Good churches need good manuals

Posted on November 30, 2016 Written by

2016-10-october-18-1

All churches need policies. Some churches make policies in reaction to an event. That is backwards thinking. Churches must be proactive in their policies so that staff and members know what is expected and what lines cannot be crossed.

 

Every church needs a personnel manual and a finance manual to establish the legal and ethical boundaries within which the staff and members will operate. Violation of these policies often violates legal, ethical, or moral boundaries. Breaking a policy will always result in a conversation and sometimes in the termination of a staff member.

 

Some churches need guide manuals (not policy manuals) to establish the parameters for their budget, endowment, or internal operations. These manuals determine the boundaries within which the staff and committees will function. Straying outside those limits may be permitted but only after a conversation about why and how.

 

This site provides churches with templates they can use to create their own manuals. There is no need to “re-invent the wheel.” These manuals were developed by an administrator with over 25 years of experience in half a dozen churches. These policies comply with all current laws and are the best practices of healthy churches.

 

The manuals available are:

  • Budget
  • Finance
  • Finance Office
  • Endowment
  • Personnel
  • Financial Statements
  • Financial Planning for Ministers
  • Generosity Strategy
  • Written Communications

 

Filed Under: church administration, church finances, leadership, planning, strategy Tagged: , , , ,

Admins as Notaries Public

Posted on October 21, 2016 Written by

 

Periodically church members will need documents to be notarized. This notarization may be for a document required to participate in a church event or even for a private need. FYI, all banks have notary public and people can get a doc notarized at their local bank. But it is often more convenient for the church to provide this service.

 

Becoming a notary public is pretty easy. Most of the work can be done online through the state agency. Do not use private companies that do the paperwork for you – they overcharge and you end up doing most of the work anyway.  The notary public fees are about $100 and the certification lasts for five years in many states.

 

I required all church administrative assistants to become notaries public so they could notarize docs as needed. Frequently the youth or children’s ministries had documents related to retreats or trips which needed to be notarized. It was easy to tell people to come to the church and ask for an admin who would then notarize the doc.

 

I told the admins who were notaries that they could notarize other people’s documents and even charge the legally permitted fee. They were forbidden from charging members a fee since the church paid for the notary public license.

 

This system has worked well and I encourage churches to take this step.

 

Lead On!

Steve

 

Filed Under: church administration, church staff, planning Tagged: , ,

Workers’ Comp E-Mod Factor (part 3 of 3)

Posted on September 30, 2016 Written by

2016 05-May 31 (10)

Every year each insurance organization receives an annual report from National Council on Compensation Insurance (NCCI). The report is usually a letter with a link to a website to get the actual report. Every WC policy is evaluated every year to determine if the number of claims was above or below the anticipated amount. The insurance company uses formulas to pre-determine what they expect each policy to have in annual claims.

 

The number of claims and the dollar amount of the claims affects the experience modification factor or E-Mod Factor.” The Mod Factor is the figure which is multiplied against the total premium to get the final premium. Mod Factors range from about 0.80 to 1.49 with the average being 1.00.

 

The report from NCCI will list the org’s most recent Mod Factor. If the Mod Factor is below 1.00 then the original premium will be discounted. If the Mod Factor is above 1.00 then there is an extra amount to be paid in the WC premium. Of course, if the Mod Factor is exactly 1.00 then there isn’t a discount or a surcharge.

 

Organizations want to have Mod Factors under 1.00 in order to get discounts. However, do not jeopardize the safety of your employees nor hurt them when there is an accident and they need WC coverage. Mod Factors are on a three-year rotation. Accidents and claims that happened four years ago are no longer reflected on the Mod Factor.

 

Bottom line: use WC appropriately, try to keep the Mod Factor low by having a safe work environment, pay the premiums each year, and always know your Mod Factor.

 

Lead On!

Steve

 

Filed Under: budget, buildings, church administration, church safety Tagged: , , ,

Workers’ Comp Codes (part 2 of 3)

Posted on September 23, 2016 Written by

2016 05-May 31 (12)

Most churches have two different types of employee classifications for WC purposes:

  • Professional staff (aka, clergy and office workers); their WC code number is 8868
  • Other staff (janitors, food service, and maintenance); their WC code is 9101

 

WC insurance assigns premium rates to each employee classification depending on the type of work on their potential injuries and severity. For instance, office staff and clergy do not engage in typically dangerous activities so their premiums are pretty low. However, kitchen staff use knives, ovens, and slicing machines; custodians use vacuum cleaners, ladders, and heavy equipment.

 

Insurance premiums are charged per $100 of income based on the employees’ actual wages as reported on the W-2. Many WC insurance companies will perform a spring time audit of W-2s and use that information to retroactively correct the prior year’s total premium. If they charged too much, they’ll send a refund and if they charged too little, they’ll send an invoice. The premium for code 8868 is in the range of 30 to 40 cents per $100 of income. The premium for 9101 is about $2.50 per $100.

 

There is a third code which affects some churches, 8869. This code covers child care workers and it has a rate of about 60 to 75 cents per $100. Working with children, especially their poop and their biting can be dangerous to employees. Remember, WC does not cover the children, only the employees.

 

Lead On!

Steve

 

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

Workers’ Comp Insurance – a primer (part 1 of 3)

Posted on September 16, 2016 Written by

2016 05-May 24 (5)

Workers’ Compensation Insurance is legally mandated for employers. In Virginia (and probably in most US states) it is required for all employers with more than two employees. That means that ultra-small employers (like mom & pop companies) do not need WC insurance but everyone else does.

