Church Business Meetings (part 2 of 3)

Posted on October 7, 2014 Written by

This the second part on church business meetings and how they should change. The reason for the change is so the members and guests see the church as dynamic, not as static and boring. I believe that business must be engaging and not merely a recitation of fact and figures. Business meetings should consist of stories of people and how the church is helping them. My first post focused on the membership report. This post will focus on the programming reports.

Reports: the church is about the business of helping people see how much God loves them. The most common way churches do this is through their programming and activities. But if you’re not involved in one of those areas, you probably don’t know what is going on. Why not use the church business meeting to share with the entire church all of the successes (and failures) of the past and the exciting things that are planned for the future?

When the church’s financial report is given, the treasurer interviews ministry leaders saying, “The church has given you X dollars; can you tell us how you’ve used that money?” Then, the ministry leader talks about what they did with the money using pictures, music, children and youth, other adults, and any resource he or she has. The treasurer presents financial information about each ministry area and uses that a lead-in to ask what is going on with that money.

By the end of the business meeting, attendees have seen and heard what their church is doing, who is involved, how much money has been spent and for what, and what is going to happen in the next few weeks and months. Everyone leaves the meetings having been informed about events outside their areas of interest.

At every meeting, the reports from the main ministry areas are a must: missions, age-level programming (adults, young adults, youth, and children), pastoral care, administration, fellowship, and worship (the five purposes of the church). Then, reports can be given by other ministry areas as there is need and time.

One caveat: all reports must be engaging and the treasurer/interviewer must be energetic in asking questions and encouraging the presenter to be enthusiastic. Reading dry reports should not be permitted; the church must be an exciting place to be and the reports must reflect that.

Next post: decision-making!

 

Lead On!

Steve

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

Church Business Meetings (part 1 of 3)

Posted on September 30, 2014 Written by

Most church business meetings are boring – at least the ones I’ve attended. They typically consist of three distinct areas:

  • Numbers: someone presents financial numbers (without giving too much detail lest the audience doze off) and someone else reads a list of people who have joined or left the church
  • Reports: occasionally there is a report about some area of the church and usually these reports are read aloud from the information which is in the packet handed out to all attendees
  • Decisions: sometimes there is an item or two on which church members will vote based on a two-minute presentation

Then the meeting ends, and members leave with very little new information about what is going on in their church. I propose a new format which contains much of the same information, but the presentation is completely different.

Numbers: Every business meeting should have the “nickels and noses” reports (how many people and how much money we’ve got). Financial information, which can be very dry, must be presented to the church in a more dynamic way – more on that in the reports blog (part 2).

  • Membership data should be treated with sensitivity. Most people never know what a church does until they actually experience it, good and bad. What if we told members ahead of time how they can expect to be treated? I can also imagine how members might share that knowledge with other people who have a negative impression of the church in general and sometimes your church specifically. Here are ways to change the membership report:

o   For those who leave the church due to death, the business meeting should pause so that the minister or volunteers talk about the ways the church ministers to the dying and their families. This helps those who are hearing the informatlon to know how their church helps families at some of the worst and hardest times.

o   For those who leave the church to go to another church, someone should talk about how the church reached out to these people to ask them why they left and then explain the reasons, even if the reasons are painful and personal.

o   For those who join the church, there should be a celebration and telling of their stories. New members who are willing could be interviewed at the business meeting so that everyone can get to know something about them. A standard set of “get-to-know-you” questions can be created and given to them ahead of time. Caution: new members must not be forced into doing this – it should be optional, not mandatory.

o   Finally, each new member should be paired with a same-gender long-time member for a year in order to guide the new person through the idiosyncrasies of the church. This pairing will help the new member be integrated to the church and help retain them.

 

Lead On!

Steve

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

Top 10 Ways to Help the Finance Office (part 3 of 3)

Posted on September 16, 2014 Written by

A colleague asked me how staff and lay members can help the church’s Finance Office. Here is my top ten list; yours may be different – let me know what I left out.

8. Forms are not evil

  • Most forms from the Finance Office are required by a Federal or State agency (IRS, Dept. of Labor, etc.) or by good accounting principles adopted by the Finance Committee.
  • If you don’t know how to read a form, the Finance Office staff can help you since we deal with these forms every day and you probably don’t see them very often. Please ask for help.
  • Turn in your paid time off (sick, vacation, etc.) forms regularly. Do NOT wait till the end of the year or quarter to do that.

9. Learn to read financial statements and read them regularly

  • You need to know what is being spent from your budget.
  • Some expenses are charged to your budget without your prior knowledge such as expenses for the copiers and postage meter – that’s another good reason to read financial statements.
  • Knowing the financial status of your ministry area will help you lead your lay member teams better, too.

