leadership — Page 16

Budget Percentages

Posted on September 12, 2011 Written by Steve Law

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:

No, I don’t know of any authoritative written source of ratios. Sorry.
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: accounting, budget, church finances, church financial statements, leadership, strategy

Capital Budgeting

Posted on August 9, 2011 Written by Steve Law

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: budget, buildings, church administration, church finances, church financial statements, facilities, leadership

The Shadow

Posted on August 4, 2011 Written by Steve Law

Going to conferences is fun – you get to travel, stay in nice hotels (with comfy beds, hopefully), eat out, and meet old and new friends. I like going to conferences – I plan to continue to go to conferences. However, conferences lack something – that personal touch.

Many times a year I’m asked, “Can you tell me in the next few minutes what a church administrator does?” I appreciate their interest so I figure that if they are really interested, they will want to learn. I make them an offer – come spend a day (in whole or part) with me: follow me around, sit in on my meetings, watch me answer email and handle personnel matters, read my financial statements, etc. In short, be my shadow and learn from the inside out what it is like to be an administrator. A few people respond positively, others say, “No thanks.” Those who shadow me leave at the end of the day with eyes wide open and a new appreciation. I’ve even had my finance committee chair shadow me – and come back for a repeat!

Church staff/leaders have a lot to offer and I wish we’d share more of this knowledge with each other. Sharing material in conferences is great but there is nothing like visiting a colleague’s church and shadowing someone for a day and seeing “what it’s really like.”

I’d like to propose that church leaders be intentional about being both a shadow and a shadow-caster:

· Shadow-casters: these would be leaders who are willing to give a day or two a year to being shadowed. There is no agenda – they just meet the shadow at the agreed upon date and time and then let the person sit in on all that happens. If there is a confidential situation, the shadow can be excused.

· Shadows: these are leaders, both staff and lay members, who want to shadow other church leaders. These church staff leaders may want to learn the “best practices” at another church. It could be someone interested in this field as a career opportunity and wants to learn about this career from the inside before embarking on it. It may be a lay member who wants (and needs) to learn more about what the professional minister does each day. We can all learn from each other – more than we think we can!

This year I’m taking some conference time and shadowing some counterparts in different cities. As long as I’ve been doing this, I know that I can learn from others especially if I am sitting as close to their shoes as possible. I’m looking forward to being a shadow; I’ve been a shadow-caster almost a dozen times so it’s time for me to be a shadow.

Lead On!
Steve

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

Audacious Leadership

Posted on May 25, 2011 Written by Steve Law

I read this post Christmas 2010. It is an outstanding example of leading a church – the church didn’t know where it was going but the pastor/leader pointed the way and the members got behind it. What David Platt did with his church is not just leadership, it’s audacious leadership. And history shows from Alexander the Great to Judas Maccabees to Jesus to Charlemagne to Napoleon to Hitler that people will follow audacious leaders (both good and bad). We just need more audacious leaders.

Why My Church Rebelled Against the American Dream by David Platt
David Platt, Ph.D., is the author of the New York Times bestseller Radical: Taking Back Your Faith from the American Dream and is senior pastor of the 4,000-member Church at Brook Hills in Birmingham, Alabama.

We American Christians have a way of taking the Jesus of the Bible and twisting him into a version of Jesus that we are more comfortable with. A nice middle-class American Jesus. A Jesus who doesn’t mind materialism and would never call us to give away everything we have. A Jesus who is fine with nominal devotion that does not infringe on our comforts. A Jesus who wants us to be balanced, who wants us to avoid dangerous extremes, and who for that matter wants us to avoid danger altogether. A Jesus who brings comfort and prosperity to us as we live out our Christian spin on the American Dream. But lately I’ve begun to have hope that the situation is changing.

