Several years ago, Dr. Al Sutton of the 6th Avenue Baptist Church in Birmingham, Alabama, spoke to a group of church administrators. D. Sutton used the biblical text of Jesus feeding the 5,000 men (or about 25,000 men, women, and children). It was getting late and the people were hungry. The disciples asked Jesus to send the crowd away. The disciples wanted to outsource the problem but Jesus insisted on "insourcing" the situation. Then the disciples said they didn't have any money and Jesus replied, "what resources do you have and lets see how we can use that." Dr. Sutton thanked us administrators for putting up with pastors who want to imitate Jesus by insourcing problems and by telling the finance people to just use whatever you've got (without fully knowing what there is to begin with). I'm not doing Dr. Sutton justice with this brief paragraph, but you get the idea.
Every day Christians (and non-Christians) ask God to make personal problems go away. If the issue will only disappear, then there won't be a problem, right? We even throw Jesus back at God, "If we have faith the size of a mustard seed, God will solve everything." God wants us to deal with issues - not run from them. God wants all of God's disciples to get involved, to get our hands dirty, and to "insource" problems. God doesn't outsource - God uses you and me. BTW, I'm not talking about medical, ethical, or legal problems - those have tangible consequences and are a matter of much prayer; sometimes God does intervene in human events in miraculous ways to cure diseases and take care of situations far beyond our powers and require divine resources. But what is within our control, God wants us to confront and deal with directly - not push aside.
Next, Jesus asked about the resources available. All too often we tell God that we don't have enough; that if he'd only provide more we could do more; that the problem is too big for our meager resources. Jesus isn't about what we have - he's about what God has. I don't like it one bit when God tells me to start out on a project when I know that I don't know the way or have the material goods to finish - I even tell God about the parable of the king who went to war without counting the cost. Invariably God tells me to keep going and trust him. I know it sounds corny and trite, but it is true (about trusting God for daily needs - not daily wants).
So here's my stewardship lesson for all who read this - all Christians must get involved using every bit we've got. Asking God to take the issue away won't solve anything. Problems are opportunities for God - stop telling God to take some issue away that you don't want to deal with. Next, use all the resources (time, energy, money) to address the opportunity at hand. As you're in the middle of the issue, you may be surprised to see God at work and multiplying resources more than you thought possible. Or it may be like the disciples, only after the event is over and some time (hours, days, or months) has passed, will you be able to reflect on that event and see how God was at work. But rest assured of this, God is always at work!
Lead On!
Steve
Sunday, November 7, 2010
Tuesday, November 2, 2010
Legal Software on the Cheap
I found a neat website the other day (actually, it wasn't me - my wife told me about it after she went to a class for grantwriters; if you're interested in her services, contact jenniferklaw@gmail.com).
Techsoup.org provides 501(c)(3) organizations with dirt cheap software. MS Office 2010 for $24 (Excel, Word, Outlook, etc). That's a lot cheaper than anywhere else I've seen. They have a whole host of other software products such as Blackbaud, Adobe, etc. (probably about 30 different titles).
Check them out and see if you can get some current software on the cheap for your organization. They'll think you're a hero (and you can thank me later).
Lead On!
Steve
Techsoup.org provides 501(c)(3) organizations with dirt cheap software. MS Office 2010 for $24 (Excel, Word, Outlook, etc). That's a lot cheaper than anywhere else I've seen. They have a whole host of other software products such as Blackbaud, Adobe, etc. (probably about 30 different titles).
Check them out and see if you can get some current software on the cheap for your organization. They'll think you're a hero (and you can thank me later).
Lead On!
Steve
Thursday, October 14, 2010
Personnel as a Percentage of the Entire Budget
Every year the question comes up, "Is the personnel budget too big?" Some people actually mean, "Are we paying the staff too much?" and that is a question that hurts. In reality, it shows the ignorance of the person asking the question more than anything - they have no idea what their staff does. But more often than not, the intent of the original question is concern over the size of the staff (number of employees) and is that cost appropriate for our church. Here are some figures that I gathered from my local colleagues regarding their church's 2011 personnel budgets:
BUT, the real question is, "How much staff do we need to do what we want to do?" That is a completely different question and it is too deep to unpack here. However, I do want to wade in ankle-deep.
Most church staffs grow organically - that is, stafff members are added progressively every year or two as the church grows. This is the normal and customary route. Oh, we need someone to help the youth minister, hire a part-time middle school coordinator; our seniors are feeling neglected, hire a retired minister (he can use the income) to take care of the seniors; our current custodians aren't cleaning the building well, hire another one.
