandy Hook Elementary School, it was written before then. All the info is relevant to schools and churches. Please guard well what God loves.

Every week there is a news report of violence in churches or church-related facilities (camps, retreat centers, etc.). A lot of them end in violence and death.

http://crimeblog.dallasnews.com/2012/10/pastor-slain-suspect-dies-after-attack-at-forest-hill-church.html/

About 20 years ago shootings in schools raised awareness that schools were no longer the safe places that everyone felt them to be. Those acts of violence burst the bubble that schools and churches were places of peace and serenity. Both bubbles are now shattered. There is no truly safe public place (except maybe a fire or police station).

For churches and staffs struggling to educate people as to why safety cameras, check-in points, child safety measures, and other preventive actions are needed, the news has way too many stories. Use these stories to inform and show people why a well thought-out, coordinated plan is needed and helpful (and even attractive to young parents). Never use news of church violence to alarm or scare people - that is not helpful at all.

Carl Chinn (www.carlchinn.com) has collected every news article of church related violence since 1999. It is a wealth of information - Carl is doing all of us a great service. I've never met Carl and I've only emailed him once - but his heart is in helping churches be informed about what is happening. Then, what churches do with that information is up to them but hopefully they'll take positive action to ensure their houses of worship are also sanctuaries.

If you want more information, contact Carl - I'm sure he'll help you.

Lead On!
Steve

The Church Lobby

Your church lobby tells new people in about 3 seconds the kind of people that your church wants to have. Okay, maybe just 2 seconds. It is really, really, really fast and most churches do not even know what they're doing.

I walked into one church and this is what I saw:

• Faded, worn out mauve carpet that "died" several years ago
• Furniture that I last saw in my 80 year old aunt's house - and she died 25 years ago
• Bare walls on one side and pictures of old stuff on the wall
• A chandelier

I looked around to see if it was a church or funeral home - everything told me I was in a funeral parlor or at least a place that my great Aunt Clara (born circa 1900) would enjoy. It was like a museum - okay, you get the picture. It was not a drawing card for 20- and 30-somethings. It was not even attractive to anyone under 60 - but most people had seen it for so long that they felt it was just part of the church. But anyone who was new to the church and walked in there was immediately turned off by what they saw.

Tomorrow morning - walk into your church lobby and look at it as you never have before. Look at the lighting, the walls and what is hanging on the walls. Talk with people about the furniture and ask them if that is something they would see in a home of a young family (presuming that family had some money to buy furniture they like).

Then, ask yourself if the kind of lobby that you have is representative of the age bracket of the people you want to attend. Or was the furniture put in there by an older generation because that is what they're comfortable with? Be intentional about your lobby - it is one of the first impressions people will have about you. Make it a good one, a positive one that will make you look good. Spend some money; recruit some young women or men to be the interior decorators for that area (and then tell them to take on your bride's room if you have one and update it!); AND then, in about 10 years, do it all again with yet new furniture.

Every time you update your look, you directly affect the age of people that come (and come back) to your church.

Lead On!
Steve

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!
Steve

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!
Steve

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!
Steve

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!

Steve

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!
Steve

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

 Permanently

• 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!

Steve

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!
Steve



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

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!
Steve

EveryTHING Ends Up in the Trash

I have two kids: a teenager and a preteen. One of the lessons that I, as a parent, am trying to teach them is the lack of value of possessions. My wife are not wealthy, but we are blessed financially and can use our money to give our kids lots of things. However, we know that everyTHING we give our kids will end up in a landfill as trash. No exceptions - even our house will end up there at some point.

There is one thing that we can give our kids that will never end up in the trash: memories. Memories will last a lifetime. Memories are stories and when coupled with pictures, they are powerful reminders of days gone by. Those bygone days (like today) are not perfect, but they hold their value better than most possessions.

So a couple of years ago, we began carrying out what we feel is a much better investment of our money: going on trips in the US and internationally. We drove from our home in Virginia to Oklahoma for a family wedding and on the way back, we visited Ft. Worth, Oklahoma City, St. Louis, Louisville, Mammoth Cave, and other sights on the way. Last year we took a trip to Spain and visited Madrid, Granada, and Sevilla. We're already dreaming and planning more trips across the US and to Europe (our preferred international destination).

These trips are fun (my kids are great travelers), instructional and educational (they've visited the Gateway Arch and the Alhambra, learning about culture and architecture), and priceless bonding time (my kids get to see their parents in a different light in a different venue). My wife and I want to continue traveling as often as we can; we are blessed financially to be able to do this, and (more importantly) we consider it one of the best things we can do for our kids. Travel and memories are certainly better and longer lasting than a video game or clothes.

To etch these memories in our collective memory, my wife does something wonderful at the end of each year and special trip. She uses an online publisher to create a picture book. These picture or memory books are easy to do, relatively inexpensive, and they will be wonderful to look at years later.

I don't want to tell anyone how to spend their money. I will suggest you consider how you're investing your money in your kids and in the future. Are you putting it into assets that will wither up, break, and end up in the trash? Or are you putting your money in priceless, precious memories which involve spending time with your kids? You don't have to travel (that is our choice and we're grateful we can do that), but you do have to set aside time to be with your family.

Invest yourself in the future—in memories made with your kids and your family. You'll never regret it.

