Finance Staffing Costs

Posted on June 14, 2012 Written by

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: 3% to no more than 4%

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 3% 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

Filed Under: accounting, budget, church finances, church staff Tagged: , , ,

Strategic Budgeting for a Young Marrieds’ Ministry

Posted on May 18, 2012 Written by

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

Filed Under: budget, church finances, young adults Tagged: , ,

1Q2012 Statement of Contribution

Posted on March 22, 2012 Written by

One quarter of 2012 is almost over so you need to prepare now to send out your first quarterly contribution statement of the year. Some churches send out statements only once a year – let me encourage you to send out statements each quarter plus one more:

  • 1Q2012 – send out in the first 10 days of April
  • 2Q2012 – send out in the first 10 days of July
  • 3Q2012 – send out in the first 10 days of October
  • 4Q2012 – send out the yearly statement by January 31

PLUS

  • Send out a statement for the first eleven months (January through November) in the first 10 days of December. Why? So that people can see what they’ve given or not given so far in the year.

But let’s get back to 1Q2012!

Sending a statement out in early April makes sense for several reasons:

  • Use this opportunity to send a letter with the statement of contributions explaining to people what their money has been used for. They want to know what the church did with it – so tell them all the good things you’ve been doing and are planning to do. Share with them a couple of compelling stories – that will make all the difference in the world to some readers.
  • At this time of year (tax-filing season in the US), people’s awareness of how much they’ve given or not (and thus able to deduct from their tax return) is heightened. Since many people have just completed their annual tax forms, they’re making promises to themselves to give more away to charity so they can give less to the government. Sending a letter in early April gives them a great reminder to give a check to their church.
  • Easter is typically in early April. Most Christians will come to church on Easter and they’ll usually hear a sermon about God’s gift to us through Christ. They will hear about giving and sacrifice – this letter is a way to encourage them to tangibly respond with their own gifts.
  • Gentle reminders throughout the year of how much people give to their church are good for both the church and the donor. These reminders are not heavy-hitting or guilt-inducing. These letters are simply nudges in reminding people to be financially faithful to their church – and you’re sending these letters to the people who have already “bought in” to the vision of the church, they’re already giving!

So, here’s your homework for this weekend: find two great stories about what has happened in your church these past three months (since Christmas), put them in a letter, and send the letter with the quarterly statement of contributions.

Oh, one very important fact: send your letters with first class postage. Yes, that is a lot more expensive than bulk mail. But realize that the “open rate” (as opposed the “throw in the trash can rate”) of first class stamped envelopes to bulk mail envelopes is something like five to one (don’t quote me on that ratio, but it is way up there). People will open an envelope with first class postage far more often – and you want people to open envelopes to read the letter and the statement of contributions. Okay, back to your homework.

Lead On!
Steve

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

Outrageous Generosity

Posted on February 12, 2012 Written by

Generosity is one of my favorite words because it so describes God’s nature. Actually, outrageous generosity is a much better descriptor. Think about – humans have offended and humiliated God in every possible way yet his response is pure love. What’s up with that? It’s a good thing humans are created in God’s image because if God had a human image, then God would react in a vengeful way and who could blame him after they way humans have treated him?

So, let me encourage you to think about God’s Outrageous Generosity. Actually, do more than think about it. I challenge you to do a sermon (or sermon series) on this topic. And the best time to start with it is Easter Sunday 2012. Take the month of April and preach on this subject and challenge your listeners to “be imitators of God,” the person in whose image they were created.

Humans are born with two life-sustaining instincts (something that every human baby does): grasping (taking hold) and sucking (taking in). God’s instinct is to give everything away (read the Bible, you’ll see that pretty soon). The greatest example of how God personified Outrageous Generosity was on Good Friday on a cross – Jesus opened his hands for the spikes and his arms for the cross and died for all humanity. That’s OUTRAGEOUS!

Now, how can you be generous, even outrageously generous?