Let me suggest a better method - strategic growth. Strategic growth is more painful in the short run but far more productive in the long run. Because of the time needed, cuts in staff that result from this, and the ensuing time needed to educate members and implement the new structure, I suggest that churches only do this at most every five years.
Strategic growth, in a nutshell, is when church leadership (ministry council, elders, etc.) looks at the "five-year plan" that every church should have. Simultaneously, the council gets a conservative estimate of income for each of the next five years. With those two pieces of info, the council decides what is the #1 goal for the next five years (that thing, without which, the church would cease to exist) and then funds that with staffing, programming, and building money. The council then decides what is #2 and funds it appropriately and so forth until the estimated money runs out.
When the council has run out of money to fund its strategic plan, all other items on the priority list are cut. That means that some staff will be cut, some buildings may not be built or may be renovated, and some programs and ministries will no longer be done. That is going to please some members and anger others - this is where the hurt and pain come in. You're not going to please everyone, but you will please God as the church uses its resources (staffing, building, and members' time for ministries) in a strategic method.
A lot more can be said about this but I think you get the idea of where to go from here. I do feel that if strategic staffing and programming is implemented, you'll be able to look back and be amazed at how far how fast the church went.
So, next time someone asks, "How big is our personnel budget?" return the question with one of your own, "Are we spending personnel dollars in the right way?"
Lead On!
Steve
- 40.00%
- 53.58% - does not include food service or custodial personnel
- 48.00% - does not include custodians; church also pays $400,000 in debt service
- 54.00%
- 47.80%
- 52.60%
- 55.76%
BUT, the real question is, "How much staff do we need to do what we want to do?" That is a completely different question and it is too deep to unpack here. However, I do want to wade in ankle-deep.
Most church staffs grow organically - that is, stafff members are added progressively every year or two as the church grows. This is the normal and customary route. Oh, we need someone to help the youth minister, hire a part-time middle school coordinator; our seniors are feeling neglected, hire a retired minister (he can use the income) to take care of the seniors; our current custodians aren't cleaning the building well, hire another one.
Let me suggest a better method - strategic growth. Strategic growth is more painful in the short run but far more productive in the long run. Because of the time needed, cuts in staff that result from this, and the ensuing time needed to educate members and implement the new structure, I suggest that churches only do this at most every five years.
Strategic growth, in a nutshell, is when church leadership (ministry council, elders, etc.) looks at the "five-year plan" that every church should have. Simultaneously, the council gets a conservative estimate of income for each of the next five years. With those two pieces of info, the council decides what is the #1 goal for the next five years (that thing, without which, the church would cease to exist) and then funds that with staffing, programming, and building money. The council then decides what is #2 and funds it appropriately and so forth until the estimated money runs out.
When the council has run out of money to fund its strategic plan, all other items on the priority list are cut. That means that some staff will be cut, some buildings may not be built or may be renovated, and some programs and ministries will no longer be done. That is going to please some members and anger others - this is where the hurt and pain come in. You're not going to please everyone, but you will please God as the church uses its resources (staffing, building, and members' time for ministries) in a strategic method.
A lot more can be said about this but I think you get the idea of where to go from here. I do feel that if strategic staffing and programming is implemented, you'll be able to look back and be amazed at how far how fast the church went.
So, next time someone asks, "How big is our personnel budget?" return the question with one of your own, "Are we spending personnel dollars in the right way?"
Lead On!
Steve
Monday, July 26, 2010
Fishes & Loaves with Kiva.org
Last Christmas the church staff did not give each other white elephant gifts. Instead, the money that we would have spent on buying knick-knacks for each other was pooled for a total of $450. We then went online at the Christmas party to Kiva.org which is an organization that makes micro-loans (loans of $1,000 or less per person) to people in third-world countries. These individuals have been screened by a local organization to determine the worthiness of what the individual plans to use money for - usually to fund a small business whose profits will repay the loan, provide income for the person's family and reinvest funds back into their business. The default rate on these loans is less than 2% which is far less than loan defaults in the US. At the party we selected some individuals to receive our gifts and sent the money on its way.
