For the past 25 years I’ve lived in 2 cities: Birmingham, Alabama and Richmond, Virginia. These two are integral to African-American history in the US. Richmond was the capital of the Confederate States of America and one of the centers of the slave trade. Birmingham was founded after the Civil War but was a focal point of the Civil Rights Movement and infamously had a bombing in September 1963 which killed four girls who were at their church (the family of one of those girls worshiped at a church where I worked).


Bombingam – it will be a hundred years before it lives down that name – is still living its racist history. Here’s what I witnessed living there from 1995-2005

  • A bombing of a women’s clinic just six blocks from a church I worked at. The bombing killed a police officer and maimed a nurse.
  • I regularly drove on a bridge under which the 1963 bombing was planned
  • I attended briefly the trial of one of the 1963 bombers. The prosecutor is current US Senator Doug Jones; his opponent this November is an ardent support of Donald Trump. Doug will probably lose – to a man who endorses a racist president.
  • I supervised dozens of African-Americans. I always treated them with the same respect I treated everyone else – the way I wanted to be treated.


  • Hollywood Cemetery is the final resting place of over 18,000 CSA soldiers and it has a CSA flag (not the battle flag)
  • Monument Ave was a real estate venture in 1920 and to attract home builders, they erected statues of CSA generals, all sons of Virginia. Those statues honor men who were traitors to the USA. A few years ago a statue of Arthur Ashe was added, but the rest of Virginia’s history is completely ignored on Monument Ave.
  • Maggie Walker got a statue in the city a few years ago. She was the first female bank president and the first African-American bank president. But it took almost a century after her death for her to be honored.


These cities have scars. Your city has scars, too. They may be covered up (16th St Baptist Church was repaired after the bombing) or they may be on a pedestal (as Robert E Lee is in Richmond), but they’re there. Acknowledge the scars, learn from them, talk about them with others. Never forget what made the scars lest you cause more scars.


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Pros & Cons of Changing Banks

I’m a proponent of using a locally based financial institution for your banking needs. National banks should be for national companies (Red Cross, Apple) but most churches can be served effectively by their local bank. Local banks are usually cheaper (fees are less) and are far more helpful because their leadership lives in the community.

Here is a list I drafted recently for a church that is considering changing banks. I encourage your finance committee to consider moving to a local bank (if you’re not there already).


  1. LMNOPbank is headquartered in our community so we’re supporting a local company.
  2. LMNOPbank has a much better reputation for customer service.
  3. LMNOPbank is where the church’s endowment funds are invested so all church funds would be in the same institution.
  4. LMNOPbank is easier to change signatories – take the signature card to the church and get everyone to sign, and then return the card to the bank. SunTrust requires all signatories to appear at the bank on the same day.
  5. Our current bank’s customer service rep for us is located in their HQ which is not located in our state.
  6. LMNOPbank has a courier service which picks up deposits in the church and takes them to the bank.


  1. Changing banks put a LOT of work on the finance office
    1. Changing all auto-draft payments
    2. Changing payroll drafts
    3. Changing online giving
  2. Changing bank has a cost – buying new checks and deposit slips.
  3. Reconciling several bank accounts for a while.
  4. Waiting for checks to clear from the old bank account.

 Treasurer’s Recommendation: move to LMNOPbank as soon as possible

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Considerations When Getting a New Copier

  1. Start the process of getting bids for a new/replacement copier about 4-6 months before the current contract expires. It will take about 2-3 months to get the bids in and make a decision. Take delivery of the machine within a month of the end.
  2. Do NOT let a new vendor “eat” the current lease. They won’t eat it, they’ll just add it to the monthly bill. Let the current lease expire or come within 2-3 months of expiration before getting a new one.
  3. Ask other churches for references of companies and copiers they like. Ask those for bids.
  4. Remember, a copier is a commodity. There is essentially ZERO difference between today’s machines. THE difference is in service. Thus, when getting quotes, it is vitally important to talk with the VP/Director of service to ask about the number and types of problems that each machine has. The VP of sales will give you a nice pitch (that’s his/her job) but the VP of service will shoot straight(er).
  5. Get a 48 month lease; 36 months are too expensive and 60 months are too long. By month 42 people are ready to get a new machine; around that time, many machines start breaking down more frequently.
  6. Get a quote for the base model and then get quotes for the add-ons (hole punch, staple, saddle stitch, etc.). Most machines do 11×17; desktop copiers can’t do that but 99% of office copiers do bigger copies.
  7. To figure out how many copies you current use in a moth, ask your current vendor for that info. Most copiers today let the company login and billing info such as how many B&W versus color copies were printed that month. When you ask the company for the totals, let them know you’re putting this contract out to bid. When they know they may lose their copier contract, they’ll work harder to keep the contract.
  8. Get info from the current copier company about the cost of returning a machine if you don’t renew with them. Some companies charge a shipping fee (I’ve paid $750) for old machines. Make sure the new lease doesn’t have that clause.
  9. Financially, I was most satisfied with the leases that made you pay for the copier plus the actual number of B&W/color copies. The old method of building in X thousand copies was simply a way to pad the monthly base fee.
  10. You should pay somewhere in the range of 2/10ths to 1/2 a penny per B&W and 3 to 5 cents per color copy. Anything more than that is wrong.

