Capital Budgeting

Posted on August 9, 2011 Written by

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: , , , , , ,

Financial Statements – Balance Sheet

Posted on July 20, 2011 Written by

This is a pure accounting post – fair warning.

The balance sheet is a snapshot of your organization’s financial status at one specific moment in time, usually the end of the month for public purposes but it can be produced for any date of the month or year. The balance sheet is divided into three main sections: assets, liabilities, and equity. For non-profits, I have specific guidelines for each of these three areas; these guidelines differ from what you may see in other balance sheets but it has passed muster on decades of audits and reviews by Big Four audit firm audit partners.

Assets

  • Assets should only be cash assets. Cash assets means “money in the bank” – what you can actually spent as of the Balance Sheet date. My balance sheet has three lines for assets:
    • Checking account – I have one and only checking account. It is easier to reconcile and saves lots of time of transferring between banks. Having more money in one bank gives me more clout with that one bank – clout is good!
    • Endowment Fund or Foundation – this is a one-line summary of the endowment funds. The line item detail of the various sub-accounts is spelled out in the liabilities section of the balance sheet.
    • Petty Cash – if you have a petty cash bag somewhere in the church, that amount needs to show up in the assets. It’s not going to be much, between $50 and $250, but for good accounting records, you need to show that money.
  • What is not in the assets category?
    • Property, plant & equipment or PP&E (sometimes known as furnishings, fixtures and equipment) is one of the biggies not in there. Why? Because my experience is that someone will see that you have several million dollars of PP&E and say that the church already has millions of dollars in the bank. Trying to explain to Mr. or Mrs. Smith that PP&E is bricks and mortar and not dollars in a bank can be difficult. I just avoid the conversation altogether by omitting PP&E. I don’t ignore PP&E – one of the notes of the audited financial statements shows the insured value of the church’s PP&E. That should be based off of a valuation done within the past five years but it can be taken from the commercial property insurance contract for the church.
    • Depreciation is the other thing that is not in the assets. Depreciation is done purely for tax purposes. Since a non-profit does not file income taxes and thus does not take a deduction for depreciation, there is no need to record all the inventory and track all their depreciation. FYI, I track inventory differently – every few years I get a video inventory of the entire church, inside and out, so that if there is a disaster, the insurance company can value things from a picture and not from a written document. I make several copies of the video inventory and these copies are placed in several locations, onsite and offsite including with the insurance agent.
    • Accounts Receivable – I use the cash basis of accounting which means that I only record cash when it is received and when it is spent. Thus, I do not record receivables such as member pledges. People may pledge to give your non-profit some money, but there is no legal binding to require them to give you the money, only their conscience. Because I do not know if I will get their pledge or not, I do not record money until I receive it in the office. It keeps things neat and clean.
Liabilities
  • Liabilities are monies that are due to other organizations or are designated for a specific cause. I divide the liabilities section of a church’s balance sheet into several sections.
    • Payables are monies that are due to others. Typically the payables I have are for taxes, retirement, and other payroll withholding items.These are monies that were withheld from paychecks and the organization is holding them only until it is time to file with the proper authorities.
    • Donor Restricted Ministry Funds are funds that were given by people for a specific purpose such as the benevolent fund, the youth mission trip, a building campaign, etc. Legally, the non-profit can only spend the money on the cause to which the donor gave the money. If you spend the money on anything else without the permission of the donor, you’re in legal hot water (close to the boiling point!). I have this category because all of the funds in the donor restriction ministry fund section will be spent by church members or committees of the church. Members of the church will determine where and how the money will be spent.
    • Donor Restricted Missions Funds are funds that were given by people for a specific organization that is not located at the church. These funds will not be spent by church members or committees. Instead the monies are forwarded on several times a year to the appropriate organization who in turn will spend the money on their mission. Examples of these funds are national or international mission offerings and organizations with whom the church has an affinity but does not exercise control such as Habitat or a campground.
    • Church Designated Funds are funds the church set aside out of its budget and/or out of any funds leftover at the end of each budget year. Forward-thinking churches will establish reserve funds for major building maintenance items (think A/C units costing $30,000 each), office equipment (new computers), etc. The church is in complete control of these funds and can change when and how it spends these monies because these monies came from undesignated gifts.
      • A special mention to one fund. I am a strong proponent of establishing the “Unspent Ministry Fund” which is the church’s rainy day fund or emergency fund equivalent to 30, 60 or 90 days worth of revenues (whatever the church’s finance committee establishes). The source of these funds is the money that is “left over” at the end of each budget year. Instead of leaving it in the equity section of the church balance sheet, I clear out that figure to Unspent Ministry Funds. This helps in a several ways:
        • I can look at the equity line and see immediately how well (or not) the church is doing this year and
        • It clears out all profits and losses from prior years into this one fund
    • Endowment Fund or Foundation is the detail for all the various sub-accounts of the endowment fund or foundation.
      • My first presumption is that your church has a foundation – that will be a subject for a future post. If you don’t have a foundation or endowment fund, you need to get one this year – do not wait!!
      • Secondly, these sub-accounts show what the church and its members value by establishing a separate fund for a specific cause. These are the only permanently restricted accounts (for purposes of FASB 116 and 117). I work with donors to establish funds and then spend money from the fund according to their wishes. The church has ultimate control over these funds but they should spend them according to the donor’s desires. If you do that, you’ll get more money, guaranteed!