Periodically I get an email from Kiva.org informing me of the status of our loans: the person is now fully funded, the person has begun repaying the loan, or the person has completely repaid the loan. In the seven months that we've had money with Kiva.org, all of the money that we originally loaned has been repaid and we've loaned others some money. In the past seven months we've had money paid back to us which we then loaned to others so that we have now loaned a total of $875 - yes, that is a "fishes and loaves" story.
This is a neat way to appeal to younger generations to get them involved in specific generosity events. They can actually see a picture of a lady in Ghana or Paraguay who received the money and track how she is using it and repaying it. Kiva.org is not a church or religiously affiliated organization, but they are changing lives around the world. BTW, all of the recipients of our church staffs' money have some form of religious connection in either their name or in their bio - this is our small way of helping Christians around the world.
Lead On!
Steve
Periodically I get an email from Kiva.org informing me of the status of our loans: the person is now fully funded, the person has begun repaying the loan, or the person has completely repaid the loan. In the seven months that we've had money with Kiva.org, all of the money that we originally loaned has been repaid and we've loaned others some money. In the past seven months we've had money paid back to us which we then loaned to others so that we have now loaned a total of $875 - yes, that is a "fishes and loaves" story.
This is a neat way to appeal to younger generations to get them involved in specific generosity events. They can actually see a picture of a lady in Ghana or Paraguay who received the money and track how she is using it and repaying it. Kiva.org is not a church or religiously affiliated organization, but they are changing lives around the world. BTW, all of the recipients of our church staffs' money have some form of religious connection in either their name or in their bio - this is our small way of helping Christians around the world.
Lead On!
Steve
Wednesday, June 9, 2010
Business Books
Why don't ministers read more business books? There are some classics out there by gurus such as Tom Peters, Peter Drucker, and Jim Collins. There are lesser known authors or newer authors such as the Heath brothers (right now I'm reading their book, Made to Stick - great stuff). Popular business books from the past few years are very readable and enjoyable.
If I could, I'd challenge every minister to read one business book for every two books he or she reads on theology or church life. Think outside the box! After all, a minister is the CEO of a corporation. An aside, a minister once told me that the church is the only organization in the world where the customers (who pay the bills) are also the stockholders (who control the company) which leaves the staff in the middle.
So, please read some business books. Here is a sample:
If I could, I'd challenge every minister to read one business book for every two books he or she reads on theology or church life. Think outside the box! After all, a minister is the CEO of a corporation. An aside, a minister once told me that the church is the only organization in the world where the customers (who pay the bills) are also the stockholders (who control the company) which leaves the staff in the middle.
So, please read some business books. Here is a sample:
- Me, Myself, and Bob by Phil Vischer (story of the rise and fall of Veggie Tales)
- In Search of Excellence by Tom Peters (a management classic)
- Made to Stick by Chip & Dan Heath (communicating your message)
- Switch also by the Heath brothers (how to bring change to your organization)
- Good to Great by Jim Collins (and the 30-page monograph dealing with non-profits)
- How the Mighty Fall by Jim Collins (how to detect and stop the decline of your organization)
- Y-size Your Business by Jason Dorsey (not read it yet but gets rave reviews about including the next generation of 20-somethings)
- and too many others to count but this list will get you started
Lead On!
Steve
Steve
Getting around the FDIC cap on insured bank balances
About three years ago, a new financial service came available which addresses the issue of the FDIC cap of $250,000. This service, known as CDARS (pronounced like the tree), is explained in full at www.cdars.com. Some banks have purchased this service and some have not; check with your bank to see if it participates. In a nutshell, this is how it works:
• Your church buys a certificate of deposit (CD) for a little less than $250,000 (in order to have any interest earned included in the $250K cap).
• The CD you purchase is actually a CD in First National Bank of Peoria (for example). In turn, First National Bank of Peoria buys a CD from your bank for the same amount. These two banks are cooperating in the CDARS program and have just exchanged money that is fully insured through FDIC.
• You buy as many CDs as you want, all from different banks around the country, to cover your financial assets. The maximum amount you can invest in CDARS is $50 million (I don’t think that’s a problem for anyone).
• The CDARS program does several things:
o It insures as much money as you want to have covered
o It invests the church’s money through one financial institution so you get one bank statement (which means you don’t have to deal with a dozen banks and their statements)
o You earn interest at the going CD rate (which is very low right now – about 1% per year – maybe it will go up soon?)
This is how my church puts this in practice
• My church has a cash balance of about $1.8 million (not unusual for a megachurch)
• We purchased 12 CDs for $100,000 each (that $1.2 million plus the $250K insured through our bank covers the bulk of our demand deposit balance)
• These CDs are laddered so that one comes due every month.
