Saying Thanks!

Posted on January 5, 2013 Written by

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

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

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

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

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

Filed Under: church administration, communications, leadership Tagged: , ,

Overhead Costs?

Posted on January 1, 2013 Written by

What is the overhead cost for a church and what percent of the budget should it be? That’s not easy to answer – there are lots of variables. Take a look at this article to see what this research shows.

http://www.greymatterresearch.com/index_files/Nonprofit_Overhead.htm

Why is this important? Because you should know what are your fixed costs and your variable expenses (although, at some point, ALL costs are variable if the church closes it doors).

Overhead costs are expenses which can be made more efficient in many cases. Take a look at what you’re spending your money on and see how you can save some money. Your only regret will be in not having done it sooner.

 

Lead On!

Steve

 

Filed Under: budget, church administration, church finances Tagged: , ,

Church Credit Cards

Posted on December 24, 2012 Written by

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

Filed Under: church administration, church finances Tagged: ,

RACI

Posted on December 18, 2012 Written by

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

Filed Under: church staff, leadership, wisdom Tagged: , ,

The Church Lobby

Posted on December 4, 2012 Written by

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

Filed Under: buildings, facilities, young adults Tagged: , ,

Personnel Comp Letters

Posted on November 27, 2012 Written by

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

Filed Under: church staff Tagged:

5th Gift Letter

Posted on November 20, 2012 Written by

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

Filed Under: church finances, generosity Tagged: ,

Gift Letters or Statements of Contribution

Posted on November 14, 2012 Written by

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

Filed Under: budget, church finances, church financial statements, communications Tagged: , , ,
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