A Penny Saved …

Posted on April 28, 2010 Written by

I just filled up my gas tank (for future history, today gas was selling at $2.759 in Richmond, VA). Whenever I get gas, I look around the ground for pennies. I didn’t find any today. I haven’t found any pennies (dimes or nickels) for several months. This is one of my indicators of the economy.

A few years back, when the economy was doing quite well, I almost always found loose change when I filled up with gas. It seems that in those days, it wasn’t worth the effort to pick up pennies or nickels and people just left them when they were dropped. Not any more.

About a two years ago I noticed that there were fewer and fewer coins on the ground. About 18 months ago I noticed they were almost all gone and officially, in spring 2009 there wasn’t any more loose lying around. Here’s my prediction, when you fill up with gas (or go through a fast food drive through) and you see coins on the ground, then you’ll know that the economy is back and healthy. Here’s my second prediction, you really won’t see those coins on the ground until about six to nine months after the economy has turned the corner.

What I’m talking about in the context of churches is this question, “When will people feel generous again?” For church economics, two things have to change:

  1. The economy has to turn around in a visible, tangible way. Actually, as of right now (barring a major economic or terrorist event), the global economy is making steady headway out of the mires of 2008-2009. In about 3 months (summer 2010), the US and other first world countries will be on the financially-healthy rebound. But just because things are better financially does not mean people will be charitable or generous.
  2. The second thing is that people have to feel financially-healthy in order to be generous. The feeling of angst that people have right now (will I have a job tomorrow?, will I have enough to pay my bills?, etc.) must be eased a lot before they will respond to church pleas to give more. Churches need to help educate members to get in a more personally financially-healthy place (Crown Ministries and Financial Peace University). When churches do that, then their members will feel more generous. It takes people about 6-9 months after the economy has turned around for them to feel charitable.

Two questions for you:

  • Are you helping people get their financial house in line with God’s plan for their financial house so they can be more generous faster?
  • Or are you waiting till you see pennies on the ground as your indicator of when people are feeling more generous?
Lead On!
Steve
Filed Under: budget, church finances, planning, wisdom Tagged: , , ,

Retirement – how much

Posted on February 26, 2010 Written by

How soon you are able to retire depends on how much you have invested in your retirement fund. Whether you want to retire depends on whether and when you want to retire.

Cut to the chase – how much do you need?

  • Take whatever you believe you need to live on and divide it by 5%. The thinking there is that if you have $2,000,000 saved up, you can tap 5% of that per year to get $100,000 to live on (presuming that is the figure you want/need). Figure out what the figure you need to live on, then divide by 5%.
  • Remember that the figure you need to retire is going to be different than what you need in 2010 dollars – both to the good and to the bad.
    • When you retire your taxes will be lower (if you retire at or after age 65).
    • When you retire, you will hopefully have paid off your house and not have a mortgage to pay.
    • When you retire, remember that inflation will increase the amount of 2010 dollars you’ve calculated you’ll need – project that out at the annual average inflation rate of 3% for the number of years left till you retire.

Okay, how much should you sock away each year? I’ve heard three different figures:

  • 10-15%
  • 14-18%
  • 15% of your own money plus whatever your employer puts in. This is what Dave Ramsey says. Dave also says that you shouldn’t count on Social Security and I agree with him. And what is the downside, if Social Security really does happen for you, guess what, you got some extra money!
  • Bottom line, put in 15% of your gross annual wages each year plus whatever your employer chips in.

If you can afford to put in more, do it. Put in as much as you can. After all, when you get your statement from your retirement fund, at some point I hope you’ll be able to go to your boss and tell him that you’re retiring and he can find someone else for your job – you’re new job is watching the waves come in on the beach!

If you can’t get to the 15% this year, then start and work your way up every year. When you get your pay raise, go straight to the Human Resources office or officer and increase your personal contribution to your retirement fund by 1%. After several years of doing that you’ll be at 15%. Yes, it will affect how much you can have now to spend but you will also not pay taxes on those monies you’re investing.
What funds to invest in? I’m not going to tell you. I’m pretty aggressive in my personal investing and so far it’s worked out well. I did bail on stocks at the early stages of the 2008 recession and got back in to equities in early 2009 so I dodged some (but not all) of that bullet. Rule of thumb, invest your age in fixed income and the rest in equities. I do about half my age but as I said, I’m fairly aggressive and I monitor it regularly.