The 20th-century historian who coined the term “American Dream,” James Truslow Adams, defined it as “a dream… in which each man and each woman shall be able to attain the fullest stature of which they are innately capable, and be recognized by others for what they are.” But many of us are realizing that Jesus has different priorities. Instead of congratulating us on our self-fulfillment, he confronts us with our inability to accomplish anything of value apart from God. Instead of wanting us to be recognized by others, he beckons us to die to ourselves and seek above all the glory of God.

In my own faith family, the Church at Brook Hills, we have tried to get out from under the American Dream mindset and start living and serving differently. Like many other large American churches, we had a multimillion-dollar campus and plans to make it even larger to house programs that would cater to our own desires. But then we started looking at the world we live in. It’s a world where 26,000 children die every day of starvation or a preventable disease. A world where billions live in situations of such grinding poverty that an American middle-class neighborhood looks like Beverly Hills by comparison. A world where more than a billion people have never even heard the name Jesus.

So we asked ourselves, “What are we spending our time and money on that is less important than meeting these needs?” And that’s when things started to change. First we gave away our entire surplus fund — $500,000 — through partnerships with churches in India, where 41 percent of the world’s poor live. Then we trimmed another $1.5 million from our budget and used the savings to build wells, improve education, provide medical care and share the gospel in impoverished places around the world. Literally hundreds of church members have gone overseas temporarily or permanently to serve in such places. And it’s not just distant needs we’re trying to meet. It’s also needs near at hand.

One day I called up the Department of Human Resources in Shelby County, Alabama, where our church is located, and asked, “How many families would you need in order to take care of all the foster and adoption needs that we have in our county?” The woman I was talking to laughed. I said, “No, really, if a miracle were to take place, how many families would be sufficient to cover all the different needs you have?” She replied, “It would be a miracle if we had 150 more families.” When I shared this conversation with our church, over 160 families signed up to help with foster care and adoption.

We don’t want even one child in our county to be without a loving home. It’s not the way of the American Dream. It doesn’t add to our comfort, prosperity, or ease. But we are discovering the indescribable joy of sacrificial love for others, and along the way we are learning more about the inexpressible wonder of God’s sacrificial love for us. Now, don’t get me wrong. I love my country and I couldn’t be more grateful for its hard-won freedoms. The challenge before we American Christians, as I see it, is to use the freedoms, resources, and opportunities at our disposal while making sure not to embrace values and assumptions that contradict what God has said in the Bible.

I believe God has a dream for people today. It’s just not the same as the American Dream. I believe God is saying to us that real success is found in radical sacrifice. That ultimate satisfaction is found not in making much of ourselves but in making much of him. That the purpose of our lives transcends the country and culture in which we live. That meaning is found in community, not individualism. That joy is found in generosity, not materialism. And that Jesus is a reward worth risking everything for. Indeed, the gospel compels us to live for the glory of God in a world of urgent spiritual and physical need, and this is a dream worth giving our lives to pursue.

Lead On!
Steve

Filed Under: leadership, wisdom Tagged: leadership, wisdom

Church Politics

Posted on May 23, 2011 Written by Steve Law

This is a personal soapbox – this issue troubles me more than anything else in church life because I feel it completely and utterly distracts the church from accomplishing it’s God-given mission of sharing the Good News. This post will not be easy to write nor to read.

Jesus attacked only one group of people during his ministry on earth: Pharisees and Sadducees. Those men were the paid staff and lay leaders of the temple in Jerusalem. It was to them that all Jews looked to for guidance and wisdom. I have long wondered if I, as a paid church staff professional, will feel the same verbal assault on me that Jesus laid on those church staff of 2000 years ago.

Jesus’ withering criticism of them is that they were caught up in the minutae of life. The Pharisees and Sadducees debated for endless hours about trivial matters while they completely ignored the important religious and physical needs of the people. They made up 613 laws which became an unbearable burden to commons Jews so that they hated to go to Temple but they did so out of obligation. Jesus went to Temple only to worship – he didn’t debat the Pharisees and Sadducees in the Temple. They found him out among the people and they took their pettiness to him. How many times do the Gospels refer to Jesus as speaking with authority or speaking in a way at which the people marveled? Jesus focused not on the Temple politics of his day but on the big issues. Jesus instructed his disciples to keep their eyes on the God-things: disciple, baptize and teach (Matthew 28:19-20).