Lead On!
Steve

Using Church Money Wisely

“Bring the whole tithe into the storehouse, so that there may be food in My house, and test Me now in this,” says the Lord of hosts, “if I will not open for you the windows of heaven and pour out for you a blessing until it overflows. Malachi 3:10
Your congregation knows that the money they tithe to the church has several positive effects. First, it allows you, the church leader, to bless others, pay bills, maintain the church building or purchase items for the church. Additionally, your church members know that when they obey God and give to the church, the Lord will continue to bless them in return, according to His will.
Church members know that tithing is not only used as a blessing to the church leaders, but a blessing to the congregation and community as well. Just as we are to manage our personal finances wisely, church leaders must abstain from careless or unnecessary spending and make intelligent purchases for the church when necessary.
As a leader in the church, your members often look to you for leadership and guidance; if they see that the leaders of the church are spending their hard-earned money on extravagant items that are impractical for the church, one of two things will happen. They will either think that it’s in their own best interest to spend their own money frivolously, thinking that it’s more important to have finer things, or they will become frustrated or angry that their tithes were spent on superfluous or showy items.
Most churches must present any major purchases to a committee for approval beforehand. Although this process may seem tedious and trivial at times, these groups are in place to help you make wise purchasing decisions and avoid rash spending that could upset – or even anger—other members of your church. And when you are faced with gargantuan financial decisions, such as building an addition to your church because of growth in attendance, consulting with members of your building committee can be a tremendous blessing.
Another major purchase that churches must face from time to time is that of church furnishings. Chairs and carpet become worn, pulpit furniture becomes outdated and baptisteries need to be replaced. Or perhaps your church has expanded and grown out of its current furnishings. When your church is in need of new church furniture, don’t be afraid to shop around. Ask other leaders and members in the church if they have any suggestions or if they have a church furniture store in mind that they can recommend. Compare prices and quality before committing to purchase a specific chair, pulpit or baptistery. Remember that the cheapest piece of furniture on the market might not be the wisest decision, especially when you could have paid a little bit more for something that would last twice as long.
As leaders in the church, we must remember that it’s okay – and even encouraged – to lean on others for guidance, strength and wisdom in our roles. And when we can’t find these things in our fellow man, we always have our Lord and Savior to point us in the right direction.
Tina Pashley is a writer and church consultant for Gabriel Services and Church Furniture Store in Rocky Mount, Virginia.

Thanks to Tina for writing this guest blog.

Lead On!
Steve

Choices

Have you noticed? Young people today just don't have the same level of commitment to church as their parents and grandparents! They have no loyalty. They have no deep roots. They don't believe and support the one thing that their ancestors did - that bedrock commitment to their church. They really don't value investing themselves in a church, planting seeds into that faith community, and paying it forward to the next generation.

(Okay, this is where I insert a disclaimer to say this is not true but a massive generalization - please read on)

Of course they don't.

They don't because their parents and grandparents - the same ones who voice many, if not most, of those complaints above - taught them they don't have to have commitment to anything. I'm not blaming anyone, I'm just pointing out how this past two generations have been brought up by their parents.

Choices.

That is one of the hallmarks of capitalism and one of the benchmarks on which this nation is built financially. You, the consumer, get to pick and choose.

So, flashback to your childhood and remember when you sat in the grocery cart as your mom turned the corner and enter Wonderland - the cereal aisle. Mom slowly pushed the cart and you began saying (or if you couldn't speak, you'd scream) what cereals you wanted. Mom ended up buying 2, 3, or even 4 different kinds of cereal because she knew you would switch every few days. And Mom didn't stick just to Kellogg's  brands, she'd even get General Mills or even the occasional off brand (which Dad usually ended up eating or maybe you gave it to the dog!).

Sure enough, over the next couple of weeks you'd have Cheerios for a few days, then switch to Fruit Loops, and then jump over to Sugar Smacks, circle back to Cheerios and finally you'd say you were tired of all those but you'd seen a new cereal on TV and you wanted to try that one so Mom might as well throw away all of the others and just go get the new one.

Kids learned that they can switch cereals on a whim. But also soft drinks, clothes brands, fast food chains, and any other consumer product out there. As an adult, we switch loyalties with car manufacturers (even though grandfather was a Ford or Chrysler or Chevy buyer) and even neighborhoods - I know of people who will move every few years when they grow tired of their home. Young people do the same with jobs. 20-somethings today will switch careers 7-10 times in their work life - that means that they will change job every 3-7 years.

Anyone who has been a child in the past 65 years (since WWII) has been raised in a culture of choices where they are in charge of making those choices.

So why do long-timers in the church get all upset when their kids and grandkids jump from one church to a different church to no-church and over to a church of a different denomination or no denomination. After all, it's what we taught them: "you don't have to accept what is in front of you," and "you have the power to change your circumstances and surroundings so do it."

Church-hopping today doesn't happen for only the same reasons as before. I think that our grandparents jumped to another church because of something that happened and caused them to leave. They take that frame of reference and apply to their kids or grandkids.

I think there are a multitude of reasons why people today leave church.

• They don't like the programming or staffing
• A friend invited them to go to another church
• They want to experience and experiment with a different church
• They're looking for a church with values that they have (at the present time)
• They want a church that will be good for their kids even if there is nothing for the adults
• They're seeking a church that is strong in one area of ministry or cause which they identify with
• They've had a conflict with a lay member or staff leader
• Or any of hundred other reasons

So what is a church to do. How do you address the issue of church hopping in your church? The number of responses is equal to the number of problems but here are a few prime answers

• Do nothing - just accept that people will come and go through your church. Don't change anything and realize that the back door is just as wide as the front door and that many people will use both and a few core people will stay and help run things.
• Focus on a few core principles that guide your church and which in turn limit the number of ministries you do and then do those few ministries extremely well. That means the people who do come will be inculcated into your few ministries.
• Provide a variety of ministries so that you're trying to do lots of different things. This is what many churches do - focus on nothing and aim at everything. It works for a while but frankly it dilutes the power and ministry and energy of a church to focus on nothing and try to do everything.
• Have a few compelling environments which attract people and make them stick to your church. These compelling environments will attract like-minded people so long as it remains a high-level of quality. This is simliar to #2 but that is focused on ministries and this point is on people-groups.
•  Have several different worship styles within the same facility. That means building several worship centers or doing quick-changes; it also means a bigger staff. But the hope is that you can be a church where people can flit between worship and education venues all the while hearing the same message in a variety of methods.