Who to use? Any one of the big boys. I personally like Vanguard but that is a personal decision because years ago I was at a meeting in Philadelphia. During the lunch at a local church, I was served tea by the wife of the founder of Vanguard. I was so impressed that a woman worth hundreds of millions would willing serve tea and water to guests of her church – I just knew that said a lot about the company her husband founded. So, I use Vanguard but other companies such as Fidelity, T Rowe Price, and Tiaa-Cref are also very good.

As Dave Ramsay says, “Live now like no else so that later you can live like no one else” – meaning, you’ll be able to retire while they are still working!

Lead On!
Steve

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

Financial Resolutions 2

Posted on January 4, 2010 Written by
The next set of financial resoutions for churches from Brad Leeper of Generis.com
3. Conversations must move beyond stewardship to generosity
With all due respect to the biblical concept of stewardship, the term itself is passive, hard to understand, and boring. In the secret places of the heart, people do not long to be good stewards. They do long to make an impact. To be a difference maker. To be generous to the point of giving up something that is good in exchange for something that is better.
Churches that celebrate generosity become more generous. Churches that are silent about generosity become zealous about cutting expenses. I have lived in that cutting expenses season. Experiencing generosity is much more fun. Try a vocabulary shift in 2009. Replace stewardship with generosity and unpack the stories about how the generosity of your church changed lives. Watch your giving flourish.
4. Churches must speak more intentionally about finances
Economically tough times create intense static in the minds and hearts of your people. Consider that we have been accustomed to a consumer driven lifestyle accompanied by $3 cups of specialized coffee and the internal confusion hits decibel levels too loud for even 18 year old rockers. Where do your people stand in juggling financial realities? According to a USA Today article May 2008:
· 9 out of 10 consumers in their 30s are in debt.
· 45% of respondents in one survey said they had too much debt to think about saving. Do we think the answer is any different about their generosity?
· 20% of adult in their 30s are still paying college loans.
Another source reports that Americans now save, on average, less than 1% of their income. How can we expect people to give generously when their margin is already so razor thin? Be daring in your coaching. Teach people how to get out of debt. Teach them how to save. Inspire them to live above the roar of our consumer-driven machine.
When I perform a giving analysis for a client, it is very typical to receive a list of regular attending households (OK, relax. I do not ask for names) with over 50% of those households having giving nothing in the last year. I have had pastors tear up when they realize that they are the number 2 top donor in the church. Your people are not as up to speed about finances as you think they are. The church that preaches and teaches about sound, biblical financial practices will create a long-term culture that gives abundantly to match its compelling vision.
 

Lead On!
Steve

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

Financial Resolutions 6

Posted on January 4, 2010 Written by

The last set of financial resolutions for churches from Brad Leeper at Generis.com

9. Human need trumps brick and mortar
Pastors tend to like ministry and facilities large. People like church to feel small and relational. Pastors understand how facilities are tools to reach more people. Most people, however, are less concerned about the facility and more concerned about human need. It is the new normal now to include the human element in vision expansion projects. Church planting, multi-site, a clinic in Africa, homeless ministry in the community, and similar high human touch elements are increasingly expected in major projects. Human investment validates the construction.
A colleague worked with a client’s vision expansion project that had nothing to do with any construction undertaking. Every investment dollar flowed boldly to planting churches around the city. The multiple of annual income raised was incredible! A clear connection on how personal giving reduces human need throws gasoline on generosity.
10. Free yourself from the past. Your church members have.
The recent Barna report on giving in 2007 repeated the same theme from prior years. Just 5% of American adults tithed. The most generous segment, evangelicals only topped the charts at 24%. The numbers have remained steady over the decade. We are anemic as a church in prompting generosity.
Trends in giving, however, are shifting more radically than ever before. For those of us passionate about the local church, Barna sends up a bright warning flare. People are changing how they relate with the church. No longer content with standard church interaction, they are “expanding their circle of Christian relationships beyond local church boundaries.” People increasingly give their money to organizations other than the church.
I served a client this past year that had small groups unofficially connected with their church in multiple states. This strategy was not intentional nor were these groups even supported by the church. The groups emerged from a meaningful interaction with the church podcast ministry. These groups gave generously to this church without a hint of request by the church.
There is an increasingly sophisticated donor in an ever increasing competition for the faith dollar. A challenging economy will accelerate the competition. Many donors fail to connect how their attendance at your church translates into giving practices to your church.
If inspired, motivated, and simply prompted, however, people would still rather give to their church. Our silence leaves them uninspired, unmotivated, and believing that we have no need of financial resources. The church that shifts generosity dialog and practices to better match the shifting patterns will receive substantial resources.
Conclusion
As we consider ministry plans for the new year in the midst of economic uncertainly, understand the urgency of making adaptations to your giving practices. You will find the process engaging, energizing, and incredibly meaningful to your people. They will be transformed with an amazing collaboration with their investments and God’s call on your church.

