Church Personnel Committees

Posted on April 26, 2011 Written by

My experience with Personnel Committees is that they don’t know their own job description. Too many times the committee acts more like a “Human Resources Department” than a personnel committee. Let me explain the difference.

A human resources department provides all the forms for new staff and departing staff, ensures those forms are complete, interprets the personnel manual for staff, works with vendors to get the approved benefits at the best possible price, and handles other routine personnel needs. Frankly, those are all functions that in a church should be handled by the staff and not by a committee.

A personnel committee of a church is vastly different. A personnel committee should do the following

  • Develop a personnel manual and review it at least once a year for updates
  • Develop a salary structure and salary range so that all employees are treated according to their “pay grade.” Most churches have no concept of this much less how to go about creating salary ranges. However, it is essential that a church do this to help their staff.
  • Hire the senior pastor and give him an actual, honest job performance evaluation. This may include an annual 360 eval for the pastor; that is a good thing so that he can have a true sense of his leadership and his management.
  • Help the senior pastor with his direct reports. The senior pastor may need counsel on who should report directly to him and who should not. The pastor may need help with the job descriptions of those who report directly to him. Finally, the senior pastor may ask for help in recruiting the people who work most closely with him.
    • For the most part, I disagree with the notion that there should be a search committee for positions in the church below the senior pastor – the leaders should be able to hire those whom he feels will work best with him and not have a committee decide for him (after all, shouldn’t those lay members be doing Kingdom work and not be the HR department?).
    • The senior pastor should have the freedom to select his lieutenants and craft their job descriptions with the advice and counsel of the personnel committee, but not their veto. Those leaders, in turn, should have the freedom to select the second level of leadership without having to jump through hoops of lay people. Some, but not many, lay people are qualified to help in recruitment; it’s just that they could be doing something else for God instead of having meetings.

So, if you’re in a personnel committee, ask the committee chair for a job description of what the committee is responsible for. If that JD needs to be updated because the church has grown and/or changed, then do it! If there is no JD, then help the pastor and committee chair develop an appropriate description of responsibilities for the personnel committee. A good one will save the committee members a lot of time and grief, it will help the pastor and staff know what everyone is charged with doing, and it will ensure that everyone is doing what is expected of them.

Lead On!
Steve

Filed Under: church administration, church staff Tagged: ,

Adults Have Wallets

Posted on February 24, 2011 Written by

Several years ago my wife worked for a pastor in North Atlanta. The church grew incredibly fast: in a few years it went from a couple of hundred people to over a thousand. The growth was because it was the only Baptist church in an area of Atltanta that exploded in population. The church built buildings as fast as it could afford. They created a master-plan and communicated to everyone what the plans were for future expansion of the facilities. But the need for buildings meant that they had to rent some trailers for temporary housing of some Bible study classes.

The pastor and other leaders made the decision to put adults in those mobile home-like classrooms. He took some flak for that decision. Here was his response, “Adults have wallets, chidren don’t.” If the adults were uncomfortable with their trailer classrooms, then the adults should give more so the church can build more rooms. It worked. Within a dozen years the church had completely finished their master planned campus. It is really nice. I’m sure they still have debt, but everyone is in the same set of buildings all because the pastor was willing to challenge the people with wallets, adults, to give more.

Lead On!
Steve

Filed Under: church finances, generosity, leadership Tagged: , ,

Offerings

Posted on February 19, 2011 Written by

Offerings are to many worship leaders one of the most awkward times of a service. So, they fill it with special music to distract people from the passing offering plate. I regret that. I’d like to offer a different way of viewing the offering time but one that will require some work and planning.

The offering takes about 90 to 120 seconds in the average church. I suggest that in that time, you tell a story. Tell stories about how the offerings have been used in the past week to tell how a missionary did some really cool work, how a family was fed, how a minister did some counseling, how a teen publicly said he was going to be a Christ-follower, how a mission team to Africa did some awesome things, what the youth trip this summer will be doing, how many kids were at Vacation Bible School and what they studied, etc. Find 52 stories in a year and tell the church how their money is being used.