OR, change the point of view of the people coming to church. That is MUCH harder to do. You see, everything I wrote above sees people coming to church as consumers. They aren't. And church leaders should stop treating members as consumer. Church attendees are to be givers - of their time, their talents, and their financial treasure. They are to be GENEROUS!

When you attend a wedding, you are not a consumer. You are there at the invitation of the bride or groom; you didn't just crash it. And the wedding is NOT about you - it's about the bride (sorry, grooms!). You are a participant - there to enjoy the party and to help celebrate a special day.

Worship is NEVER about the people inside the church. People are there at God's invitation (and we have no right to turn anyone - anyone! - away). Everyone must be there with the right motivation - not "to get something out of it" but to celebrate God and the life we've been given and in turn give away anything and everything we can to help others.

Yeah, changing members in a consumer-oriented culture into reverse-consumer (generous givers!) is not easy. But God doesn't do easy (or else he'd wipe us off the map - LOL) and God certainly isn't a consumer-God.

God does love and giving and celebrating and joy. We should and can and must, also.

Lead On!
Steve

Benevolence Gifts

A friend asked me what the IRS rules are regarding benevolence gifts to help people. I mean, if someone is in really, really dire straits, don't they get an exemption from having any tax consequences if they get some money from a church? In short, NO!

• Payments made to an individual are considered taxable income - regardless of the reason. BTW, the IRS doesn't care what you call it - love gift, honorarium, salary, bonus, wages, stipend, gift card, etc. - to them it is all income, pure and simple, and is thus taxable as income.
• If you pay someone $600 or more in a calendar year, then you must provide a 1099 UNLESS that is documented as a reimbursable expense such as mileage, travel, program expense, etc., etc. That means that all gifts and fees for services are considered taxable income. It doesn't matter how serious the need is by the person or family. If you give them $600 or more in cash, it is taxable income to them.
• The only way around this is to make a payment on someone's behalf to another organization. This includes paying someone's mortgage, rent, utilities, car repair, medical bill, etc. The church gets the invoice from the organization and pays it directly. The money never goes through the hands of the individual - it goes from one institution to another institution, just like any other accounts payable paid by the church.
• The IRS is concerned that all benevolent funds be under the authority and control of the tax-exempt organization and that the church not be used as a conduit for personal purposes or gain. Thus, you cannot give money to your family or anyone else by "running it through the church" or you'll jeopardize the church's tax-exempt status.

Lead On!
Steve

Building Costs

An article a few months in a facilities magazine reflected that the true cost of building in not in the architect's fees, furnishings, or even in the actual construction of the building. The article stipulated that over 80% of costs of a building are in the maintenance and operations of the structure.

Say a building has a lifespan of 50 years. The first year the building is built. The next 49 years the building is used for its purposes. Over the course of the 49 years, the cost of the utilities, maintenance, repairs, improvements, alterations, etc. will cost at least four (4) times as much as the initial construction done in year one. That operations cost (the one over the 49 years) does not include the cost of any personnel associated with that structure: custodians, employees, technicians, etc.

Before (BEFORE) you build a building, look at your budget and your future revenue streams. Does your budget have the financial margin to grow and absorb the cost of a new building. Can you afford the additional utilities and maintenance costs? How will you pay for new heavy equipment and major repairs (e.g., HVAC or a new roof) over the next few decades? (By the way, if you set aside funds 10% of the original building cost into a reserve account to cover those costs, you'll have enough to cover all major repair costs over the life of that building.) Is your budget healthy enough to add staff to take care of the buildings over its lifespan and ministers to put on programming in that building? Ask these questions ahead of time - you won't regret it.

Also, before you build, think creatively as to why you're building. There are some opportunities that if a church is willing to think outside the box, you can leverage a lot of resources. Here are a couple of examples:

• One church wanted to build a parking deck. Members of a Sunday School class knew that the city also wanted to build a parking deck in that area of town. The city and church worked together - the church provided the land and the city paid for the construction and they got a win/win. The church gets a parking lot it uses for free each Sunday and it didn't have to pay for the construction; the city got the parking it needed but it didn't have to buy the land.
• A church wants to build a recreation center. What if the church worked with a local fitness center: the church offers the land and the fitness center builds the facilities? Church members can use the center for free and the church then has people right next door who may have never gotten near a church - a mission field right next door. And the church didn't have to find $5 million to build a center and then $200,000 a year to staff the facility.
• The same could be done with a daycare - collaborate with a respectable day care center to use church faciliites for the benefit of the church, the center, and the community.

Think long-term and think creatively.
Lead On!
Steve

What Hasn't Changed?

My missionary/pastor father was born in 1928. I distinctly remember going on vacations where he wore a coat and tie every day - of vacation! That's who he was and the generation of which he was a part. He went to church every time the doors were open, even when he wasn't the pastor of the church.

It's been 32 years since he died. And times have changed - dramatically. My children don't go to church in "Sunday go to meeting" clothes. They wear what they wear to school - shorts, flip-flops, shirts (we usually do require a solid color shirt, not a logo shirt).

What else has changed in church from 30, 40, or 50 years ago? Actually, EVERYTHING!

• The music we sing to
• The instrumentalists
• The "hymnals"
• The pews
• What people wear
• The Bibles people bring (mine is on my iPhone)
• How people learn (in the middle of a Bible study, someone will pull up a doc from the internet)
• The "Sunday School quarterlies"
• Mission trips
• How we do missions
• How members support their church financially (electronic offerings are increasingly the norm)
• etc., etc.

I can't think of a single area of church-life which has remained stagnant in the past 30 years (except maybe the sermon!).