Lead On!
Steve

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

Financial Resolutions 4

Posted on January 4, 2010 Written by

The next set of financial resolutions from Brad Leeper of Generis.com

6. The church must intentionally build greater trust with its people

Most church giving, especially project-driven giving, is in direct correlation with the trust account balance with its people. How often and how creatively can you build the trust connection that gives people instant freedom to say yes to a spiritual investment? Your people might love the primary teaching pastor. They most certainly love the people of their church. Significant trust comes from neither of these sources. Shaping confidence is a neglected art.

·No bank account replenishes itself automatically after a withdraw. So too must church leadership constantly make trust deposits.

·How can we increase our trust account?

·Tell people frequently how their financial gifts are being used.

·Teach how they are building treasure in heaven.

·Celebrate generosity at each offering.

·Help people understand how financial accountability is a big deal in your church.

·Maintain an open atmosphere about your finances.

·Unapologetically spend money on an annual, independent audit and proclaim the results of the clear audit. Make audit copies available in your lobby.

·Leaders appropriately share how they give.

·Send a thank you note to a household after their first gift to the church.

As we swim in these economically turbulent waters, consider more radical moves to build trust.

·Stop ineffective ministry even though you will take hits. People are having to adjust their budgets by stopping spending that they would rather not stop. Model for them how to adjust spending patterns.

·Redeploy budget line items to more practical human needs. Food banks, justice ministries, fighting child slavery, mercy ministries and other such works are perceived as far more important than operating expenditures. If the economy worsens, you will need to support some in your church to ride out the storm. Consistently building trust accelerates generosity.

Lead On!

 

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

Financial Resolutions 3

Posted on January 4, 2010 Written by
The next set of financial resolutions for churches from Brad Leeper of Generis.com
5. Churches can still raise financial resources for major projects if … Churches that successfully raise additional funds for major projects make an audible from classic campaign approaches. Donors are eager to give to the right projects if we adapt our methods from past practices. People eager to give generously look for certain qualities in a project before giving. Their decision making grid is radically different than even just a few years ago.

 ·Generous people look for more specific benchmarks and ask much harder questions in search for validation of the project.

 ·Does the project make sense? Is the reason to give sacrificially clear and compelling?

 ·Has the leadership thought this project through? Has the leadership done due diligence? Just because the pastor loves this project has little bearing on my love for the project.

 ·Would my investment directly help people? Buildings do not inspire me.

 ·There are far more attractive projects outside the church that appear more meaningful to me. Just because I attend church here does not mean that I automatically buy into your project.

 ·Does this project help the poor?

 Give a change of pace from predictable practices to foster generosity. Even though much of my work centers on capital campaigns, I fight hard to keep those two words from my interaction with clients. Most of my clients call their effort a “mission expansion project” or “vision expansion project”. Stewardship is replaced by generosity. Vision casting and telling gripping narratives begin months in advance not compressed into a five week package. Print media is replaced with moving video work that is viewed repeatedly on YouTube.

 

The traditional three-year giving period for a mission expansion project can be shortened. People are increasingly skeptical about long-term commitments. A fast growing church can actually be hindered with a long giving season. Churches that have made adjustments to converse with a new kind of donor still cultivate significant resources for their vision.
Lead On!
Filed Under: church administration, church finances, leadership, planning, strategy Tagged: , , , ,