Younger generations (under 40) want to hear stories about specific people being helped with the money they give to the church. That will motivate them to continue to give and give more money. Older generations like to hear the stories, too.

So, use the offering time to TELL STORIES. After all, that’s what Jesus did!

Lead On!
Steve

Filed Under: budget, church finances, strategy Tagged: , ,

Churches as Businesses

Posted on December 1, 2010 Written by

Every so often someone will tell me that “the church is not a business and shouldn’t operate as such.” Just as frequently, I get the comment, “the church really is a business.” So, which one is correct? Well, let me say unequivocally, both are right. Here’s why and why not.

Churches are businesses in that they have the same basic building blocks of a business – every church has:

  • operating budgets
  • staffs
  • “products” (in churches it is “intangible religious benefits” in IRS terms)

Churches are not businesses in that they have a different purpose

  • Their goal is to give to people, not get from people
  • Their goal is empower people to give away more to other people

The foundational structure of every church is business-like. The programming of churches is not necessarily business-like. However, I need to clarify one area there where churches should be more like a company: evaluation.

Churches shy away viscerally from evaluating their programming. They hide behind the phrase “but if it helps just one person, it was worth it.” After 35 years in church work (I worked in a Christian bookstore as a teenager), I feel that churches must evaluate almost everything they do. They can’t hide behind the trite phrase of helping just one person – I do not believe God honors that (or better said, God blesses even more those ministries that are regularly evaluated and improved). The church today must evaluate its staff, buildings, and programming.

Staff: many churches do an acceptable job of evaluating staff but it is frequently a look back and not setting goals for the future. Staff (from the pastor on down) need to be assessed on what they did in the past 6 or 12 months against goals that were established for those staff. Too infrequently bosses fail to set expectations for staff so that there is nothing against which to measure the staff. Then you have the hard part, staff that is not performing need to be encouraged/mentored if they have potential. But if there is no chance that a staff member is going to succeed in your church’s environment, then that person needs to be terminated. Termination is very hard on everyone but in the long run it is beneficial to the rest of the staff and the church. In the words of Spock from Star Trek, “the needs of the many outweigh the needs of the few, or the one.” Pruning is hard, but it leads to greater growth in the next season.

Building: this represents sunk costs. A church has already built and paid for those bricks and mortar. But the evaluation should be, “is what this building was originally built for still a viable option or should we change the building to meet future needs?” Buildings can be retro-fitted (for a price, yes) for needs that the church leadership feels is coming up. Do not be wedded to the past “just because we’ve always done it that way.” Years ago I learned how the new anti-termite pesticides work: the chemical inhibit the termites from shedding their old skin when they outgrow it. Thus, the termites strangle inside their old skins. Don’t let your church do that – change your skin as often and necessary to keep the church from killing itself.

Programming: by far, this is the most politic- and emotion-laden area of church work. People have invested their own blood, sweat, and tears in their pet ministries and feel that any mention of cutting them is a threat to them personally. Evaluation is not acceptable and they play their trump card almost immediately – “God is using this ministry.” My grandparents decided that a car was better than a horse and buggy; my parents decided that telephones are better than letters; my generation decided that computers are better than typewriters; the next generation is totally committed to the internet (which is replacing just about everything!). Change is painful but evaluation is an absolute necessity if a church wants to grow or not lose ground.

Evaluation is a matter of opinion – not everyone will evaluate the same program or person the same way. Church leadership needs to determine how the evaluation will occur and how the results will be implemented. That cannot be explained in a blog – every church has a unique culture and that culture must form part of the decision-making/evaluation process. But please heed this note of warning: to do nothing, to not evaluate things on a regular basis, is to ensure that the church will continue its present track with no heed to the future of the church. If you want a biblical example, read Acts 15 when the church in Jerusalem struggled with whether or not to permit Gentiles to be part of the church. Enough said.