Okay, now think 30 years from now to the year 2042. If you think we've had a lot of change in the past 30 years, it's going to be increasingly exponential change in the next 30. That leads me to ask:

Are you being intentional in preparing your church for upcoming changes? OR Are you just going to let the changes happen to you?

Change will happen - you can't stop time, don't even try. But you can get ready for change. I'm not saying you have to embrace every change that comes along, but you don't have to fight every change either. Pick and choose your battles (the best piece of advice my mom ever gave me!) - learn what changes your church should adopt and adapt to. If you resist change, your church might end up with closed doors. Your church will be stronger in the long run by developing a healthy attitude to change.

Lead On!
Steve

Generous Living

• My daughter participated in Relay for Life a few weeks ago. This event is put on by the American Cancer Society to raise funds for cancer research.
• Last week, my church had a yardsale to raise money for youth to go on a mission trip.
• A couple of months ago a friend participated in St. Baldricks - an event during which people will shave their heads to raise money for cancer research.
• Every time I go to Starbucks, they give me the opportunity to buy a mosquito net for $10 for give a few dollars for some cause.

Every week I'm given the opportunity to be generous - to give a few dollars to people or a cause that is worthy of financial support. There are countless ones that don't deserve your money or time - it is up to the donor to do his/her due diligence to ensure that the cause is worthy. But for the ones that are worthy, how are you giving to them. More importantly, is "generous living" part of your nature?

A few years ago Oprah interview some poeple who came into sudden wealth. Some were lottery winners and others were actors. All said they were mobbed by family and friends who wanted/needed money. The bottom line that everyone agreed with is that sudden wealth magnifies your innate personality: if you are stingy, you will be even more stingy with your money; if you are innately generous, you will be even more generous with your new money.

Children learn more by watching than by listening to their parents. If they see their elders being generous, I want to believe that these youngsters will grow up being generous (that is a hope of mine, I don't know that there is any documentation to prove that). I've seen that lived out many, many times in individual situations - youth will be naturally generous because that is what they were taught by their parents.

All of us can be examples of daily generosity to individuals and causes. All of us need the practice of being more generous. All of us should be examples of generosity to the next generation. Generosity is not just about money, but also about your time, your skills, your expertise, your wisdom - its about being generous with YOU!

What are you doing to live out generosity? Do you take advantage of those opportunities that literally come across your path or do you ignore them? Do you research the causes that are requesting money or do you ignore them or give them a token gift instead of really digging?

Then, when you are living out your generosity, do you tell others about the neat cause or purpose? Make sure your motivation is pure - don't tell others to get them to applaud you, tell others because you want them to be aware of how they can help, too.

Make generosity part of your DNA. Make it so that when other people talk about you, the word "generous" is used countless times. Make "a generous person" the words that should be on your tombstone.

Why do this?

• If you are a follower of Christ, you'll be generous because God was and is generous and you are commanded to be generous (you have absolutely no other option).
• If you are not a follower of Christ, do it because there is no downside to being generous. When is the last time you heard someone get criticized for being "too generous?"

Give. Be generous in all you do, every day, so that people will automatically presume you will be wisely generous.

Lead On!
Steve

Conversations Not Confrontations

In elementary school I remember the entire class being punished because of the infraction of one person who would not come forward and admit to what he or she did. Instead, all of us got punished. I've seen that happen in churches and church staffs, too. Because of one person's actions, an edict is issued or a policy is passed which applies to everyone.

Church policies have their place but my experience is that when you have formal policies, then you need "policy police" to enforce them. At worst, that can lead to a culture of negativity or fear or confrontation. Many church policies are created in reaction to one incident in an effort to prevent future situations. My experience tells me that often these are over-reactions to one occasion. Instead of passing policies, let me suggest that church leaders act as leaders and confront the person that caused the situation.

Actually, confrontation has negative connotations but there are positive ways to have a confrontation. So, intead of using a negatively-tinged word, I'll switch to the word "conversation." Rather than have a confrontation, have a conversation.

A conversation - a constructive, positive, "one-minute-manager" conversation - can do a lot to salvage the employee or volunteer in ways that a policy can never do. In fact, the person that caused the incident may never associate that his action resulted in a policy. Policies require time and discussion among a bigger group when that may not be necessary.

So, please talk with people - have conversations. Help the person understand how his words or actions were received by others, how what she did caused confusion, pain, or even disruption in the organization. Show that person how he could have handled it better or what she should have said. Do this in a conversational way, not confrontational.

At the end of this, you will have saved loads of time in not passing a policy when then requires further policing. You will have gone straight to the source of the issue. And you will have had a conversation which will lead to better communication among everyone in the organization.

Lead On!
Steve

Electronic Donations

Making donations or gifts without using checks or cash is increasingly routine and within a few years will become the norm for many churches (but not all - some churches will fight this tooth and nail). There are a lot of ways to give electronically - let me list a few:

• Bank Drafts
• Bank drafts have been around for a couple of decades or more. This is where you authorize your bank to send money to the bank account of an organization (either at your bank or even another bank). It is easy to do but the donor has little control over the situation and gets reports only from the bank statement or from the organization sending the donor a contribution statement. This system is okay, but antiquated.
• I work with a church that has been using this system for many years. Each month, almost 10% of their budget comes in this way. The fees are very low and the church gets most of the money, too.
• Online Giving
• In the past 10-15 years online giving has become quite the rage - as it should be. Younger generations don't carry cash or even plastic - they "keep" their money in their phones or other electronic devices. They want to be able to go to a website where they can readily and easily give money to the organization they wish to support. This is a very good way to support your church and every church should have an electronic giving portal.
• Credit card fees range from 2.30% to as high as 5% of the total gift and debit cards are typically much less. These fees should be considered part of the "cost of doing business." In general, the easier it is for people to donate, the more people and the more donations will be received which will offset the fees. http://www.serviceu.com/ or http://www.e-giving.org/ are good companies that know churches and can provide solutions.
• Giving Kiosk
• About 10 years ago the idea was born of a computer station in the lobby of the church where people could give by either swiping a credit card or going to a website to give money. This is very neat - Stu Baker with http://www.securegive.com/ can show anyone their product which was developed by his father, a pastor in Georgia.
• This kiosk provides great flexibility to the donor who can set up a one-time or recurring gift (just like in online giving), but it also gives the donor the option to swipe a credit or debit card by which means that personal data is transferred to the account and that makes it even easier for the donor. I very much like the idea of giving kiosks.
• A colleague of mine even dreamed up a "kiosk-lite" by finding an old computer and monitor, connecting them to the internet and programming the PC so that it would only stay on their churches E-giving website and never go anywhere else.
• Texting Service
• After natural disasters like the earthquake in Haiti in 2011, several organizations advertised where people could text money. This is a very simple method for people to donate money to their favorite cause - the problem is that most of the organizations that coordinate these apps have amounts of $5 and $10 - nothing more. I'd like for there to be an "unlimited" category where people put in their own amounts. I read in June 2012 where they are exploring increasing the amount that can be given to $20 (this is negotiated with the cell phone companies). 
• This is very convenient but it limits how generous people can be. If I want to give $100, I don't want to tap my phone 10 times (at $10 per time) to give money. I very much like this concept, I just want it to be less restrictive.
• QR Code
• A QR code is that square made up of hundreds of very small black and white squares. QR codes are free. What they do is to activate the web browser on a portable device (phone, tablet, etc.). Every QR code is linked to a specific website. Linking your QR code to your churches giving website allows people to navigate to that site immediately.
• A friend of mine created the QR code for his church and now places the QR image in every Sunday bulletin. As the offering is passed, people can pull out their smartphones, scan the code, and give as much as they want.
• This is ultimate flexibility - it puts the donor in total control of when, where, how much, and to what he or she is giving. People can take the document with the QR code and use it later or save the destination of the QR code for later referral.

Additional benefits to electronic giving:

• There is the well-documented fact that online giving is pretty much impervious to Sundays where the church is closed due to weather (snow, hurricanes, etc.) and tithing declines due to vacations and holidays. The internet is never closed due to weather and it never takes a vacation or is sick.
• What is less well-known is how much online giving will make it easier for people (guests and regular attendees) who want to give who don't have cash or a check with them that Sunday. If they could, they would give - but they left their money at home. No one leaves home without their smartphone!
• An insurance agent told me the church's premium will decrease because of the reduced exposure since there is less cash on hand (fewer dollars that could be stolen). That is a good but hidden benefit!
• Online giving is becoming the norm - society is teaching people how to buy things online and make them feel comfortable with it. Since the marketplace is already doing the education to/for church members, churches can piggyback on this and leverage this knowledge for the church's benefit through its online giving.
• Donors can keep track of their contributions themselves. People can see what they've given to and what they haven't supported (yet). This will help the church's Finance Office by having donors more informed and even be able to print out their own statements of contribution as they need.
• It also makes it easy for the church to send an email to everyone who has donated online which can result in increased communication between the church and members, especially donors.
• Also, it might help the Finance Office. Some online giving sites interface with church financial software so that online gifts can be imported directly to the member's database. That will update the financial portion of a member's record and help the church keep track of all contributions by that person.

There are lots of ways to leverage online giving. Wise churches will be looking at ways to maximize the number of ways to receive gifts and to make it easier for donors to give. If you make it hard, then you'll be on hard times. Make it easy for people to give - use the KISS principle: "Keep It Simple, Stupid!"

Lead On!
Steve

How Much Debt Should a Church Have?

Personally, I think church debt should be exactly like your homeowner's debt: that ratio should never exceed 2 to 1. Yes, a bank will loan you 3 to 1 but you'll be so strapped financially that you won't have any disposable cash for doing anything else.

 

The ratio to the operating budget, my suggestion is 10% or less. Basic economics for a church with no debt:

• building is about 20%
• programming (including missions) is about 30%
• staffing is about 50%

To pay your loan, you've got to take it out of one or all three of these. Most of your building costs are fixed (energy and maintenance). That leaves programming and staffing - if you cut those too much, you'll have a great building with no one to lead and no one to follow.

 

Better to have programming at 25% and staffing at 45% with some growth than to cut to the bone at 20% programming and 40% staffing (which will kill your staff, too). You can grow out of debt, but that takes a lot of intentionality - that is hard when most pastors are trying to manage what they already have and can't imagine taking on more in order to grow giving and attendance even more than they are already doing.

 

I've worked with some churches that have a 3 to 1 ratio (debt to annual budget), but they are hurting financially. And, their new building will be old and worn down long before the debt is paid off at their current rate. The appearance won't attract new people, especially a younger generation.

 

My recommendation, get out of debt as soon as feasibly and fiscally possible. Debt is fine so long as it doesn't become the boa constrictor that wraps around the church and kills it.

 

Lead On!
Steve

Roadblocks to Strategy Implementation

Below is the outline of materials presented by Susan Beaumont, a consultant with the Alban Institute. She is very effective and what she has to say (and how she says it) is excellent. Think about each of these 10 items - flesh them out in your own mind and reflect on which one(s) are the roadblocks to the success of your vision and your church.


Top 10 List of What Gets in the Way of Executing Strategy

1. Too many strategic priorities (should be no more than 2-3 priorities)
2. Senior clergy losing strategic focus
3. Board fails to provide oversight
4. Rogue committees that over-function
5. Board micromanages the staff team
6. Staffing structures that don’t support the strategy
7. No performance management system
8. Absence of program evaluation
9. Lack of meaningful measures of success
10. Operating budget not aligned with strategies

Lead On!
Steve

Reading List

This is a list of some of my favorite reading materials for my profession: church business administration in no particular order. What's on your list? Share it.

