Church Finances during COVID-19 (part 2 of 5) – Paycheck Protection Program

friends hugging

As part of the $2.2 trillion CARES Act, Congress approved the Paycheck Protection Program. This program is aimed at small businesses including churches and religiously affiliated non-profits. It is a rare time when Congress authorizes money to be given to churches.

 

I’ve done the application for a few churches and organizations. The amount of money is you can get is dependent on your payroll but in the churches I’ve worked with it amounts to about 5-6 weeks of income. Word is that the program is so popular that it ran out of money in its first few days but Congress is already working to supply additional money.

 

  1. It was launched on Friday, April 3, 2020 and the deadline is June 30, 2020.
  2. Work with your bank, you’ll need to calculate your spending on payroll for the past year, complete some forms, and get some signatures. Your banker is the key to the program.
  3. The PPP provides for a 100% forgivable loan by the US government for 2.5 months of your payroll expenses (based on some calculations). If you have the same or more employees after June through December 2020, then the loan is entirely forgiven.
  4. If you don’t need or want the money – get it anyway. You can always
    1. Return the money later
    2. Give it to a non-profit that you partner with
    3. Use it for missions in your community
  5. The CARES Act also has some changes in charitable giving laws which might be of benefit to some people in your church. Please consult your tax professional to see if these laws would be beneficial in letting you give more money to your church. And even if the laws aren’t in your favor, give anyway – you’ll rarely regret giving money to your church.

 

Lead On!

Steve

Listen to the podcast:
https://anchor.fm/cbf-va/episodes/Church-Finances-during-the-Pandemic-Navigating-the-Financial-Fallout–the-CARES-Act–and-Making-Tough-Decisions-ecfgm7

 

Church Finances during COVID-19 (part 1 of 5)

Issues to address immediately:

  1. Online giving – if you don’t have it, get it now. My currently preferred vendor is Tithely. They can get you set up in a few hours (they say they can do it in minutes but…). Then, promote the heck out of your online giving.
  2. Audio & video technology – This crisis has forced many churches to acknowledge their AV equipment wasn’t ready. PLEASE invest more money into this area. You won’t regret it. After this is over you’ll have really good microphones. With your video equipment, you can improve or launch an online service so that members can watch you whether they’re homebound, traveling, sick, in a retirement community, or just want to watch the service again during the week.
  3. Paycheck Protection Program – the $2.2 trillion CARES Act (and its related additional acts) provide churches federal money. This is the first time the US government has offered money to faith groups. Fill out the forms, work with your local banker, and get the money. If you don’t need or want the money – get it anyway. You can always
    1. Return the money later
    2. Give it to a non-profit that you partner with
    3. Use it for missions in your community

 

I think every church in the world has realized the need for those two things. These are no longer “wants” but actual needs. Yes, it will cost some money but it may be the difference in survival and closing your doors.

Lead On!

Steve

Listen to the podcast:
https://anchor.fm/cbf-va/episodes/Church-Finances-during-the-Pandemic-Navigating-the-Financial-Fallout–the-CARES-Act–and-Making-Tough-Decisions-ecfgm7

Fixed Assets

I take these off every balance sheet I possibly can. There is no reason for a church (or any other non-profit) to track their fixed assets (land, buildings, and furnishings). CPAs will tell you these must be included on a balance sheet and that is simply not necessary for a non-profit.

Fixed assets are usually listed on a balance sheet for the price they cost. If a building costs $1 million, that is the figure it is listed on the balance sheet. Same for furnishings, building improvements, etc. This figure is what it cost at the time of purchase and that is my hang up. Church pews that cost $100 each 50 years ago now have a replacement price of $2,500 or whatever. Yet, on the balance sheet it is listed as $100 less a full-depreciation of $100. That doesn’t mean anything to the average church member reading a balance sheet. Fixed assets never reflect the current amount of money you need to replace that tangible asset and that is the short-coming a fixed asset and depreciation policy and why it can actually harm a church. People will presume it costs $1 million to replace the church’s fixed assets (which were bought 18 years ago) when the true cost is closer to $5 million.