I’ve heard that many (if not most) young pastors prefer to start their own churches instead of stepping into an established church. Why? One answer may be the quantity of church politics. Established churches are hotbeds of politics, procedures, entrenched committee members, “but we’ve never done it that way before” mentality, and tradition. (So much of that is fear-based – fear of losing control, fear of not having enough, plain old fear. This is ironic since as Christians we are supposed to believe that God is in control and that God is generous beyond measure.)

I believe that church politics make people avoid church. They see the petty squabbles and decide that this is not for them – they want a God that is interested in big things such as people. Arguments and struggles over money, position, power, and decisions are so petty as to make God cry, especially when Christians do it.

I’ve been in too many meetings when an absurdly petty topic was raised: should we allow line dancing in the gym, what type of lettering should be on a sign, etc. I ask myself if this topic rises to the level of honoring Jesus and his sacrifice. Almost every time the answer is no, it doesn’t. It is a small matter which should be dealt with by one or two people so that the big group can focus on the big issue: sharing the Good News.

Lead On!
Steve

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

Aptitude and Attitude

Posted on April 25, 2011 Written by Steve Law

Whenever I hire someone, I look for two things: aptitude and attitude. I tell that to the interviewee pretty soon during the interview, too. That gives them an understanding of what I’m looking for. However, before you get to have a face-to-face with me, I’ve already had at least one phone interview with you – the in-person interview is just to confirm or change what I think I know about you.

Aptitude is the knowledge-base or skill-set that an employee brings with him or her. That is a compilation of that person’s life experiences, education, work knowledge, training, books read, and everything else that this person has learned to this point in life. It is far too much to unpack in an interview but I try to get a glimpse into what the person knows.

Attitude is the mindset the person has about work, life, other people, etc. Attitude is BY FAR the most important of the two items I look for. I can train aptitude if you have the right attitude. Aptitude is easy and knowledge can be taught. Attitude can never be taught – it is who you are and tells me (the prospective employer) more about what kind of employee you’ll be than any résumé ever will. Attitude comes through loud and clear usually within the first 60 seconds of a meeting, even an interview where you’re doing all you can to impress someone.

This approach also works with both volunteers. Get vols who have the right attitude, and whatever program they’re in will have a much better change of success. Having the right attitude to anything in life will infect and affect others around you. So, my suggestion is that when you interview for a staff position or a volunteer (or even when you interview somewhere) have the right attitude regardless of your aptitude. Eventually your attitude (and those whom you interview) will rise to surface – you might as well know it from the outset.

Lead On!
Steve

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

Uncertainty, part 2

Posted on April 4, 2011 Written by Steve Law

Recently I came across a great example of cutting through uncertainty or how a leader can infuse his or her organization with clarity and commitment. Apple is the darling of corporate America – it is the company that analysts point to, that nice corporate gifts come from, and which is becoming a household name thanks to the iPod, iPhone, and iPad. But Apple used to be a niche company. It’s computers were the mainstays of a few industries such as printing, publishing and other areas that used a lot of graphics.

Apple was created by Steve Jobs and a few friends in the late 1970s when personal computers began coming over the horizon in great numbers. (I remember going to work right out of college in 1983 and my very first personal computer was made by Xerox! It even had two external 5.25 floppy drives – it was amazing.) Apple developed its market but it was not as successful as Bill Gates who teamed up with Intel, IBM and other major manufacturers. Apple very quickly became a niche computer company and the board of Apple fired Jobs in 1985.