10. Consider all payments you make to be open for others to see

  • When you spend church money, always ask yourself “Can I explain this expense to the average church member?”
  • All expenses should be for things that advance the cause and mission of the church. Anything less is poor stewardship.

A concluding note: The Finance Office does make mistakes, but we try to keep these to a minimum. Please help us by reviewing your pay stubs to ensure you’re getting paid correctly, reading your financial statements, and meticulously doing anything and everything related to finances.

 

Lead On!

Steve

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

Top 10 Ways to Help the Finance Office (part 2 of 3)

Posted on September 9, 2014 Written by

A colleague asked me how staff and lay members can help the church’s Finance Office. Here is my top ten list; yours may be different – let me know what I left out.

4. Paying speakers more than $600 in a year requires paperwork

  • If a person is paid $600 or more, the church must get his/her social security number and address so we can send him/her a 1099.
  • Because one person may be used by different departments in a year, anyone who is paid $300 or more in one check must complete a W-9 (which captures a person’s Social Security Number).
  • This is an IRS requirement. Don’t blame the Finance Office for this.

5. Account properly for any money you receive

  • NEVER keep money at your desk/office overnight. Please place it with the Finance Office for safekeeping and get it back the next day.
  • Use the deposit envelopes and fill them out completely.
  • Really, really, really look for ways to accept payments online (for registering for an event or payment for an activity or donations). Online payments are safer and you have a record of who paid what.

6. Fundraising is okay but there are steps

  • All fundraising must be pre-approved by the Finance Committee. NO exceptions.
  • This is to ensure coordination of fundraising, eliminate any timing conflicts, and avoid fundraising for activities not in keeping with our faith principles

7. Budget is a strategic exercise – and that is a good thing

  • ALWAYS be thinking about your budget for the next year in the current year. Ask questions such as what lines have too much or too little money; what lines can be consolidated or even eliminated.
  • Plan next year’s budget NOW (that means anytime during the year). Work with your lay leaders now asking them about their dreams and how they can be implemented.

Lead On!

Steve

 

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

Top 10 Ways to Help the Finance Office (part 1 of 3)

Posted on September 2, 2014 Written by

A colleague asked me how staff and lay members can help the church’s Finance Office. Here is my top ten list; yours may be different, so please let me know what I left out.      

1. Pay all bills on time

  • The church doesn’t want to be seen as a deadbeat, so get your bills/invoices to the Finance Office in a timely way so they can be paid on time.
  • The church has a Christian witness every time it pays its bills
  • If a payment is late, vendors will not want to work with the church and even tell others how poorly the church pays its bills
  • If a payment is on time or even earlier than expected, it generates good will and that is a good thing.
  1. ALWAYS attach receipts to EVERY bill to be paid. NO EXCEPTIONS.
  2. The Finance Office needs TWO weeks to process payments. This allows for sick or vacation time off in the Finance Office and for other crises that arise.
  3. The Finance Office can make emergency payments the same day, but that should be for benevolent or charity needs: medicine, housing, food, and gas for traveling to work.
  4. Fill out the payment request forms for all expenses. Make sure the following are on it:
  • Payee
  • Instructions for delivery (such as “give check to …” otherwise it will be mailed)
  • Budget account number
  • A BRIEF explanation of the expense
  • Dollar amount
  • Signature of authorizing minister

2. Using a credit card is convenient, but it has requirements

  • Every credit card expenses MUST have a receipt which is given to the Finance Office. NO exceptions.
  • Every credit card charge is posted into the financial database so that you can look back at your expenses to see what you spent money on.
  • For EVERY credit card expense, write in the budget line to which that expense should be charged.
  • Turn in all receipts as soon as you get the credit card statement.

3. Paying staff for work is a payroll expense

  • Unless you’re reimbursing staff for a work expense, all payments to staff must go through payroll. This even includes gift cards given to staff.
  • This is an IRS requirement. Don’t blame the Finance Office for this.

 

Lead On!

Steve

 

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

Publicly Available Financial Statements

Posted on August 19, 2014 Written by

Right outside the door to my Finance Office is a multi-tier tray in which I put several documents. This is part of my goal of complete financial transparency. Members (and non-members) can get any of these documents without having to ask for them and without being stopped or being asked why they want the information. Here is what I put in my financial information trays:

  • Latest Month’s Financial Statements

o   I always put out the most recent financial statements. While the church business meeting may only get a financial summary (in order to save paper), the document in this tray by the Finance Office is the same document which the Finance Committee gets. I put it out no later than the 15th of each subsequent month so that people can read current data.