 

WC insurance covers the medical expenses of employees who are injured or killed while working. It pays for most work-related injury expenses. However, I have seen work-related accidents which were determined by the insurance company to be non-work-related.

 

When a person goes to the hospital with an injury, especially the emergency room, one of the questions is, “Was this caused by a workplace accident?” This question should always be answered truthfully – never try to protect an employer from claims or insurance price increases by lying about the nature of the accident. Employers must encourage their employees to claim WC insurance especially on injuries which could cause chronic pain or prolonged recovery. Those long-term consequences can be expensive if the employer or employee pay for them.

 

WC insurance is obtained from the insurance company which handles the employer’s property & liability insurance. It is typically not expensive and it is based on several factors:

  • The work performed by the employee
  • The employee’s actual wages
  • A discount or premium charged based on prior claim history

 

After the terrorist attacks on the US on September 11, 2001 the insurance industry lobbied Congress which permitted a non-negotiable terrorism fee which is assessed on all WC policies.

 

Lead On!

Steve

 

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

Stock Gifts (part 2 of 3)

Posted on August 26, 2016 Written by

2016 04-April 26 (9)

When stock is donated, it must be acknowledged by the church. It can be posted on the person’s giving record so that there is permanent record of the gift. It is also an excellent practice to send the donor a separate letter with the details of the transaction. Below is a sample letter which I use regularly.

 

Mr. and Mrs. John Smith

1234 Maple Ave.

Hometown, US 12345-6789

 

Dear Mr. and Mrs. Smith:

 

Thank you for your contribution to Grace Family Fellowship. Your gift of stock was:

 

Name of stock:……………………………………….. Apple, Inc. (AAPL)

Number of shares:………………………………….. 25 shares

Date of transfer:…………………………………….. January 3, 2018

Stock high on date of transfer:…………………………… $412.50

Stock low on date of transfer:……………………………. $409.00

Average value per share on date of transfer:………. $410.75

Total value of contribution:…………………………… $10,268.75

 

Fund contributed to:

  • 2018 Operating Ministry Budget

 

The date of transfer is the date on which the stock was transferred to Grace Family Fellowship. The IRS requires that stock gifts be valued at the average of the high and low of the stock on the date of transfer. Grace Family Fellowship sells all stock gifts immediately. The cost of the commission and fees related to the sale is netted from the value of your gift.

 

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 Grace Family Fellowship for this contribution.

 

Thank you again for your gift. Your continued support of the ministries of Grace Family Fellowship is greatly appreciated. If I may be of further help please let me know.

 

Sincerely,

 

Church Administrator

 

Lead On!

Steve

 

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

Stock Gifts (part 1 of 3)

Posted on August 19, 2016 Written by

2016 05-May 10 (2)

Virtually all stock in the US is common stock. There are lots of other kinds of stock (preferred, private, etc.) but common stock is typically what is traded on the major stock exchanges. Almost all stock is now held in “street accounts” or an electronic account in a brokerage. Paper stock is available but it is cumbersome to transfer so most people use electronic stocks. For purposes of this post, stock gifts include mutual funds.

 

Stocks which have increased in value since their purchase are an excellent way for members to make gifts to their church without incurring tax consequences. Churches can accept paper stock gifts without having an account with a stock broker. However, only brokerage firms with selling rights in a stock exchange (think NYSE, New York Stock Exchange on Wall Street) can sell the stock. Churches without an account with a broker cannot accept electronically transferred stock from a member’s street account.

 

Churches which may get stock gifts should be pro-active and establish a brokerage account. This will require the authorized body of the church to approve a required corporate resolution (the wording is provided by the brokerage firm) which authorizes specific people in the church to sell stock. Typically the people who are named on the resolution are the church’s treasurer, chairperson of the Finance Committee, and the staff person responsible for the church’s finances.

 

Once the account is established and the resolution is approved, then the church can accept and sell donated stock without much trouble. All stock gifts must be acknowledged by the church and there is a specific way to value stock gifts.

 

Lead On!

Steve

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

Strategic versus Organic Org Charts

Posted on August 12, 2016 Written by

2016 05-May (3)

Staff org charts are absolutely necessary. Every organization, including churches, must have an up-to-date org chart. These charts help all staff (and non-staff) understand who supervises who, where the buck stops, which department has which personnel, and so many other questions. And, as organizations grow and change, the org chart must do the same, too.

 

Ideally, the church leadership will think about three to five years out and dream about what staff is needed to accomplish the mission and vision of the church. Then, they will put in a timeline of which staff person to hire in which order (as budget funds are available). This planning helps keep the staff and personnel committee focused on its goals and using its people resources to reach those objectives. This is called strategic planning or a strategic org chart.

 

However many orgs, especially churches, fail to do this. Instead, the leadership reacts to complaints and requests from members who want to have a staff person to take care of a specific ministry area (usually the one the member cares most about). And too often the personnel committee and/or pastor will acquiesce and make that new staff person a priority even if it has nothing to do with the church’s mission and vision. This is called an organic org chart (it is also called a disaster).

 

Org charts must be intentional and well-reasoned. Otherwise, you may end up with an org chart in which the senior pastor has 10 or 12 people reporting to him; those org charts have the appearance of being a circus tent (which may be appropriate). Make sure your org chart looks well-planned and not like it was created by the monkeys in the circus.

 

Lead On!

Steve

Filed Under: church administration, church staff, planning, strategy Tagged: , , ,
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