Lead On!
Steve

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

Resources, Insources, and Outsources

Posted on November 7, 2010 Written by

Several years ago, Dr. Al Sutton of the 6th Avenue Baptist Church in Birmingham, Alabama, spoke to a group of church administrators. D. Sutton used the biblical text of Jesus feeding the 5,000 men (or about 25,000 men, women, and children). It was getting late and the people were hungry. The disciples asked Jesus to send the crowd away. The disciples wanted to outsource the problem but Jesus insisted on “insourcing” the situation. Then the disciples said they didn’t have any money and Jesus replied, “what resources do you have and lets see how we can use that.” Dr. Sutton thanked us administrators for putting up with pastors who want to imitate Jesus by insourcing problems and by telling the finance people to just use whatever you’ve got (without fully knowing what there is to begin with). I’m not doing Dr. Sutton justice with this brief paragraph, but you get the idea.

Every day Christians (and non-Christians) ask God to make personal problems go away. If the issue will only disappear, then there won’t be a problem, right? We even throw Jesus back at God, “If we have faith the size of a mustard seed, God will solve everything.”  God wants us to deal with issues – not run from them. God wants all of God’s disciples to get involved, to get our hands dirty, and to “insource” problems. God doesn’t outsource – God uses you and me. BTW, I’m not talking about medical, ethical, or legal problems – those have tangible consequences and are a matter of much prayer; sometimes God does intervene in human events in miraculous ways to cure diseases and take care of situations far beyond our powers and require divine resources. But what is within our control, God wants us to confront and deal with directly – not push aside.

Next, Jesus asked about the resources available. All too often we tell God that we don’t have enough; that if he’d only provide more we could do more; that the problem is too big for our meager resources. Jesus isn’t about what we have – he’s about what God has. I don’t like it one bit when God tells me to start out on a project when I know that I don’t know the way or have the material goods to finish – I even tell God about the parable of the king who went to war without counting the cost. Invariably God tells me to keep going and trust him. I know it sounds corny and trite, but it is true (about trusting God for daily needs – not daily wants).

So here’s my stewardship lesson for all who read this – all Christians must get involved using every bit we’ve got. Asking God to take the issue away won’t solve anything. Problems are opportunities for God – stop telling God to take some issue away that you don’t want to deal with. Next, use all the resources (time, energy, money) to address the opportunity at hand. As you’re in the middle of the issue, you may be surprised to see God at work and multiplying resources more than you thought possible. Or it may be like the disciples, only after the event is over and some time (hours, days, or months) has passed, will you be able to reflect on that event and see how God was at work. But rest assured of this, God is always at work!

Lead On!
Steve

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

Personnel as a Percentage of the Entire Budget

Posted on October 14, 2010 Written by

Every year the question comes up, “Is the personnel budget too big?” Some people actually mean, “Are we paying the staff too much?” and that is a question that hurts. In reality, it shows the ignorance of the person asking the question more than anything – they have no idea what their staff does. But more often than not, the intent of the original question is concern over the size of the staff (number of employees) and is that cost appropriate for our church. Here are some figures that I gathered from my local colleagues regarding their church’s 2011 personnel budgets:

  • 40.00%
  • 53.58% – does not include food service or custodial personnel
  • 48.00% – does not include custodians; church also pays $400,000 in debt service
  • 54.00%
  • 47.80%
  • 52.60%
  • 55.76%

From this data, you can tell the personnel team, inquiring church members, and curious onlookers that a range of 40%-60% is within the “normal” range. Feel free to use this info and share it with others – it might help you from those who feel the staff is paid too much or the staff is too big.

BUT, the real question is, “How much staff do we need to do what we want to do?” That is a completely different question and it is too deep to unpack here. However, I do want to wade in ankle-deep.

Most church staffs grow organically – that is, stafff members are added progressively every year or two as the church grows. This is the normal and customary route. Oh, we need someone to help the youth minister, hire a part-time middle school coordinator; our seniors are feeling neglected, hire a retired minister (he can use the income) to take care of the seniors; our current custodians aren’t cleaning the building well, hire another one.

Let me suggest a better method – strategic growth. Strategic growth is more painful in the short run but far more productive in the long run. Because of the time needed, cuts in staff that result from this, and the ensuing time needed to educate members and implement the new structure, I suggest that churches only do this at most every five years.