• Books
• Me, Myself and Bob by Phil Vischer
• E-Myth Re-visited by Michael Gerber
• In Search of Excellence by Tom Peters
• Magazines
• Fast Company
• Religious Product News
• Church Executive
• Peachtree Business Products catalog
• NACBA Ledger
• Harvard Business Review
• Christian Computing Magazine
• Today’s Facility Manager
• Church & Clergy Tax Update

Finance Staffing Costs

Every organization spends money on staff who will do the financial accounting for it. These are skilled individuals with a passion for their organization. Frankly, they're not working there for the money; these people are talented enough that they could get better-paying positions at for-profit companies. But that's not where their heart is. They want to make a difference in the world, so they work for churches and non-profits.

My experience and knowledge says that there is a formula that can be applied to determine what an organization should pay for its finance staff. This formula is for the staffing functions only; there are additional costs for materials, computers, training, etc.

Here's the formula: 2% to no more than 2.5%

That's it. That simple.

Here's what I mean by that. Figure out what your gross receipts are for the past year. By gross receipts, I mean all revenues from all streams that came into the organization for the past fiscal year. Take 2% of that figure and you should be able to staff your finance department with that budget figure.

For instance, if your operating budget plus additional gifts totals $600,000, then should expect to pay about $12,000 for someone to manage the entire financial office: contributions, accounts payable, payroll, general ledger (which includes bank reconciliation), and financial reporting. At the most, you should pay $15,000 (which is 2.5%).

If you are paying substantially more than that, I think you're paying too much (remember, this is my opinion) unless your finances are incredibly complicated (and if they are that complicated, then you need to find ways to simplify them). Check out your financial operations, see how efficient and effective they are, see if they have the right tools to make them work faster and better, and then decide if you are paying too much because you don't have the right staff. Then, get the right staff people!

Lead On!
Steve

Favorite Sayings

Over the years I've collected a few favorite sayings. Some are original with me, and others I've adopted. Here they are (I'll add to the list as I go along through life):

1. The problem with leadership is knowing who is following you and who is chasing you. That may take a while to sink in. What it means is that some of the people behind you are supporting you while others are actively throwing knives at your back. You want to get rid of the latter or transform them into the former. Regardless, leaders need to know that some people in their circles are not followers but chasers.
2. A financial crisis is a terrible thing to waste. Use crises as opportunities to fine tune the organization and prune programs, expenses, staff, and even buildings that are not in the critical path of your mission. If everyone knows there is a fiscal crisis, then don't waste it by continuing to support ministries that have needed to go away but you didn't have a good enough reason to terminate them.
3. Give God what’s right, not what’s left. Neat stewardship quote (not original to me).
4. Separate the Personal from the Professional. Too many times people perceive a professional criticism as a personal attack. Or they mix their professional lives with their personal lives and that blend causes angst for them and those around them. Professionals should act professionally and realize that who they are (personal life) is NOT their job or career (professional life).
5. Committees should be a balance of institutional memory and new ideas. As you work with who should be on a committee, always have a balance young people and new people with new ideas with people who've been on the committee a while and those who've been in the church a while. The longevity group tempers the younger/fresher group (but hopefully doesn't completely dampen them) and the younger/fresher group instills vitality and enthusiamsm (but not at a cost that tramples history or leads into minefields which could cost the church its unity).
6. Quality + Service + Cost = Value. This is based on Ray Kroc, founder of McDonald's, who used the QSCV formula to run his stores. I've modified it to define value which is what I strive for in all my purchases. I don't necessary take the low bidder but I will go with the vendor that gives me the best perceived value, and that is a combination of quality, service, and cost.
7. If nothing unifies us, then everything divides us. Every church and every organization should have one central thing around which everyone unites. That one thing will keep everyone on task and everything in focus. When a church or organization just does routine things without any unifying commitment, then everyone will feel that their particular passion should be the most important thing. That leads to division.
8. Attack the problem, not the person. Quote from an article in the 1980s in Fortune magazine. It's been something I've used with every staff I've ever had. It helps people to focus on the issue and not the person. If the person is the issue, that's another thing, but most of the time, problems (not people) are at the root of conflicts.
9. Hire attitude; train aptitude. After hiring and firing dozens of people, I've learned that aptitude (skills, abilities, talents, knowledge, etc.) can be taught or learned (not always, but most of the time). Attitude cannot be taught or learned; it is in someone's DNA to have the right (or wrong) attitude. My experience as a manager is that a person's attitude is the single most important factor in that person keeping or losing a job. Résumés list a person's aptitudes; the interview reveals the attitude, and that is the part that should get you hired.
10. If you need a tool to do your job and I don't give it to you, shame on me. If I you need a tool to do your job and I give it to you but you don't use it, we're going to talk. I let all new employees know that this is what I expect from them. First, if they need something, they need to ask me for it. Second, if I don't provide it (and don't have a good reason for not providing it), that is my fault and they should complain louder or to someone else. Finally, if I do give them a tool and they don't use it, then the employee is heading toward losing his/her job.
11. Have conversations, not policies. This comes from North Point Community Church where they have almost no operating policies (except Personnel Policies, which are a must). Instead, they have conversations when someone acts up. So, when someone does something that out of bounds, instead of passing a policy to "punish the entire class" the supervisor has a conversation with the person. For instance, if someone schedules an event and gives the building staff about 24 hours to get ready for it, that results in a conversation to explain to the person that there are lots of moving parts to pulling off an event, even a small one, with just a few hours' notice and the best practices is to give two week's notice of a event.
12. I get worried when I don't hear laughter in the halls. A former boss said this. He feels that having a staff that laughs with each other is healthy emotionally. When a staff does not laugh and carry on, then things have become very serious in the office and even tense. I encourage laughter in the halls!