 

Instead, do this. Remove all fixed assets from your balance sheet. Then, when you do your annual audit or present the annual financial report to the church, have a footnote in the document in which you list the insured value of the physical plant and the furnishings and add in the tax value of the property (land/soil is not insurable because it can’t be destroyed). This footnote tells the reader the current value of what you own (presuming you keep your insurance value updated).

Finally, take a camera (such as your phone) and record every room, every cabinet, every drawer, and every space in your building. It is so easy to do with modern smartphones. Two people can do an entire church in a morning (or a day if it is a very large church). Then, store that recording in different locations or in the cloud so it can be used if need for insurance purposes. Keep multiple years’ recordings, too – don’t discard one after you get a new one.

Please keep your balance sheet simple – no fixed assets, cash only, and keep restricted funds to as few as possible. Thanks!

Lead On!

Steve

Columbarium – Part 6: Moving?

One of the serious considerations that each church faced was moving the columbarium should the church ever relocate and the property be sold. As cities and suburbs change, churches wax and wane; some are closed for good and some move to a new location. In either case, what would the church do if moving the columbarium was necessary?

Relocating the Church

  1. The columbarium committee secured a commitment from the church leadership at the time that if the church ever moved, then the columbarium would go to the new location. That leadership will certainly be gone when/if the church ever moves but at the time that was comforting to the people who were buying niches.
  2. The niches were in a brass box – a series of about nine rows and seven columns which created 64 niches (singles and doubles). This brass box is exceedingly heavy and sturdy.
  3. The decision was made that should the church relocate, then a mason would chip away at the bricks surrounding the brass box of niches, each box would be lifted out and moved. At the new location, a new columbarium would be constructed and house the brass boxes.
  4. As to the areas where ashes were scattered or interred in the ground, the committee said that as much dirt as possible would be transported to the new location and placed in a new area set aside for ashes. It was recognized that not all dirt could be moved but that every effort would be made to move as much as possible in a dignified way.

Closing the Church

  1. Should the church close, the decision was that the church would approach a cemetery and make arrangements to move its niches and dirt. The sale of the church and the perpetual fund would cover the moving costs and the permanent fund at the cemetery.
  2. Then, the move would follow steps 3 and 4 above.

The committee was thorough. We wanted to ensure we created a sacred space for the eternal rest of people created in God’s image and then ensured that they would be taken care of forever. The committee achieved that and then disbanded. We gather now only when we meet at the funerals of friends but we also are glad that we made a place for them to be and their families to visit.

Lead On!

Steve
www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

Columbarium – Part 5: Extra Info

I kept 2-3 urns in my office for quick access and so I didn’t have to get one right away when someone died. Don’t let families go buy their own urns – they may not fit. I also had 3-5 niche face plates in my office. When someone died, I took the niche plate to the engraver who had a pretty quick turnaround. When the funeral day came, I removed the blank niche plate and after the service put up the engraved one. If a spouse of someone already in the niche died, then I took the engraved niche plate off, put up a blank plate, got the niche plate engraved with the second name, and returned it in time for the service.

For tracking purposes, I created a spreadsheet in which I color-coded which niches were available, which were sold but not yet occupied, and which niches had urns in them. I did the same for a place where ashes were interred in the ground (by the way, it takes three years for ashes to totally be absorbed so on my spreadsheet I marked those plots as being occupied for a three-year term).

I installed a glass-enclosed bulletin board on which I posted the spreadsheets for the niches and for the interment area. This allows passersby to see what spaces were available and which had been claimed (either occupied or paid for but not yet occupied). There was some marketing material there, too. This bulletin board was right next to the door leading to the columbarium garden.

Lead On!

Steve


www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

Columbarium – Part 4: Where to Put It

I’ve led in the construction of two columbaria, one at a Baptist church and another at a Presbyterian church. There was no denominational difference. Our respective goal was to honor the saints and provide a place of sanctuary for people visiting those saints.