A dozen years later, Apple’s board of directors (by now with completely new members) re-hired Jobs. He didn’t like what he found. It was a company in disarray with no focus. Almost immediately Steve began cutting product lines and making changes that lead to great fear of him by the staff. In reality he didn’t cut that much but what was cut was so visible that almost all areas of the company suffered from low morale. That didn’t last long – Jobs began introducing ideas and innovations very quickly (BTW, he co-founded Pixar, the animated movie maker of great fame, during his “exile” from Apple). Soon, Apple became profitable and within ten years, by 2007 had introduced iTunes, iPods, and the iPhone and in 2010 the world was rocked by the iPad which sold 15 million units in less than one year.

Under Jobs, Apple has great clarity of purpose. All extraneous items are tossed overboard. Laser-beam focus is the order of the day. I heard that Apple’s tag line is, “We use technology to make life easier and we just happen to make computers.” Apple is no longer a niche company.

Question for you: does your church have laser-beam focus on its goals. Have you chunked overboard everything that is not helping your church achieve its vision. Or are you saddled with unnecessary programs and activities that really don’t push you forward but you do them “because everyone else is doing them.”

One of my favorite analogies is of a river with stones in it. First, are you crossing the right river? There are lots of rivers with stones but your vision must point to the river which you will cross and over which your members will follow. Select your vision (river) wisely and with God’s help because once you start over, it is really, really tough to get everyone to back up. You will have some people that absolutely refuse to cross that river – that is fine; let them join another church and cross another river. You’re responsible for your God-given vision and your river. As you cross the river, look for the next rock on which to step – don’t look too far ahead, you won’t be able to see through the mist. Just look one, two or maybe three rocks ahead to know which direction to go – have a sense of direction (of the path) but not necessarily of the ultimate course.

When Jobs re-joined Apple in 1987, much less when he created it in the 1970s, he had no idea of an iPhone or iPad – he just knew his company needed to focus on making computers. Same with you – focus on leading your church in the direction your vision is leading. Don’t get too far in front of your people (don’t let the river’s mist fog their vision of you and the rocks they need to step on to follow you) but don’t slow down waiting for everyone to join you. You may even have to let some staff go and/or terminate some beloved programs – but help your followers understand that while these things are good, they do not add value to your vision. Yes, there will be bottlenecks and rapids and slippery stones – handle them one at a time, but always move forward.

Lead On!
Steve

Filed Under: leadership, strategy, wisdom Tagged: leadership, strategy, wisdom

Q-Tips

Posted on March 23, 2011 Written by Steve Law

I’ve got two packs of Q-Tips (registered trademark, I’m sure) in my office. I got them a dozen years ago and I use them as illustrations to my staff and colleagues several times a year. I pull them out when someone comes into my office with lots of frustration over what is going on (or not happening). I listen and then, as it is warranted, I have the following conversation:

Me: do you know what Q-Tip means? What is stands for?
Friend: no idea (with a completely bewildered look as in, Where the heck is this headed?)
Me: Quit Taking It Personally – QTIP
Friend: oh, cute.
Me: no, really. You, me, we need to separate the personal from the professional. When junk hits the fan, just step back (out of the way) and not let any of it get to you personally. Keep the professional and the personal separate.

About 25 or 30 years ago I read an article in Fortune from which I remember one line: “Attack the problem, not the person.” Too often in work (especially in church work), we merge our professional and personal lives and it often has bad consequences. Too often in work (especially in church work), we try to fix problems by fixing people – also often with bad consequenses.

Church professionals need to separate our personal lives from our professional lives – our spouses will appreciate it! But also realize that when we attack a problem, ensure the person on the other end fully understands this is not about him/her personally.

Buy a pack of Q-Tips. When things get tense in the office, hand out the Q-Tips and remind people that all this professional angst will go away and they don’t need to let it affect their personal lives. It is not an attack on who they are as individuals; it is just a professional issue and should be dealt with professionally.

Oh, one more thing – I’m sure the inventor of Q-Tips never thought of the slogan but I like it nonetheless!

Lead On!
Steve

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

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