  • In your personal life
    • Be generous by spending more time with your kids helping with their homework
    • Be generous with the time you give your spouse; go on a date once a month and a weekend away at least once a year
    • Be generous with other generations: call your parents or kids in college at least once a week
    • Be generous with yourself: take your family on a memorable vacation – you need to get away from work and be with the ones who love you and whom you love
    • Be generous in creating memories. Every present you give on Christmas morning will end up in a landfill but the memories you give them will last a lifetime!
  • In your professional life
    • Be generous with the credit at work: give someone else credit for a job even though you did 90% of the work
    • Be generous with someone else’s career: let someone else get a promotion
    • Be generous with your words of praise: encourage someone talented to start their own business or go for a new career
  • In your pocketbook
    • Be generous in how you give, not just how much. Think long and hard about the recipients and even do some homework by calling, visiting, and even studying the financial records of the organizations who get your money
    • Be generous with why you give. In the US we get a tax break for our gifts but that shouldn’t be the reason for giving. While giving benefits other people, giving actually benefits you far more because it makes you wrestle personally with the amount and recipient of your hard-earned cash. Get the right motivation for giving and a tax-break (more money for you) is not a good enough reason.
    • Be generous with when you give. Yes, you can wait till you die and leave everything in your will. That’s kind of like saving all the Christmas presents and giving them away in your will. Isn’t the greatest gift of Christmas morning seeing the joy in others when they open a gift from you. Give NOW so that you can see the joy that others experience.
    • Be generous with how much you give. Believe me, you won’t miss it.
  • In your faith
    • Be generous with the knowledge that every person is searching for God. Humans by nature seek God (we’ve never found chimpanzees worshiping or creating any type of religious icon!) – that makes us unique among all animal (every single human culture on earth has some form of faith).
    • Be generous in your own search. Most people inherit a faith from their parents. I believe a faith that isn’t questioned isn’t a faith worth having. Ask hard questions even if it means wondering about the foundations of your faith. And when you have solid answers, hold on to that faith
    • Be generous in asking others about their own faith. It’s a tough conversation but if you care about someone, it’s a necessary one. Everyone is seeking something; encourage that search.
    • Be generous with God. You may have questions about God and you may not like him at all for a bunch of reasons. But God can say the same thing about you and yet he loves being with you. Why not give God a chance and spend some time together?
Lead On!
Filed Under: budget, generosity, strategy Tagged: , ,

Fundraisers for Youth Events

Posted on October 19, 2011 Written by

 

Fundraisers have two purposes:
  • To make money in an effective and efficient manner
  • To build unity among the participants and interested people around a specific goal

 

All fundraisers need to have a balance between these two purposes and do it in a fun way (that’s the “fun” in fundraising). Too often, the group putting on the fundraiser focuses on one purpose to the neglect or even exclusion of the other purpose. That is not good and will harm future efforts. For instance, if you put on a concert and ask a bunch of people to work really hard in all the areas of the concert but then receive only $350 after all that effort, the volunteers will probably come away disillusioned about the results (but have good memories of the event). They achieved one purpose but nearly killed themselves without achieving the other purpose. On the flip side, if you put on an event and raise lots of money with little vested support, people may not feel as committed to the cause but feel incredibly proud of how much money they raised. Balance is good. Balance is key.

Another key to fundraising is to spread out the “ask” over a period of time such as several months. Some organizations do a “blitz ask” but they’ve done months of preparation (and received gifts during the prep time, too). Success is always, always a factor of how much effort you put into it. Every good fundraiser will require lots of effort on everyone’s part – make sure that you get enough “return on your investment” to have made all that effort worthwhile.
Some fundraising ideas for youth events:
Penny War
  • Boys versus girls. Every penny placed in the girls or boys jar is one point towards them. Every dollar added to a boys’ or girls’ jar is a negative 100 points towards them. After a month of war, the winners will be decided by who has the most points. The loser will then have to prepare dinner for the winners.
  • This is easy to do and raises a few hundred dollars without a lot of effort. This is a good balanced way to raise money in that every week you can promote it and even have a running total. Frankly, I do suggest that the money jars are emptied each week for two reasons: to announce the weekly running totals to egg on each side and to not have money sitting around in a jar which can walk off.

 Spirit Nights

  •  I know that both Chik-Fil-A and Tropical Smoothie have spirit nights we can tap into where during a certain time period, receipts taken will yield a percentage (normally 10 to 15 percent) to the student ministry. TS will even let us host a plinko game which raises a lot of funds.
  • The secret to working with local vendors (and some companies will sponsor car washes) is volume. The kids are going to have fun at the store and that will build unity – that is certain. How much money is raised is entirely dependent on getting people to come and/or buy tickets ahead of time. Kids need to be “in my face” about buying tickets. This a good idea and it can be held multiple times between now and when you need the funds without getting old and stale.