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Confidentiality Agreement

Every church has a lot of confidential information from employee wages to member contributions to counseling confessions. While staff are aware of the need to protect this confidential information, churches need to do a better job in asking their lay leaders to keep confidence in the info they see. I suggest that all decision-making committees and teams (elders/trustees/board members, personnel, finance, nominating, endowment, etc.) sign a confidentiality agreement.


Sample Agreement

I hereby acknowledge that as a Board Member for Grace Family Fellowship, I will have access to confidential information concerning Grace Family Fellowship, including but not limited to board discussions and initiatives; information on Grace Family Fellowship employees, donors, contracts, investments, and vendors; and legal, financial, and other proprietary information about the church.

I agree that I will not at any time – during my tenure on the Board, or in the years following that tenure – divulge any such confidential information, nor transfer any such confidential information to any third party, nor use any such confidential information for the own purpose or for any purpose other than in connection with my authorized role as a Board Member of Grace Family Fellowship, unless such disclosure shall have been approved in writing in advance by Grace Family Fellowship.

I agree that upon completion of my participation as a Board Member of Grace Family Fellowship I will return to Grace Family Fellowship all confidential information on the church in my possession or under my control.


Board Member Name



Board Member Signature                                                                               Date


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Idle Cash

Every church should have one bank account and one investment or money market account. Anything more, except in special circumstances, is unnecessary. Here’s how I feel it should work.

The checking account is where all money is deposited as it is received. All money – no exceptions. The money market account is where the church’s “extra” money sits until it is needed. I know – there is no such thing as extra money. Here’s what I mean – the average church needs about 60 days’ worth of cash in its checking account, at most 90 days. All cash over that should be moved to a money market account where it can earn a little interest.

Then, as money is needed in the checking account, it is transferred from the money market account. And, as the church receives “extra” money (think the December rush) it is transferred to the money market account.

This keeps the church with a solid balance in the checking account and its “idle cash” is earning interest which can be used for the church’s operations.

What are the exceptions? Glad you asked. Here are a few and I’m sure you’ve got others:

  • A capital campaign where you want to have a checking account for that campaign. I suggest you also have a money market account for that account. Then, as you receive the initial, pre-construction influx of money the bulk of that is moved to the money market and then, when the construction bills arrive, the money is moved to the campaign checking account to pay the bills.
  • An account which is used only and entirely for pass-through funds and by having that checking account it will help the bank reconciliation be cleaner and clearer. Here’s an example:
    • An account which is used to receive online gifts from an auction or sale of materials. Having this account means you can more clearly determine a sale versus a gift that in the main checking account. E.g., you receive $20 in the “sales” account you’ll know that was for a book or retreat versus a tax-deductible gift.

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PPP Loan Accounting (corrected version; percentage used for payroll v others)

The SBA is still working on how PPP loans should be reported back for forgiveness. The SBA made changes to the PPP loan guidelines at 9 p.m. the night before the PPP began; they will continue to make changes to the PPP for the duration of the program. In the meantime, there are some accounting practices you can do to record your PPP loan. Once you receive your loan, you have 8 weeks to use it for payroll (at least 75% of the loan), utilities and mortgage interest (no more than 25% of the loan).



Keep it simple is THE principle. You need to create two new accounts in your chart of accounts. One is a restricted fund on your balance sheet and the other is a new revenue line in your income statement.

