The Executive Pastor’s Ministry

Posted on July 14, 2015 Written by

Does an executive pastor do any ministry or that position completely subsumed in financial, personnel, and facilities management? Good question and here’s my answer:

  1. “Back office” work is ministry, but at a creative and different level. It is not “just” paperwork. I can’t tell you the number of vendors I’ve talked to about church – and those are doors that are not open to other staff persons. When I’ve called a customer service line and got a call center in India, I knew that they could see they were dealing with a church and that I might be the only Christian that person EVER speaks to in his/her life. Paying bills on time is a HUGE witness to vendors who are sour on church. I used all those things to educate other ministers to help them think outside the box and understand that the minutia they detested really did have a Kingdom impact. Think about this as not “just paperwork” but as opportunities for creative ministry. For instance, every year I shred old financial docs – I leverage that by telling members that they can bring in their stuff to shred (because I really don’t much for the shredder). The senior adults LOVE that they can bring in all their old files from the 1960s. So, what I was doing any way I could use to help others and everyone wins.
  2. The XP ministry is higher and more focused in scope. XPs continue to do the ministry they were doing before but now use those opportunities to train the campus and other pastors so they can learn from the XP. Every XP must seek every chance to teach the next rising generation how to do avoid mistakes and to stand taller on the XP’s shoulders. XPs get to work with a high level of volunteers and members – leaders in their community and businesses who can open doors for the church that most ministers can’t imagine. That can give an XP an opportunity to reach people who would never come to the church, all because the XP is working with high-net worth members or upper management members. Most churches neglect high capacity donors but that needs to a focal point for the Senior & Executive Pastors for both the sake of those people and of the church.
  3. The XP ministry is at a broader level. Not just on a campus but on a larger basis and even, through professional contacts, the XP reaches people across the state and region. People will come to the XP’s church to learn the way that church does things and the XP can teach them so they can replicate what the XP is doing in their own context. Just as the XP needs to follow in the footsteps of others, every XP is also responsible for pulling those behind him or her up to his or her level. This is a leadership position – one that people look up to and want to emulate. This position needs to be worth following, not “just another minister.”

The ministry of the XP is more creative, deeper, higher, and broader than other ministers. It requires more excellent ministers to do this work for the Kingdom.

Lead On!

Steve

Filed Under: church administration, church staff Tagged: ,

Rubber Stamps on invoices instead of paper forms

Posted on May 5, 2015 Written by

I don’t like unnecessary paperwork. Years ago I came up with a rubber stamp to cut down on paperwork in the church’s finance office. Every invoice paid by a church should have information attached to it so that there is a clear description of all the info that is needed to process the payment accurately.

 

Most churches have a “payment request” form that is filled out and attached to each invoice. A form is fine but sometimes the attached form is detached from the original invoice. Instead of a form, I created a rubber stamp (see below) which I stamp on many (but not all) invoices from vendors.

 

Payment Approval & Coding Info

Payee______________________________

Description _________________________

Account #                              Amount

_________________        _____________

______________               ___         _____________

Approval ___________________________

Ck# _______________     Date _________

 

Using this rubber stamp ensures that it won’t be separated from the invoice, it saves money by not having to make copies of the payment request form, and it saves time by having a smaller “form” to complete than most large paper forms. I even buy a rubber stamp for each person in the office who completes the paper forms to make it more convenient for them.

 

Consider having this (or a similar) rubber stamp to make your finance office more efficient.

 

Lead On!

Steve

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

Designated Funds and UPMIFA (part 2)

Posted on March 17, 2015 Written by

Every church I’ve worked with has designated funds which are dormant. The long-standing rule of thumb was that to re-purpose the money in these funds was that each donor needed to be contacted to request permission to alter the use of their gifts. That is a good rule to use but in many cases, this is not practical or even possible. Fortunately, there is a legal alternative.  It is called UPMIFA: Uniform Prudent Management of Institutional Funds Act.