Yard Sale

  • The church rents out parking spots in the parking lot where people can host their own yard sale on the church’s property (the church makes money off the rent of parking spots). In another part of the parking lot, the church sells items that people donated for the yard sale (the church makes money off the sale of items). The church can sell concessions and make some money. There is always a fear of someone selling something offensive, but that can be addressed with the individual and you can let them know what we won’t let them sell (like porn magazines or offensive t-shirts).
  • This requires a LOT of effort and extreme coordination. Advertising is the key, too – get the word out that there is a community yard sale and people will buy reasonably priced parking spots ($10 is suggested) if they know there will be crowds coming. This can be a huge unity event for the youth as they work ahead of time and spend the entire day helping. It will raise at least a couple of thousand dollars.

Auction

  • This is my favorite way to raise money for youth functions. People bring in items that are of good value – other items should go to the yard sale! In one evening, there is a silent auction followed by a live auction (with a real, live auctioneer). Every year I’ve seen this done, the church raises over $12,000. The youth sell tickets beforehand and they drum up interest; the youth spend the Sunday and Wednesday before moving items; a team of volunteers helps coordinate the event; the youth work the auction by serving food and telling their story from the stage while people mill around.

Scholarships

  • Asking people to sponsor a kid or part of a kid for a trip always works. By this I mean informing people how much it will cost and then flat out asking them to fund ¼, ½, or the whole cost of a trip. People will do that. Afterwards, you can have the kid(s) that got the scholarship(s) to write a thank you and say how much the trip meant to him (them).

Sunday morning doughnuts

  • Krispy Kreme will sell doughnuts on the cheap for fundraisers and then you can re-sell them on a Sunday morning by the box.

What other successful ideas have you been a part of?

Lead On!
Filed Under: budget, church administration, church finances, young adults Tagged: , , ,

Budget Percentages

Posted on September 12, 2011 Written by

Below is a recent email exchange with a friend of mine (names omitted).

 
Email Question:
I have a church that wants help examining their budget allocations by categories: missions, personnel, programs, etc. They want to look at similar size churches with similar size budgets. They want to know whether their allocations are in line for their type of church. Basically, they want to benchmark their distributions. They suspect that their personnel budget at 67% is high, but the church doesn’t know any different. And they want to know why they do not have any money to do actual programs.
 
Do you have access to any sort of database like that from any of your connections?
 
My response:
  1. No, I don’t know of any authoritative written source of ratios. Sorry.
  2. My experience tells me the following makes commons sense

 

a.      Personnel
                                                              i.      Range of 40-60% of undesignated receipts
                                                            ii.      Ideally about 50%
                                                          iii.      This includes the ministers and administrative assistants – people key to accomplishing the goals, mission and vision of the church
b.      Facilities
                                                              i.      Range of 15-25% of undesignated receipts
                                                            ii.      Ideally about 20%
                                                          iii.      This includes facilities staff costs
                                                          iv.      The percentage will be higher if a church has debt; lower if there is no or low debt.
                                                            v.      A church should spend annually about 2% of the cost of replacing the building on maintenance. If you have a building worth $1 million, then spend about $20,000 on maintenance. The rest of the percentage will be spent on salaries, utilities, cleaning supplies, commercial property insurance, capital reserve funds, etc.
c.      Programming
                                                              i.      Range of 20-35% of undesignated receipts
                                                            ii.      Ideally about 30%
                                                          iii.      This includes education, worship, missions, funds budgeted for allocation to outside organizations (Cooperative Program/Missions), etc.
That being said, these percentages go wild in various types of churches. New, emerging, highly growing churches have very high salary percentages and loads of debt. Older, established churches have paid off their debt so their programming is high and salaries have stabilized in the 50-60% range. While there is no “one size fits all” there are well-grounded rules that will help a church stay out of fiscal trouble. Hope this helps.
Lead On!
Steve
 
Filed Under: accounting, budget, church finances, church financial statements, leadership, strategy Tagged: , , , , ,

Church Insurance

Posted on August 28, 2011 Written by

On 9/11/2001, the insurance industry took the largest hit ever – over $40 billion dollars in claims – as a result of the terrorist attacks on the twin towers, the Pentagon and the planes. The insurance industry raised their premiums in an effort to recoup their vast losses – commercial insurance prices rose a lot in 2002 and then stabilized. In an effort to help the insurance industry, Congress also permitted the industry to levy a terrorism fee on new insurance policies (this authorization for this fee expires in 2014). As a result, church’s have been paying more for their commercial property insurance for ten years.