  1. New restricted fund – reasons to have this:
    1. That account will show at any given time how much you need to use before the 8 weeks are up.
    2. If you need to return the money, then it is on your balance sheet and not on your income statement.
    3. If you post the entire amount on your income statement at once, it will skew your income for that month.
    4. So that you can show your banker how you used the money explicitly for the intended purpose by gradually transferring money from the balance sheet to the income statement.
    5. Some banks are asking you to open a new bank account but you don’t need to do that, especially since the money will (hopefully) be gone within 8 weeks.
  2. New revenue line – reasons to have this:
    1. The loan is a significant amount of money and you don’t want that amount comingled with your tithes and offerings.
    2. You need to be able to see months and years later what the amount was, especially when your audit comes around.
    3. You can use this revenue line to prove to your banker that you used/transferred funds to your income statement and the funds matched exactly the payroll, utility bills, and mortgage interest.
  3. Receiving the loan
    1. Accounting: enter the loan as a debit to your bank account and a credit to the new restricted fund.
    2. That’s the only credit entry you’ll make to that account – just one deposit. The rest of the entries are withdrawals when the money is used and transferred to the income statement.
  4. Spending the loan
    1. Accounting:
      1. When you make the payments, make a copy of each invoice and payroll register
      2. Then, make a journal entry transferring that exact amount from the balance sheet to the income statement (debit to the new restricted fund and credit to the new revenue line).
      3. That’s it. You’ve now accounted for how you used the loan.
    2. You won’t have any changes to your expense accounts. Pay your payroll, mortgage interest, and utilities as usual and record them as usual. You don’t need to do anything different.
  5. Record keeping: this is the most important step; without this all your work is for naught.
    1. Keep a paper folder with documents (payroll register & summary, health insurance, retirement invoices, utilities bills, mortgage statement, etc.) which can be shown to your banker to get your loan forgiven. You may need to highlight on your payroll summary which items you’re using toward the loan to avoid the mandate to not include FICA.
    2. Keep track of all your expenses, label the heck out of them – write on them the specific posting number from your accounting software or create a system. You want your banker to be able to look at your documentation and within 5 minutes say the loan is forgiven.


Again, keep it simple. Your banker is currently busy with the second round of PPP loans but at some point (before the final visit) have a checkup with your banker to ensure she or he knows what you’re doing and is good with it.


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Pros & Cons of Changing the Fiscal Year

Changing a church’s fiscal year away from a calendar year is hard. Usually it requires changing the constitution and that alone means multiple presentations to the church membership. It also requires changes in the budget year, the way committees and teams plan and spend, the way the Finance Committee reports to the church, etc. But it can be beneficial to the church’s finances and not ending December with “will we make it” mentality.

I recommend a church do an analysis to determine the cost/benefit of such a change. Here are some points to consider.


  1. Allows the church to use the end of year gifts into the next year.
  2. Avoids the “Will we make it?” mentality associated with getting end of year gifts and all that uncertainty.
  3. Moves the budget process to the spring instead of the summer and early fall.
  4. Aligns the fiscal year with the school year which in society is the beginning of the year.
  5. Allows TCCC to have their fiscal year aligned with their school year.
  6. Pushes the year-end financial reports away from January and the requirement to get that done even if staff is sick or the weather is bad.
  7. Moves the year-end and year-beginning work on the creating/storing folders and files; inputting new budget into the financial software; adjusting personnel wage changes in payroll; etc. away from the holiday season.
  8. Every five years allows the audit to be done during the low auditing season. High season is tax season (February-April).


  1. A lot of work initially to adjust the fiscal year, the budget, and communicate with all the vested parties and get their input on the process and its desired outcome.
  2. Affects several committees/teams and changes some routines:
    1. Admin Board and Finance – new budget timeline, end of year reporting, etc.
    2. Personnel – affects when salaries are changed and reviews are done
    3. Constitution – requires a constitutional change
    4. TCCC – moves their budget
    5. Nominating – may affect them (uncertain about this)
  3. Moves away from a clear fiscal year = calendar year.
  4. There is still a last minute, year-end rush to get gifts which still keeps the staff busy at Christmas, New Year’s, and the first few weeks of January.

 Treasurer’s Recommended Fiscal Year: August 1 through July 31

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Church Finances during COVID-19 (bonus)

This came to mind after I wrote the other posts.

IF (huge IF) you had planned any major building improvements this year AND IF you have the funds to do them, then I encourage you to do them while your church building is closed.

Some churches need to

  • do HVAC upgrades
  • paint rooms and hallways
  • install new carpet
  • have a deep cleaning of the building (a good idea to do now anyway)
  • overhaul your grounds
  • etc.

If you had planned to do something like this, take advantage that your building is closed to the public and you can do some building work and be messy and not have to clean up by Sunday.

A few years ago I had a 2100-seat Sanctuary painted. The painters built the scaffolding every Monday and dismantled it every Friday and that was lost labor. If I had been able to leave the scaffolding up over the weekend or even let the painters work on the weekend, it would have saved time and money.

Here’s a secret tip from when I painted the Sanctuary – we had banners hanging in there. I took down these pretty big banners and we painted sample colors behind them. That allowed the color selection committee to see what it would look like on a big section of the wall in different lighting (morning, afternoon, and evening). Then, before Sunday we hung up the banners and no one knew there was a different color behind it. After a week or two of painting behind the banners, the committee chose the color and we started painting. (Alas, the four week paint job turned into six weeks because we had a rash of funerals and had to stop painting and put the Sanctuary pews back in place!).

Keep up the wonderful work you’re doing during this tough time. Take a few moments each day just to walk around – your home, your neighborhood, and maybe your church building. Walking is good, walking and talking to God is better. I’m praying for you all and I know you’re doing the same for your colleagues.

Lead On!