 

UPMIFA has been passed by almost every state legislature (there are a couple of holdouts) and it is virtually the same in each state. Look at your state’s legal code for the specific language – I’ll use the one from Virginia (where I live) for this post. In all instances the church must consult with a court or the attorney general. If the request is reasonable, they courts will agree to the church’s desires.

 

Below is the actual law from the Code of Virginia. Here are the salient points:

  1. Donors can change the purpose of their gift but it still must be used for a charitable purpose
  2. Judges and Attorneys General can change the purpose of a fund but it still must be used for a charitable purpose
  3. An institution can change the purpose of a fund by working with the Attorney General if the fund is less than $250,000
  4. An institution can change the purpose of a fund by notifying the Attorney General if the fund is less than $50,000, is over 20 years old, and it will be used for a similar purpose

 

  • 55-268.16. Release or modification of restrictions on management, investment, or purpose.
  1. If the donor consents in a record, an institution may release or modify, in whole or in part, a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund. A release or modification may not allow a fund to be used for a purpose other than a charitable purpose of the institution.
  2. The court, upon application of an institution, may modify a restriction contained in a gift instrument regarding the management or investment of an institutional fund if the restriction has become impracticable or wasteful, if it impairs the management or investment of the fund, or if, because of circumstances not anticipated by the donor, a modification of a restriction will further the purposes of the fund. The institution shall notify the Attorney General of the application, and the Attorney General shall be given an opportunity to be heard. To the extent practicable, any modification shall be made in accordance with the donor’s probable intention.
  3. If a particular charitable purpose or restriction contained in a gift instrument on the use of an institutional fund becomes unlawful, impracticable, impossible to achieve, or wasteful, the court, upon application of an institution, may modify the purpose of the fund or the restriction on the use of the fund in a manner consistent with the charitable purposes expressed in the gift instrument. The institution shall notify the Attorney General of the application, and the Attorney General shall be given an opportunity to be heard.
  4. If an institution determines that a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund is unlawful, impracticable, impossible to achieve, or wasteful, the institution, without application to the court but with the consent of the Attorney General, may modify the purpose of the fund or the restriction on the use of the fund in a manner consistent with the charitable purposes expressed in the gift instrument if the fund subject to the restriction has a total value of less than $250,000.
  5. If an institution determines that a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund is unlawful, impracticable, impossible to achieve, or wasteful, the institution, 60 days after notification to the Attorney General, may release or modify the restriction, in whole or part, if:
    1. The institutional fund subject to the restriction has a total value of less than $50,000;
    2. More than 20 years have elapsed since the fund was established; and
    3. The institution uses the property in a manner consistent with the charitable purposes expressed in the gift instrument.

 

Lead On!

Steve

Filed Under: accounting, church administration, church finances, church financial statements, strategy Tagged: , , , ,

Designated Funds and UPMIFA (part 1)

Posted on March 10, 2015 Written by

Churches are the beneficiaries of designated gifts – people who give to specific causes that touch their heart. This can be scholarships for students to go on mission trips or to college, to pay for children’s supplies and events, and scores of other ministries. Used wisely, designated funds can enhance a church’s mission by adding extra dollars to a church’s budget.

 

Every designated fund must have a specific purpose (why it was established and what it is to be used for) and a sunset clause (a determination of when the fund will cease to exist). However, many churches have funds that don’t have either a purpose or a timeline.

 

I challenge each church to go through all of it designated funds and write down its purpose and when it will cease to exist. The good news is that most church accounting software has a section in the chart of accounts where a memo can be written about each fund. Use that memo tab to write in this info so that this knowledge can be passed from one person to another and not lost.

 

Then, use you designated funds to supplement your budget needs. Use them as much as you can and encourage people to give to them – over and above what they give to the church’s operating budget.