Strategic growth, in a nutshell, is when church leadership (ministry council, elders, etc.) looks at the “five-year plan” that every church should have. Simultaneously, the council gets a conservative estimate of income for each of the next five years. With those two pieces of info, the council decides what is the #1 goal for the next five years (that thing, without which, the church would cease to exist) and then funds that with staffing, programming, and building money. The council then decides what is #2 and funds it appropriately and so forth until the estimated money runs out.

When the council has run out of money to fund its strategic plan, all other items on the priority list are cut. That means that some staff will be cut, some buildings may not be built or may be renovated, and some programs and ministries will no longer be done. That is going to please some members and anger others – this is where the hurt and pain come in. You’re not going to please everyone, but you will please God as the church uses its resources (staffing, building, and members’ time for ministries) in a strategic method.

A lot more can be said about this but I think you get the idea of where to go from here. I do feel that if strategic staffing and programming is implemented, you’ll be able to look back and be amazed at how far how fast the church went.

So, next time someone asks, “How big is our personnel budget?” return the question with one of your own, “Are we spending personnel dollars in the right way?”

Lead On!
Steve

Filed Under: budget, church finances, church staff, leadership, strategy Tagged: , , , ,

Getting around the FDIC cap on insured bank balances

Posted on June 9, 2010 Written by

About three years ago, a new financial service came available which addresses the issue of the FDIC cap of $250,000. This service, known as CDARS (pronounced like the tree), is explained in full at www.cdars.com. Some banks have purchased this service and some have not; check with your bank to see if it participates. In a nutshell, this is how it works:

• Your church buys a certificate of deposit (CD) for a little less than $250,000 (in order to have any interest earned included in the $250K cap).
• The CD you purchase is actually a CD in First National Bank of Peoria (for example). In turn, First National Bank of Peoria buys a CD from your bank for the same amount. These two banks are cooperating in the CDARS program and have just exchanged money that is fully insured through FDIC.
• You buy as many CDs as you want, all from different banks around the country, to cover your financial assets. The maximum amount you can invest in CDARS is $50 million (I don’t think that’s a problem for anyone).
• The CDARS program does several things:
o It insures as much money as you want to have covered
o It invests the church’s money through one financial institution so you get one bank statement (which means you don’t have to deal with a dozen banks and their statements)
o You earn interest at the going CD rate (which is very low right now – about 1% per year – maybe it will go up soon?)

This is how my church puts this in practice
• My church has a cash balance of about $1.8 million (not unusual for a megachurch)
• We purchased 12 CDs for $100,000 each (that $1.2 million plus the $250K insured through our bank covers the bulk of our demand deposit balance)
• These CDs are laddered so that one comes due every month.
• All interest earned is put into the church’s checking account (which is added to the church’s financial statement and pays for the operations of the finance office)
• Each month our bank notifies me by email and I sign and email bank a document approving the next CD purchase – it is all handled electronically
• This church has a line of credit of $1 million. Because there are severe penalties (invasive of principal) for early withdrawal of a CD, the church will tap its line of credit should there ever been a financial need. Then, we’ll pay back the line of credit as CDs mature each month.
• My finance committee members were not aware of this program and several of them took it to their companies!

If you have questions or want someone to talk with me about this, I’ll be happy to help.

Lead On!
Steve

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

Change

Posted on May 17, 2010 Written by

I heard it last week from my financial assistant: of the reported revenues for the prior week (total of $56,000), around $29,000 came in the offering plate. That means that about $27,000 came to the church outside the offering plate: in stocks, online gifts, mailed in offerings, etc. This is a change: for years churches felt that the offering plate was their primary source of revenues. Well, I can document that as of last week, things are noticably changing – only 52% came in the offering plate.

That is huge for churches. Church financial leadership must understand that the way of giving and supporting church work has already changed. If churches are not on the “change bandwagon,” then they are leaving some financial gifts “on the table” and not in their offering plates.

So, what are you doing to facilitate giving to your church? Are you making it easy for people to give in new ways? Or are you still relying on the offering plate to provide 100% of your revenues?

Lead On!
Steve

Filed Under: budget, church finances Tagged: ,
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