Lead On!
Steve

Bell Curves and Giving

Here's an interesting stat: the most generous age bracket in any church are 50-somethings.

• College for the kids is done and paid for
• The kids' weddings are over
• The mortgage is low because they got it several decades ago (if they even have a first mortgage)
• They are in middle to upper management at work making really good money
• In short, their expenses are low and their income is high which means they've got more disposable income than other age brackets.

What about the other decade age brackets regarding their charitable gifts? Here's my analysis of them:

• 20-somethings are just getting started financially. Many have serious college debt, most are not ready to settle down with a spouse (much less kids), and their income is on the low side since they are just beginning their careers.
• 30-somethings have begun to settle down with families and careers but they are financially strapped because of the mortgage, cars, retirement planning, new furniture for the home and kids, etc. They'll give, but it will be usually from their financial leftovers. A few are giving more and more but they are the exceptions.
• 40-somethings are well into their careers and an impressive number have even risen to upper management already. Many have figured out a financial strategy and are able to give surprising amounts. Others want to give but can't, right now.
• 50-somethings are the main givers to every church. Not every 50-something is a big giver but the preponderance of them give more than at any other time in their lives. They've reached the age when they want to live for significance, not success.
• 60-somethings have retirement looming over them and their giving begins to decrease, sometimes rather sharply. Some 60-somethings have to keep working while others are planning comfortable retirements. However, in every case, they are beginning to ask the question that 70-somethings ask every day.
• 70-somethings wonder "Am I going to outlive my money?" and that causes their charitable giving to drop off a cliff. Those with ample resources continue to give, but the ones with "just enough" cut their giving back significantly.
• 80-somethings and beyond do not form a large giving base for two reasons: their numbers are smaller than other age brackets (and shrinking daily) and their financial resources are smaller than the other age brackets. An occasional 80-something will be a high-capacity giver, but most are hanging on by their financial fingernails.

How does this translate to a church?

• At either end are the 20-somethings and 80-somethings: the goal is for the 20-somethings to be giving, per person, more than the 80-somethings. "More" is probably about 1.5 times.
• Next are the 30-somethings and 70-somethings. In a healthy-giving church, the 30-somethings will be giving about twice what the average 70-something is giving, because giving by 70-somethings is plummeting.
• The 40-somethings should be the second strongest age bracket in a church, and the third strongest should be 60-somethings. 40-somethings are the "left shoulder" of the bell curve and 60-somethings are the "right shoulder." Strengthen that right shoulder as much as you can because in 10 years, they'll be 50-somethings.
• The peak of the bell curve is the 50-something crowd. Who are your 50-somethings today? Who coached them to give? What was their giving like 10 and even 20 years ago?  But wait, look at your church 10 and even 20 from now. Is estimated future giving by your current 30- and 40-somethings enough to replace what your current 50-somethings are doing? What are you doing long term to ensure that generosity becomes part of your church's culture?

A church must be cultivating and encouraging generous giving with the 40- and 50-somethings. That should be the church's main focus. Next should be the 30- and 60-somethings. Lastly, the 20-, 70- and 80-somethings should get the least financial emphasis focus, because they are in the weakest position to contribute to a church. By "cultivating and encouraging generous giving," I mean that there should be a stewardship education plan for all groups but that those age brackets should get a bigger dose than other age brackets. Give them a second helping of generosity teaching; it will do them and you some good.

By the way, this analysis is true of annual giving (giving from your checkbook or income statement) but also of planned giving (giving from your estate or balance sheet). A church should encourage 40- and 50-somethings to put the church in their will. The 60-something and older crowd have typically already created a will (although the percentage of people without wills is shockingly high). Get some estate planning for 40-somethings and 50-somethings ASAP!

Lead On!
Steve

Strategic Budgeting for a Young Marrieds' Ministry

One of my former churches has a strategic vision for reaching young and median married adults. They don't ignore senior adults, but they put a vast amount of resources to targeting 20-, 30-, and 40-somethings (and that overlaps a little to the 50-somethings). Since I was on staff there, let me give you their "secret" plan. Actually, I don't think it was strategically thought out except that God led them to develop a very good plan. The plan is actually buried in the detail of the budget which most people don't see, but they do see the results. Serious financial resources (staffing, buildings, and programming) are expended - the results are that this church is known as the church for young married in that city.