In each case we found a secluded area of the church’s grounds. One was an existing patio immediately outside the sanctuary and the other took a grassy semi-circle at the end of a building. The patio was far cheaper because the walls and concrete flooring were already there; the masons just had to build up a structure into which the brass niches were installed. The other was a much larger construction project requiring about six months of work. It was designed by a landscape architect; it required a lot of bricks, major landscaping improvements, plumbing for a waterfall and electricity for some uplighting. It also contained seven sets of niches whereas the first one I did only had one set of niches.

Both columbaria provided a quiet place even though they are both near a major street. One of them has a waterfall which covers the noise of the nearby road and both have lots of greenery to enhance the atmosphere and provide privacy. Both have benches for people to sit while they visit and they are open to the public at all hours-the gates are never locked. The seclusion of each one ensures that for the most part only church-goers even know the columbarium is there.

In both cases the columbarium has enhanced the landscaping of the church. Each has been a wonderful addition.

Lead On!

Steve


www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

Columbarium – Part 3: How to Pay for a Columbarium

Here are two ways to build and fund a columbarium that I used.

  • The columbarium was built in phases due to the construction costs. Phase I cost $60,000. The pastor asked three families to each give $20,000 in exchange for a tax-deductible contribution and a double niche. All three families gave the money and we built it a few months later. As people purchased niches, that money would pay for the next phase until all phases were constructed. Sales from the sales phase would then become the source of the perpetual maintenance fund.
  • The columbarium was built all at once for a cost of $225,000. Solicited donations and sales of niches generated about $75,000 initially. The church was fortunate to have over $150,000 of reserves. In lieu of borrowing money from a bank, the church loaned itself the money and then as niches were purchased, the loan declined. At some point, the loan was paid off and then all subsequent money was used for the perpetual maintenance fund.

In all cases, handling the money for a columbarium requires careful record-keeping to ensure you know which niches or plots have been sold to whom. You need to keep copies of the agreement you have with each family, know where their money has been placed, and then have easy access to it when the time comes to inurn or inter a loved one for any expenses (engraving, buying urns, etc.).

Lead On!

Steve

www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

Columbarium – Part 2: Funeral Costs and a Columbarium Niche Sales

Cremation is the safest and cheapest way to bury a person. A casket funeral can cost upwards of $15,000 (for the casket, the funeral home, the lot and concrete vault, etc.). That is money that is literally poured into a hole in the ground. Inurning (in a niche) or interring (in the ground) cremains can cost several thousand but it can also be done literally free.

  • For a few thousand dollars: the body can be cremated, placed in an urn, and then in a plot in the ground.
  • For free: the body can be donated to a med school which will cremate it; when they’re finished, they’ll return the ashes to the family who can then scatter the cremains

The cremains are placed in the columbarium in one of three ways:

  • In an urn which is set into a niche
  • Buried in the ground
    • In an urn (usually biodegradable) which is set into the ground and covered with dirt and grass, or
    • In a hole in the ground which is covered with dirt and grass
  • Scattered on the ground and grass

I built a columbarium at one church where we set aside a section of the wall for plaques of people whose ashes were scattered or interred elsewhere. One teen’s ashes were scattered at the beach while another member’s ashes were placed at Arlington National Cemetery near DC. In each case, the family wanted some remembrance of their loved one at the church and we were able to meet that need.

For each of these, we had different pricing levels. We sold niches for singles and spouses (kiddingly referred to as “double-wides”). We sold plaques to memorialize people whose ashes were elsewhere. We also sold interments (placing the ashes in the ground). In all instances, we standardized the wording format on the niche plates and plaques to ensure uniformity. We also sold the urns to be sure they fit inside the niche. I did encourage people with niches to personalize the urns and/or to place personal effects in the niche such as a picture or word tribute (both laminated). Some families did this as part of their communal grieving process.

The columbarium is a part of the family’s grieving and healing. That garden is a place of solace and remembrance.

Lead On!

Steve

www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of