 

However, even doing all that, churches are going to have funds whose purpose ceased to exist long ago. There is legal help for that and I’ll describe it in the next post.

 

Lead On!

Steve

Filed Under: accounting, church administration, church finances, church financial statements, strategy Tagged: , , , ,

Software Packages

Posted on January 13, 2015 Written by
  1. Membership & Financials
    1. There are two big companies are Shelby Systems and ACS. These are very robust financial/accounting systems and a very strong membership/people module. The contributions module in the Membership section posts gift info to individual members and then it posts it to the financial section for a seamless posting of Sunday receipts. Of the two, my preference is Shelby for several reasons which are too detailed to get into here. If you get both and their modules then annual support will cost about $1,500.
  2. Membership Only
    1. Both Shelby and ACS have a membership/people module that can be bought separately from the financials. There are some newer companies that only do membership such as ChurchTeams, Church Community Builder, Servant Keeper, and about a dozen others. The ones I’ve listed are the larger ones. Frankly, this is an area where you get what you pay for.
  3. Financials Only
    1. To my knowledge, only ACS and Shelby do a dedicated church financials software package. I have made Quickbooks (online and desktop versions) work in a church setting but there are some nuances the Quickbooks just can’t handle such as donor gift statements (I’ve had to find a very time-consuming work-around for that). For church financials, I encourage you to look at either Shelby or ACS.
  4. Payroll
    1. Both ACS and Shelby have payroll modules. However, I strongly recommend you outsource your payroll to a national company such as Paychex, CBIZ, or ADP. They file all taxes on time so that you never incur a penalty from the IRS. They cost about $65 per pay period (for up to about 12 employees). Outsourcing payroll is a LOT of peace of mind – knowing you’ll never have a visit from the IRS is a wonderful thing!

 

Lead On!

Steve

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

Church Software

Posted on January 6, 2015 Written by

This is from an email I received: “I belong to a small church and we are looking to update our software. Can you recommend software that is membership/financial based for churches?”

 

My reply:

Your church size is a big factor – the larger it is, the more robust a system you’ll need; the smaller it is, then you can patch-work a couple of systems. Here is some info:

 

Do you want to handle all your financials “in-house” or are you comfortable out-sourcing your financials? For several years I’ve done out-sourced financials for several clients. I’m biased but I strongly encourage you to out-source your financials to a trusted person. With the internet, your financial person can be several states away. All info (bills and even checks) can be emailed for posting by this company. This saves the church in many ways (no office for a person, no computer to purchase, no employee benefits to pay for, etc.) but it costs a little more in terms of straight wages (because the other company has to cover their own benefits & taxes). If you want to go that direction, I can give you a quote and the names of other companies doing the same thing.

 

If you do this in-house, then you have several decisions to make:

  1. Do you want a system that combines both? That will cost more, be stronger and extremely effective in handling your needs, and require initial training plus on-going training of the staff using it.
  2. Do you want to install the software on your own server or have it online? If you put it on your server then you also need to have it backed up and that will cost about $500 or $750 a year. Having someone else host your data online will cost (price varies) but there is a LOT of peace of mind knowing that your data will never be lost.
  3. Training is a must. Every dollar invested in training will yield results in efficiency and effectiveness in very tangible ways. Get the training!

 

Lead On!

Steve

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

What Should Churches Opposed to Gay Marriages Do?

Posted on December 9, 2014 Written by

This post addresses only the church’s legal concerns that have arisen related to same-sex marriage.

Recently, many courts in the US have ruled that marriage by the LGBTQ community (Lesbian, Gay, Bisexual, Transgender, and Questioning) are legal. There is still much in legal limbo – the ultimate legal ruling will be done by the US Supreme Court in a few months or years. In the meantime, should churches enact policies to protect themselves and their ministers from being forced to perform these marriages for those congregations opposed to this on theological grounds?

The short answer is no. It is not necessary.