• All interest earned is put into the church’s checking account (which is added to the church’s financial statement and pays for the operations of the finance office)
• Each month our bank notifies me by email and I sign and email bank a document approving the next CD purchase – it is all handled electronically
• This church has a line of credit of $1 million. Because there are severe penalties (invasive of principal) for early withdrawal of a CD, the church will tap its line of credit should there ever been a financial need. Then, we’ll pay back the line of credit as CDs mature each month.
• My finance committee members were not aware of this program and several of them took it to their companies!
If you have questions or want someone to talk with me about this, I’ll be happy to help.
Lead On!
Steve
• Your church buys a certificate of deposit (CD) for a little less than $250,000 (in order to have any interest earned included in the $250K cap).
• The CD you purchase is actually a CD in First National Bank of Peoria (for example). In turn, First National Bank of Peoria buys a CD from your bank for the same amount. These two banks are cooperating in the CDARS program and have just exchanged money that is fully insured through FDIC.
• You buy as many CDs as you want, all from different banks around the country, to cover your financial assets. The maximum amount you can invest in CDARS is $50 million (I don’t think that’s a problem for anyone).
• The CDARS program does several things:
o It insures as much money as you want to have covered
o It invests the church’s money through one financial institution so you get one bank statement (which means you don’t have to deal with a dozen banks and their statements)
o You earn interest at the going CD rate (which is very low right now – about 1% per year – maybe it will go up soon?)
This is how my church puts this in practice
• My church has a cash balance of about $1.8 million (not unusual for a megachurch)
• We purchased 12 CDs for $100,000 each (that $1.2 million plus the $250K insured through our bank covers the bulk of our demand deposit balance)
• These CDs are laddered so that one comes due every month.
• All interest earned is put into the church’s checking account (which is added to the church’s financial statement and pays for the operations of the finance office)
• Each month our bank notifies me by email and I sign and email bank a document approving the next CD purchase – it is all handled electronically
• This church has a line of credit of $1 million. Because there are severe penalties (invasive of principal) for early withdrawal of a CD, the church will tap its line of credit should there ever been a financial need. Then, we’ll pay back the line of credit as CDs mature each month.
• My finance committee members were not aware of this program and several of them took it to their companies!
If you have questions or want someone to talk with me about this, I’ll be happy to help.
Lead On!
Steve
Monday, May 17, 2010
Change on the Ground
In an earlier blog, I referenced that a predictor of the economy is the amount of loose change you can find on the ground. Good news - in the past two weeks I've found 36 cents! (a quarter, a dime, and a penny)
Does this indicate the economic turnaround is here? Does indicate I've got good eyes? Does this indicate people are careless with loose change? Does this indicate I've got good luck in looking down at the right time? All of the above is the answer - probably more dumb luck than anything!
Lead On!
Steve
Does this indicate the economic turnaround is here? Does indicate I've got good eyes? Does this indicate people are careless with loose change? Does this indicate I've got good luck in looking down at the right time? All of the above is the answer - probably more dumb luck than anything!
Lead On!
Steve
Change
I heard it last week from my financial assistant: of the reported revenues for the prior week (total of $56,000), around $29,000 came in the offering plate. That means that about $27,000 came to the church outside the offering plate: in stocks, online gifts, mailed in offerings, etc. This is a change: for years churches felt that the offering plate was their primary source of revenues. Well, I can document that as of last week, things are noticably changing - only 52% came in the offering plate.
That is huge for churches. Church financial leadership must understand that the way of giving and supporting church work has already changed. If churches are not on the "change bandwagon," then they are leaving some financial gifts "on the table" and not in their offering plates.
So, what are you doing to facilitate giving to your church? Are you making it easy for people to give in new ways? Or are you still relying on the offering plate to provide 100% of your revenues?
Lead On!
Steve
That is huge for churches. Church financial leadership must understand that the way of giving and supporting church work has already changed. If churches are not on the "change bandwagon," then they are leaving some financial gifts "on the table" and not in their offering plates.
So, what are you doing to facilitate giving to your church? Are you making it easy for people to give in new ways? Or are you still relying on the offering plate to provide 100% of your revenues?
Lead On!