  • Last Year’s Audit or completed financial statements

o   I’ve always had an annual audit, but some churches can’t afford an annual audit. If you have an annual audit, please put out copies of the complete audit so that people can read what an independent CPA wrote about the church’s finances. If you don’t have an annual audit, then put out the prior years’ complete financial statement (the document which has the information for all 12 months). People can look back at the prior year and compare it to the current year if they choose.

  • Other info: I also want to look forward, not just backward at financial information. To that end, I put out information which will help members be better Christians and give them ideas for being generous with their church.

o   Stewardship books: I make available two books which are free for the taking. The books are Fields of Gold by Andy Stanley and The Treasure Principle by Randy Alcorn. These books are inexpensive, but they are powerful. I keep the rack stocked with these books and encourage people to take as many as they want.

o   Capital needs list: Every church has long-term, financially expensive needs. However, most churches do not have a way to let members know what needs to be done. I strongly encourage churches to post a list of their capital needs – ranging from relatively inexpensive items (chairs for the children’s area) to major items (new roof or A/C units). Keep your membership informed because at some point, the church will have to pay for these expenses and perhaps someone will see this list and take care of it before the church has to pay for it.

o   Other Items: You can use this to publish information about a current capital campaign, a long-term mission project, or other things that the church needs to be aware of.

Use this multi-tier tray to keep your members informed. It’s money they gave to their church, and providing transparency engenders your donors’ trust.

Lead On!

Steve

 

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

Simple, Transparent, Expectant, Accountable

Posted on July 15, 2014 Written by

Financial statements should have these characteristics and here’s why:

  • Simple

o   Any accountant can make financial statements hard to read and interpret but that undermines their goal of being a tool which is used to help the church make better decisions (not just better financial decisions).

o   Keep things as simple as possible because most people can’t read financial statements. If the statements are too hard to read, many people will conclude that things are being hidden from them and the trust level degrades.

  • Transparent

o   All financial statements should have all church financial figures. Hiding or consolidating numbers is not good for the church. It decreases the confidence level members have in the church’s financial leaders. Besides, all the money was given by church members so they should be able to see where all the money is.

o   All financial statements should be published every month. If corporate America can put out monthly statements, then every church should be able to do that, too. I think complete financial statements should be made available to everyone who wants them every month, not just to the Finance Committee.

  • Expectant

o   By this I mean the church should have high expectations of how its money is handled.

o   It should have highly qualified, fiscally impeccable, and well-trained staff in the Finance Office.

o   Its lay leaders should give their time to know the figures and help the church understand the figures.

o   The pastor and other ministers should understand their role in teaching generosity and personal financial priorities.

  • Accountable

o   There is accountability to the church: if the leadership expectations are not being met, then the church should ask them to fulfill their responsibilities or seek others for these roles. There is also legal accountability: if anyone involved in the church’s finances has any hint of fiscal irresponsibility, then the church is obligated to remove him/her from that role.

o   All churches should have a financial audit at least every four years and in the off years, the church should have an “agreed upon procedures” audit. The AUP ensures the finance office is following best practices for a church.

These are non-negotiable items for me in a church finance office, its financial statements, and the people who work there (paid and volunteer). What are your standards?

 

Lead On!

Steve

 

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

$10 Million Estate

Posted on April 22, 2014 Written by

The Last Will & Testament of Bill & Melinda Gates is not a public document. However, some information about it is public such as the vast majority of their estate will go to their foundation. There is speculation that their three children will inherit no more than $10 million from their parents. Bill said that he wants his kids to have their own careers and that too much money would spoil them – that is seen is so many cases of affluent scions.

$10 million is a lot of money. By my calculations, it is enough for someone to live on quite comfortably for the rest of his or her life. Invested well, that money should earn at least 8% per year. If the owner “harvests” just 5% of the balance each year leaving 3% of the growth to be reinvested as an inflation offset. In the first year, the owner would get $500,000 which is certainly more than enough to live on and even be generous within that “budget.” In subsequent years, the owner will get $500,000 plus the annual 3% inflation adjustment.

What if the very rich capped how much they would leave each child at $10 million in cash (I’m speaking strictly regarding cash, not property or businesses). High net-worth families could focus on giving away everything over the line to benefit others. In their own lifetimes they would get to see the joy they bring by funding medical research, building schools and parks, providing college scholarships, and countless other worthwhile causes. And the best part is they’ll never leave their families in want.

I challenge high net worth families to let their children know that each one of them will inherit no more than $10 million and then ask them to participate in giving away everything else. What a lesson that would be to everyone – to see that money isn’t the answer for everything but love and family are.

Lead On!

Steve

 

 

Filed Under: church finances, generosity Tagged: ,
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