The long answer is that never in the history of the US has a church or a minister of a church been required to perform a ceremony which is against the theological positions of the church/minister. That includes things which today (December 2014) are considered acceptable but which were not socially acceptable decades ago. The courts never forced a church to do or forbade a church from doing any of the following:

  • Marrying teenagers
  • Marrying divorced people
  • Marrying people of different races
  • Marrying people of different ages
  • Marrying people of different faiths or no faith

While a church can pass a series of policies, it is unnecessary and it is needless time expended when there are so many more worthwhile things for a church to be doing. If a civil servant were to threaten a church with a legal suit, the courts would throw it out because it violates both clauses of the religion part of the first amendment: the establishment clause and the free exercise clause. The state cannot tell a church how to do its business (period).

BTW, churches are increasingly bombarded with alarmist emails and paper mail trying to scare them about their security issues, tax situation, legal matters, and government intrusion. It will require an increasing amount of work for churches to investigate to see which of these claims is real and thus should be addressed and which ones are opportunists trying to get churches to buy their services. The other name for these opportunists is “quacks” and there are a lot of them out there. Do not give them your attention and certainly not your business.

Lead On!

Steve

Filed Under: church administration Tagged:

IRS Payroll Audit Checklist

Posted on December 2, 2014 Written by

A friend of mine had an IRS payroll audit (and passed with flying colors). Below is the actual checklist required by the IRS (I changed only the dates; all other information is original). If you fail this, they won’t revoke your tax-exempt status but they can issue fees and penalties.

As an administrator, please look at this checklist and see if you could give this information immediately to the IRS officer so that he or she is in your office for only a day or two. You don’t want them to stay long and the better organized your records are, the sooner you can return to your normal hectic work.

When a staff person or a committee member complains that you want too much paperwork, show them this checklist and explain that the IRS really does visit churches every single year and asks for this stuff; you’re just trying to protect the staff and church, not trying to do more paperwork.

The instructions below are directly from the IRS:

The following information is being requested for the examination of your Forms 941 for the period covering January 01, 20XX and ending December 31, 20XX. The information being requested will be used in examining the information provided on the return and will be used to determine the employment tax liability for your organization for the period of January 01, 20XX through December 31, 20XX.

Please provide the following documentation:

  1. Copies of Forms W-4 for all employees during 20XX
  2. Copies of Forms W-3 & W-2 for all employees during 20XX
  3. 20XX payroll ledger, check register, employee earning record and year end payroll summary
  4. 20XX general ledger, trial balance, and a chart of accounts
  5. All Bank statements for accounts used in 20XX
  6. 20XX Time cards, sign in sheets, or other method used to track employee hours
  7. Please provide copies of Forms 1096 & 1099 Misc. issued and filed for 20XX
  8. Copies of all employee credit card statements for 20XX
  9. Detailed explanation of payroll procedures, including whether reimbursement is handled under an Accountable or Non-Accountable plan
  10. List of names & addresses of all officers, directors & trustees to include compensation, if paid in 20XX. Also a current list of officers.
  11. Minute books of your governing body (Session) (Officers, Directors , Trustees) including compensation committees if available from January 1, 20XX to December 31, 20XX
  12. Employee personnel manual, job descriptions, compensation policy, and compensation comparable data if used
  13. Copies of Forms W-9
  14. Copies of prior and subsequent year employment tax returns Forms 941.
  15. If your employees were “leased” through a third party management company, or you used the services of a temporary staffing agency, please provide a copy of the contract(s) for 20XX
  16. Provide documentation for any resident or non-resident aliens used in 20XX; include copies of applicable 1042s filed
  17. A tour of the organization’s facilities, as well as a desk or work-area to work in during the examination

NOTE: Additional information may be requested in the future, including a meeting to discuss the supporting documentation you provide. It is to your benefit to provide clear and concise explanations and supporting documentation regarding the information being requested.

 

Filed Under: church administration, church finances Tagged: ,
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