Actually, the price increases for churches are not entirely attributable to 9/11. There were two other series of incidents in the 1990s that exacerbated church insurance premium hikes. The Roman Catholic Church (and other church’s, too) had a series of well publicized pedophilia scandals which then tainted all faith institutions and raised premiums. There were also a number of church vans that tipped over and killed several people. 9/11 was the third of unrelated incidents which affected church insurance.

Since 9/11/2001, every commercial property insurance has carried a terrorism clause and premium. The dollar amount isn’t much and is rarely noted by the policy holder and not often mentioned by the insurance agent. This is a voluntary payment – churches can exempt themselves from paying this by simply stating they do not want this coverage. The coverage is automatic unless the church specifically states it doesn’t want the coverage. Please call your insurance agent and have that coverage removed. In my opinion, churches don’t need it because of the very limited coverage it offers: the terrorist attacks must be perpetrated by US citizens and acknowledged as terrorist acts by Congress are the only ones covered. Therefore, nothing on 9/11 would be covered but the Oklahoma City bombing would be covered.

In recent years I put my church’s insurance contract out to bid. Here’s what I learned. We paid over $42,000 for five consecutive years. In the year that the contract went to bid, the incumbent agent came back with a quote of just over $28,000 – a reduction of 35%. Two other bids came in at the same price so I knew that was a reasonable amount. In December 2010, a year after the initial bidding, I put the contract back out to bid and got back a quote of $24,500 – even more savings. We have shaved about 45% off our insurance contract.

With that savings I paid for a current valuation of the church’s property so that we have an accurate estimate of the worth of the church’s buildings and furnishings. I also got a video inventory of every room, cabinet, closet and office in the church. We made several copies of that video inventory and placed the copies with different people in their homes (away from the church), including our insurance agent. I’m in favor of inventories but not paper ones – when it says “10 chairs” there is no knowing the worth of those chairs. An image of those chairs allows for better accuracy in getting an insurance settlement.

So, please do the following

  1. Call your insurance agent today and delete the terrorism coverage on your church.
  2. Put your church’s insurance contract out to bid as soon as possible. Get at least three quotes and chose the low bidder.
  3. Get a current valuation of your church’s PP&E (property, plant & equipment)
  4. Make a video inventory of your tangible assets and have copies made for several people

Lead On!
Steve

Filed Under: budget, buildings, church finances, facilities Tagged: , , ,

Capital Budgeting

Posted on August 9, 2011 Written by

The List
Every church needs more money for it’s capital projects. Oh, I presume that you have a list of capital needs which means you’ve already done a study of them. If not, here’s what you need to do:

  • Itemize
    • Make a list of every thing you need to do in the next ten years. 10? Yes, because I guarantee you do not have the money do it all this year so you need to have a plan of what you’re going to do over the next decade. Equipment will break down and need to be replaced. Keeping a list of your HVAC (heating, venting, and air conditioning) equipment and what needs to be replaced in the next few years will help you set money aside for those needs.
    • Also, there are things that you don’t see now that you will need in the future. In 1990, no one had any idea of the power of the internet – now it is an indispensable part of every office. Who knows what the next 10 years will bring – be prepared to control the future rather than having the future take control of you.
    • The list needs to items that you know about but also what others see. No one person knows all in a church, consult with others (both staff and lay members) about what should be on the capital needs list.
    • Most capital needs lists are physical plant items: air conditioning units, roofs, paint, furniture, buildings, etc. There is nothing keeping a church from establishing a capital needs list with items related to non-physical needs – items that will help others outside the four walls of the church and/or will enable members to go farther and do more. I wish more capital needs lists had other items such as
      • Endowment or foundation funds: this would be a pool of funds to meet present and future needs of the church whether it is a physical plant need or a ministry need.
      • Mission fund for a specific trip coming up or to take care of a ministry need somewhere else.
  • Prioritize
    • After you’ve got a list, put them in some type of order. The best order is one which indicates their priority for being accomplished – the priority of need. This order is very fluid – some things will drop in priority while others will rise according to the needs of the church at any given time. For instance, new interior signage may drop in priority when people realize that the condition of the children’s furniture warrants more attention and funding.
    • This does not mean that you’ll do the items on the list in that order. Several things may interrupt such as
      • A donor sees something on the list that tickles his or her fancy and the donor decides to take care of that item(s). There are donors like this in every church – let members know about the list and you may be surprised by how many items are “just taken care of.”
      • Some items are so big that you can’t do them in one year; instead, items are taken care of in phases over several years. I’m doing that right now with several items: installing electric shades in the dining room and gym; replacing all copper gutters and downspouts with aluminum ones with gutter guards (so I never have to pay for the gutters to be cleaned again); putting in new windows throughout the church; etc.
  • Monetize
    • Put a dollar figure beside each one. The dollar figure is very much a guess, but an educated one.  Do not spend the time now to get quotes for every item, just take a stab at how much each item will cost (aim a little high, too!). That way, when people see the list, they’ll understand the scope of the needs. Also, if someone wants to “own” one of the items, they’ll know how much to give to the church to cover that specific item.
  • Date-ize
    • Establish goals as to when items will be done.  These dates can be fluid, of course. But if you don’t put some type of date/goal, then it may never get done. Put it on the list with a desired “due by” time frame even it is done piece-meal over several years.
  • Publicize
    • Tell people what the list contains, why items are on the list, ask them for additional items for the capital needs list, be willing to alter the list as needed, and continue to tell people about the list. The more publicity you can create, the better. You’re not “poor-mouthing” the church, just making people aware of items that they may not know about or may have over-looked. Help people be aware of the needs – then they’ll support you in your efforts to meet these capital needs.
    • One of the ways that I make my list available is to put it in a rack just outside my office door. I totally believe in transparency so I make all financial info available to anyone who comes to my office (and a limited amount online at the church’s website). That rack contains four items:
      • The latest audit by the independent audit firm
      • The most recent monthly financial statement
      • The current capital needs list
      • Give away books on stewardship and generosity (The Treasure Principle by Randy Alcorn and Fields of Gold by Andy Stanley)
    • When a project is underway, let people know what is being done and why it is being done. AND, thank them for their financial gifts which made that work possible. Acknowledge their generosity every way you can whether it is in print or from the platform.
  • Review-ize
    • Every few months (definitely once a year), go over the list. Move things around in priority, re-value items as you have new info about their cost, change the “due by” dates as needed, move items to the bottom “already done” category, etc. The capital needs list is organic – don’t let it be static.

The Money
I tell my vendors that while I cannot afford a new piece of equipment this year, I can pay for it in five years by setting money aside. Where does this money come from? Lots of sources – and that is key: tap various areas of the church’s finances in order to pay for the various projects. Finding different pools of money to do things will let you do more. Here are some examples:

  • Use the church’s reserve funds for things that are needed. That’s what the reserve funds are there for. Don’t deplete the reserve funds, but also don’t let those funds just sit there when they can be used for immediate and/or pressing needs. If necessary for a big project, tap the entire reserve fund with the understanding that the money will be put back if the church ends the fiscal year in the black.
  • If the church ends the fiscal year in the black AND it has fully funded the reserve accounts it needs, then use the excess to pay for capital needs. Make sure that the governing body of the church authorizes this expenditure and as often as possible, let the congregants know about this project and how it was paid for out of their generous gifts to the budget.
  • The church’s foundation was asked for money for the renovation (complete gutting) of the oldest bathrooms in the church. The foundation was informed that the total need is $100,000 and they would be approached five years in a row for $20,000 each year to do this work. The foundation agreed to fund this.
  • The gym needed new equipment. The need was made known to parents during Upward Basketball games and over the course of about 9 months, over $12,000 was received for this need. This money came from people outside the church so these gifts didn’t affect the church’s budget receipts – this was “gravy money” which we would not have received otherwise.
  • Talk about specific needs with various members of the church who you know have the gift of generosity. Twenty years ago a family donated funds to enhance a room in memory of a loved one. The room is increasingly out of date and needs some re-touching. I approached the family and they are more than willing to underwrite the cost of renovations to this room. In fact, I gave the family a ballpark of how much this would cost and they said that money is not a hinderance. They are a wonderful family and example of generosity.

In summary, keep a list (with lots of input), check it twice and thrice, find the money from lots of different pockets, spend the money while you tell people what you’re doing and why, and say “thank you” lots of different ways.

Lead On!
Steve

Filed Under: budget, buildings, church administration, church finances, church financial statements, facilities, leadership Tagged: , , , , , ,
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