Financial Leadership Mistakes Churches Make

Posted on October 26, 2009 Written by
  • Low Expectations of members – Are people living up to our low expectations? How high do churches set the bar or are we just too scared that people will go away? In reality, people are more willing to live up to higher standards if they know what they are.
    o Set the bar as high as God sets the bar. To do less is to undermine God.
  • Low Teaching by leadership of biblical financial principles – Many church leaders are scared to talk about money because they don’t know how to. They don’t know how to talk about money because they’re scared to talk about it. They’ve got to get off the merry-go-round. Find a God-model for your talk on biblical financial principles – “just because the church needs it” or “because tithing is biblical” is not sufficient.
    o Make biblical financial teaching a regular practice. As with all habits, once you do it enough, you’ll get used to it and do it regularly. However, get a God-model to challenge your members.
  • Low Accountability of church leaders (both paid and volunteer) – Who holds church leaders accountable for what they spend and how they spend it? Do those expenses advance the Kingdom or are they just frivolous spending?
    o Can church members get a copy of the church’s monthly financial statements without hassles? If your church’s checkbook were posted online, would you be embarrassed at any expenses? Did they spend church money wisely? I have a saying that church money should work hard twice – once when the donor earns it and again when the church spends that money.
  • Low Transparency of church finances – Do churches have fuzzy numbers? A church’s monthly financial statements should be in a readily accessible place and questions should be answered clearly and completely.
    o Make your financial statement accessible. Answer all financial questions to the satisfaction of the person asking the questions.
  • Low Leadership and Management – Leadership is guiding the church toward a vision that captures most people’s imagination and gets them on board the ship. Management is ensuring that you have the right people in the right places on the ship and rowing in the same direction. Leadership is about positions; management is about people.
    o Every five years do strategic planning so that you know what positions your church needs in order to accomplish its mission and vision.
    o Then, find the right people to put into those positions even if it means letting go of some great staff. If they can’t lead the church in its strategic plan, then help them move on so that your church can move forward.
    o This means that every few years you’re going to kill some neat programs that no longer fit into the church’s mission and vision and you’re going to let go of some fine friends and colleagues. But you’re the leader of the church – decide what is most critical to the future of the church – its mission or keeping people and programs that distract from the main thing.
Lead On!
Steve
Filed Under: church finances, communications, generosity, strategy, young adults Tagged: , , , , ,

Email to a Colleague at my Church

Posted on October 23, 2009 Written by

I thought I’d share an email to a fellow minister. My goal is to get ministers and members to think “outside the financial box” and think if new ways to get money for church needs, especially capital needs.

For a couple months I’ve heard you all getting info about new drop down backboards for the gym. The latest figures I have are costs in the $24K range which is way out of anyone’s budget and designated funds. That got me to thinking about asking the Upwards parents if they would be willing to make a gift or contribution to this project.

In my years as a church administrator, there have been countless times when people wanted to make a gift and asked me what are some pressing needs. My experience is that people want to give back to a ministry or the church that has blessed them or helped them. Unfortunately, the church too often feels that “we can only do it if we pay for it” or “that’s rude to ask people for money.” Both of those concepts are wrong – we shortchange people when we don’t give them the opportunity to give. People want to return the favor, we just need to be open to it, especially to be open to new ways of paying for the church’s needs. Having been in church business for my entire life, I can see a distinct pattern downward in the typical way of funding church – the offering plate is drying up.

I’ve been in multiple conversations with members of the church’s financial leadership team, Ministry Coordination Council members, and the senior pastor on the subject of developing new streams of revenue for the church. The senior pastor asked an MCC member and me to make a presentation to MCC in November on the why and how of new revenue streams. This is a subject that is gaining importance and visibility within our own church.

The Minister of Recreation and I partnered recently on a basketball camp that was a tremendous success and we split the revenue – some for the Rec Ministry and some for the building maintenance (to fix holes in the walls from “stray” basketballs). This is a great model for how we can move forward to fund needs of various ministries and the buildings. I would like to propose that you consider yet another stream of revenue to help meet a need of the Rec Ministry – the backboards.

The idea is that for two of your eight Saturdays during the Upward games, you will distribute a half sheet of paper with the message below. The message is not threatening or guilt-inducing. Instead is makes known a need and gives people the opportunity to respond if they want to. It tells them how they can help a ministry of the church and thanks them for letting us be a part of their life. This is not a solicitation (which our church’s by-laws won’t let you do), it gives people an chance to respond. I truly believe that it is right, ethical, and scriptural to give people the chance to express their gratitude without any form of compulsion. To not give people a chance to give is to limit people and God.

In future years (or even this year), I can easily see the gift request during Upward to be for ministry opportunities in a church in Richmond, or with one of our foreign mission partners, or another recreation oriented need beyond our walls. Perhaps alternating years (between our church and another need) or even doing a split offering in the same year for two separate needs? There are many opportunities and tremendous needs out there – the real question is how can we think creatively to help meet these needs.

Will the Rec Ministry be willing to distribute this message below to its parents? Who knows what God will do through this. Thank you.

New Basketball BackboardsThe Recreation Ministry would like to install four new basketball backboard so that future Upward Basketball seasons can have better equipment. These goals will hang from the ceiling and replace our aging and hard to move floor level goals. Each new backboard costs about $6,000 or $24,000 for the entire project.

Gifts to this project are being accepted by Recreation Ministry if you would like to help. Checks can be made payable to the church and write “basketball backboards” in the memo line and given to a staff member. These tax-deductible donations are not required – it is our joy and privilege to have your child in the Upward program. Thank you for entrusting us with your most precious gift. We hope you and your family have enjoyed it and we hope to see you next year.

Lead On!
Steve

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