1. Nearly/Newly married couples (20-somethings)
1. The church wants to get in front of engaged couples or even couples who are going to be engaged. Female staff members informed the male staff members that future brides spend a lot of time reading local wedding magazines. So, the church now hosts bridal shows, advertises in wedding magazines, reaches out to local wedding photographers and caterers, etc. They want to be known in their local wedding industry as a wedding-friendly church.
2. The church has two small group or Sunday School classes for nearly/newly married couples. The teachers for these classes are couples who've been married for over 20 years who can provide good role-models. The female teacher regularly meets with the young women in the class and the same for the guys. This provides outlets for the genders to share what is going on with them as they go through life.
3. The church also supports this age group with seminars by bringing in speakers and/or sending them to a conference at another church. Also, about two times a year there are fellowship meals  at the church (with childcare provided if needed). The goal of these times together is for nearly and newly marrieds to get to know each other and eventually to become the support network for each other as they go through the various life-stages together.
2. Families with young children (20- and 30-somethings)
1. When a couple announces they are pregnant, the staff assign another young married couple to partner with the pregnant couple. The assigned couple helps the pregnant couple in any way possible such as accompanying the woman to the doctor if the husband is away, providing childcare for other children while mom is at the doc, having at least one supper together during the pregnancy, and even organizing a baby shower especially if this is the first child.
2. After the baby is born, the assigned couple coordinates getting food to the new parents, informing the church staff of the new baby, and getting a sign from the church which they place in the front yard of the couple so that their neighbors will know about the new arrival. 
3. The church has a bulletin board with 12 sections (one for each month) and pregnancies are made public by placing the couple's name on the bulletin board in the month that the baby is due. When the gender of the baby is known, a small blue or pink ribbon is pinned by the parent's name.
4. At least once a year, the church hosts a nice supper for everyone that had a new child born in the past year. Childcare is provided and the parents get to enjoy a quiet dinner (maybe their first as a couple since the baby came) with a bunch of friends who are in the same life-stage as them.
5. There are no "mass baby dedications" - only one baby is dedicated per worship service. The family is invited onto the platform, the pastor holds the baby, says a few nice words, has a prayer of dedication for the baby, parents and any siblings. BTW, the baby is kept in the nursery until the dedication time - then a volunteer brings the new baby from the nursery, hands the baby to the mom just before the parents go forward and after the dedication, the volunteer takes the baby back to the nursery so the parents can stay for worship.
6. Each month there is a PNO (Parents Night Out) and a SNO (Social Night Out). PNO is meant for couples to drop their kids off at the church so mom and dad can have a date. SNO is for classes or small groups to have fellowship time together while kids are safely in a church nursery. The cost for three hours of childcare is minimal, about $7 or $8 per child in order to make this affordable for parents - yes, the church budgets money to subsidize this but not much since there is so much volume that a fair amount of income is provided by the parents.
7. The children’s division had a priority for funding in the annual budget. If necessary, the pastor would solicit children's workers and also encourage them. Teaching the teachers was emphasized by bringing in education specialists from nearby colleges.
8. Facilities improvement was constant. A list of needs was kept current and as items on the list were ticked off, other items would be added. The goals was to keep the facilities in very good condition because new parents want and expect the best for their children.
9. Over the summer, there were day camps at the church for preschoolers ("popcicles and pools"), weeklong summer-day camps centered on recreation at a nearby campground. These kept the children busy and provided opportunities for the parents to talk and support each other.
10. The goals are for the church to be a place children WANT to go to and a place where young parents are finding the support and training network for this brand-new stage of their lives.
3. Marriage enrichment (30-, 40-, and 50-somethings)
1. The church provides bi-annual marriage conferences with a very good outside speaker. The conference is often a two or three day event where the speaker is on several times speaking in formal settings (such as Sunday morning sermon time) and informal settings (such as a dinner with a Q&A time). The topic of the conference is about making marriages work and improving communication between spouses.
2. There are other seminars on personal finances which is critical to new marriages. The church provides training for small group teachers regularly; it continually improves the facilities, and even has on-campus counselors (a local Christian counseling org uses church space rent-free but gives church members a discount).
3. The goal is for the church to support couples during all the difficulties of marriages. Couples who've been married 10 to 30 years go through massive life-style changes and adapting to them requires constant re-focusing by both spouses. The church wants to help each partner understand his/her role in the new patterns and understand what the other parent is going through. Yes, there are divorces at this church, but fewer than I’d seen at other churches.

Okay, this is how one church (albeit with a lot of resources) does it. And I never said what this church does for children of these young marrieds. Frankly, the children get about the same as children in other churches but the difference is how much attention the parents are given in the church's budget and programming.

How are you living out the key components of your strategic plan and vision?

Lead On!
Steve

Walt & Roy

One of my favorite business books is Me, Myself and Bob. This hilarious book is the story of the rise and collapse of Veggie Tales as told by its founder, Phil Vischer. Throughout the book you learn that Phil's childhood hero was Walt Disney - to the point that Phil wanted to create a Veggie Tales theme park like Walt did. It was not to be and it all fell apart due to some bad business decisions. Toward the end of the book, Phil has a chapter called "Lessons" in which he very openly shares what he learned from the experience and that will help him in the future.

One of his critical lessons was that while Walt was the innovative genius, his brother Roy was a fiscal sage. Orignally it was called Disney Brothers' Studios before Walt bought out Roy. One of the advantages that Roy had over anyone else was that he was Walt's brother. As such, he had the ability and power to confront Walt and tell him, as no one else could, whether one of Walt's ideas was crazy or not. Roy could get in Walt's face and tell him the honest truth. Walt had to accept it - it was coming from his partner who had as much to lose as he did. Roy's motives were honest - he wanted success. Roy was responsible for counting the money (Roy's Boys were the Disney beancounters!) while Walt's guys were the creative thinkers. It took both of them to come up with the American success story that is the Disney empire. However, none of this could have happened if Walt didn't have a Roy and if Roy didn't have a Walt.

Phil continues in this chapter with a personal lesson that he learned the hard way - he was a Walt without a Roy. He never gave anyone the authority to confront him with the cold, hard financial facts. Instead, Phil figured he could "create" his way to financial success. I especially like how Phil ends the chapter. He tells the reader that if you are a Walt, find yourself a Roy and give him the responsibility, authority, and trust to tell you the hard financial picture. And if you are a Roy, then wait for your Walt and don't sell yourself short. Phil acknowledges that as a Walt or a Roy you may never find your counterpart, but always keep looking.

My take-away from this is to encourage pastors, CEOs, and other visionary leaders to intentionally find a Roy. Leaders absolutely need an equally visionary beancounter (that is not an oxymoron, they do exist!). And what's more, leaders need to very clearly tell the financial guru that the leader depends on getting good, accurate, and even scary financial figures. The financial status of the organization is not the fault of the CFO/messenger, but that if the CEO does not heed the financial advice, the fiscal failure of the organization will rest on the CEO.

Lead On!
Steve