Steve
Friday, May 7, 2010
Book Review
Just finished reading "The New Context for Ministry: Competing for the Charitable Dollar" by Lyle Schaller. He wrote this at the end of 2001 and it was published in early 2002. In the book, especially in the last handful of chapters he makes some predications about the future of church economics. It is uncanny how accurate he was and is.
Schaller gives all churches (and non-profits) a warning shot across the bow about the way they've always done church finances versus the new economy and how they need to re-shape their church's finances. It is also hard to acknowledge that the church is not prepared for the future. What is worse, is that no one seems concerned about the future enough to do anything about it.
About once a year someone pulls the fire alarm in my church. It is always a false alarm. Everyone knows it is a false alarm. So, no one moves the exit; no one gets the kids out of the building; no one runs to investigate the source of the alarm. In this book, Schaller is pulling the fire alarm for churches because there is a real fire. Unfortunately, churches believe that "God will provide" the financial resources they need. Well, God will but the church must actively work and search for it.
I recommend the book (even though it is not particularly readable) with an emphasis on his recommendations at the end of the book.
Lead On!
Steve
Schaller gives all churches (and non-profits) a warning shot across the bow about the way they've always done church finances versus the new economy and how they need to re-shape their church's finances. It is also hard to acknowledge that the church is not prepared for the future. What is worse, is that no one seems concerned about the future enough to do anything about it.
About once a year someone pulls the fire alarm in my church. It is always a false alarm. Everyone knows it is a false alarm. So, no one moves the exit; no one gets the kids out of the building; no one runs to investigate the source of the alarm. In this book, Schaller is pulling the fire alarm for churches because there is a real fire. Unfortunately, churches believe that "God will provide" the financial resources they need. Well, God will but the church must actively work and search for it.
I recommend the book (even though it is not particularly readable) with an emphasis on his recommendations at the end of the book.
Lead On!
Steve
Wednesday, April 28, 2010
A Penny Saved ...
I just filled up my gas tank (for future history, today gas was selling at $2.759 in Richmond, VA). Whenever I get gas, I look around the ground for pennies. I didn't find any today. I haven't found any pennies (dimes or nickels) for several months. This is one of my indicators of the economy.
A few years back, when the economy was doing quite well, I almost always found loose change when I filled up with gas. It seems that in those days, it wasn't worth the effort to pick up pennies or nickels and people just left them when they were dropped. Not any more.
About a two years ago I noticed that there were fewer and fewer coins on the ground. About 18 months ago I noticed they were almost all gone and officially, in spring 2009 there wasn't any more loose lying around. Here's my prediction, when you fill up with gas (or go through a fast food drive through) and you see coins on the ground, then you'll know that the economy is back and healthy. Here's my second prediction, you really won't see those coins on the ground until about six to nine months after the economy has turned the corner.
What I'm talking about in the context of churches is this question, "When will people feel generous again?" For church economics, two things have to change:
A few years back, when the economy was doing quite well, I almost always found loose change when I filled up with gas. It seems that in those days, it wasn't worth the effort to pick up pennies or nickels and people just left them when they were dropped. Not any more.
About a two years ago I noticed that there were fewer and fewer coins on the ground. About 18 months ago I noticed they were almost all gone and officially, in spring 2009 there wasn't any more loose lying around. Here's my prediction, when you fill up with gas (or go through a fast food drive through) and you see coins on the ground, then you'll know that the economy is back and healthy. Here's my second prediction, you really won't see those coins on the ground until about six to nine months after the economy has turned the corner.
What I'm talking about in the context of churches is this question, "When will people feel generous again?" For church economics, two things have to change:
- The economy has to turn around in a visible, tangible way. Actually, as of right now (barring a major economic or terrorist event), the global economy is making steady headway out of the mires of 2008-2009. In about 3 months (summer 2010), the US and other first world countries will be on the financially-healthy rebound. But just because things are better financially does not mean people will be charitable or generous.
- The second thing is that people have to feel financially-healthy in order to be generous. The feeling of angst that people have right now (will I have a job tomorrow?, will I have enough to pay my bills?, etc.) must be eased a lot before they will respond to church pleas to give more. Churches need to help educate members to get in a more personally financially-healthy place (Crown Ministries and Financial Peace University). When churches do that, then their members will feel more generous. It takes people about 6-9 months after the economy has turned around for them to feel charitable.
- Are you helping people get their financial house in line with God's plan for their financial house so they can be more generous faster?
- Or are you waiting till you see pennies on the ground as your indicator of when people are feeling more generous?
Lead On!
Steve
Steve
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