Equity

  • Church’s don’t have equity, right? Actually, they do. All the cash and all the bricks and mortar belong to the church members. If the church were to close its doors, they would have to figure out what to do with all the money and mortar. Before you think you can cash in on this, IRS regulations regarding 51(c)(3)s stipulate that the bylaws of the organization must name a successor non-profit to receive all the equity of a church should it fold.
  • The way that I use the equity section is not unique, just different. I don’t have any PP&E (see assets for that discussion) so several million dollars is missing from the equity. Instead, I have one line which shows the net surplus or deficit for the year. That one figure shows me at a glance how well or poorly we’re doing for this fiscal year – I don’t need to dig any further. The bottom line is truly the bottom line!
  • At the end of the year, I use the equity to fund several things if there is a surplus. Use the leftovers to pay for long-term things that you would otherwise not be able to afford. As I tell people, I can’t find $100,000 this year but I can find it in the next five years. Plan for the future by taking a little money each year so that at the end of several years you’ve got what you need.
    • The first thing I do is to ensure that the Unspent Ministry Fund is fully funded to the level stipulated by the finance committee.
    • The next this is to fund any reserve accounts or upcoming projects that need funding. Sometimes there are projects that need some extra money that wasn’t in the budget. Some times you need to set aside extra money for computers or a mission trip in a few years. Take a little each year and after three or four years, you’ll have the money for new children’s furniture or a youth trip to Scotland.
    • The last thing is to use the leftovers to pay for capital improvement projects in the following fiscal year. Every organization needs to spend money on its facilities but often the problem is they don’t know where to get the money. The annual “leftovers” is a great place to get them. Use that money, given by members for their church, to improve the church facilities. That will help you from needing a capital campaign to fix up the church buildings and you can tell members regularly during the year how you are spending their money to fix up their building.
Lead On!
Steve
Filed Under: church finances, church financial statements Tagged: ,

10 Ways for a Church to Have More Money, Guaranteed (part 2 – getting money)

Posted on June 24, 2011 Written by
There are two different ways for a church (or any organization) to have more money: spend less and receive more. I want to give five ideas in each category that every church should implement so they can have more money to spend on their God-given mission.
5 Ways to Make Money
  • Tell stories of how money is being used
    • The offering time is the most worst used time in a worship service. I rarely use absolutes – but this one is true. Offerings are usually filled with a prayer and special music. Boring!
    • People in the pew are dying to know how their money is being used – they have no idea what is being done with it. They’re not going to read a financial statement nor should they have to. Instead, it is your obligation to tell people how their offerings are being used.
    • Find 52 compelling stories and insert those in the offertory time. If you don’t have 52 stories, then you have really big problems. Work with the worship leader to coordinate where in the worship the offering time will fall so that the offertory and its accompanying story add synergy to the service. Insert stories that relate to the sermon, to the liturgical calendar, to the school year, to seasons of the life of a church, etc. Make the story/offering time a key element of worship, not just a way to kill three minutes.
    • Give every ministry a chance to be on the platform telling one (and only ONE) story. Tell the story about real people, real events. Give your ministries the face time with the congregation that they’ve been wanting to announce about an upcoming youth event, a mission trip, Vacation Bible School, small groups, Christmas and Easter activities, etc. This time is a “thank you” time (not an announcement time).
      • Thank you for your gifts which will enable us to send three kids to summer camp from our inner city ministry. Your money will let Sam, Sarah, and Julie spend a week in the mountains – they’ve never seen a mountain! Thank you so much for your gifts.
      • I’d like for you to see what our youth did on their summer mission trip to Boston. Because of your gifts, 23 of our kids spent a week that will change the next 60 years of their lives. Thanks! Roll it. (then comes slide show with cool music)
      • In two weeks, we’re going to launch several new small groups. We want you to be in one of these groups. If you can’t afford the book for the group, the church’s offerings will buy you a book – we feel it is that important for you to get in a group that we’re not putting up with any excuses. Heck, we’ll even pay for babysitting so you can be there. And yes, thanks to everyone’s contributions who are making this possible.
    • Is this different and will you get some flak, probably. But if you make each story compelling and have each presentation polished, you’ll begin to see results very, very quickly. Soon, the offering time will be something that people look forward to, not dread.
  • Send out statements of contribution five times a year
    • I send out statements of contribution five times: the first week after each quarter ends plus an extra one the first week of December.
      • Some churches send out statements only in January for tax purposes. Those churches see statements of contribution purely for purposes of helping members report their taxes.
      • Most churches send out statements four times a year after each quarter. Those churches are reminding people four times a year and this is a good approach.
      • A better way, without being accused of hammering the issue, is to add a fifth time the first week of December. People already feel the end of the year coming and they realize they should be more generous with their church. A first of December reminds people of how much they’ve given (or not given) to the church and provides a reminder to make a contribution. Yes, it will cost you a few hundred dollars to snail mail and email out the statements, but I guarantee you’ll get thousands of dollars you weren’t expecting.
    • As I explained in the previous post, email your statements of contribution each time so you don’t spend any money you don’t have to.
    • One other idea: ask your offering envelope service to mail envelopes once a quarter. Here’s the math: 5 statements of contribution plus 4 mailings of offering envelopes = 9 times a year that you’re subtly reminding people to give to their church. It works – try it for a year.
  • Have special offerings for specific issues a few times a year
    • Here’s a way for special offerings not to affect your undesignated gifts. During the offering time, tell the church that “On Sunday, May 16, there will be a special offering for the purpose of funding Vacation Bible School. While there is money in the budget for VBS, we need additional monies to pay for additional supplies and events that are planned. Let people know that the first $32,000 that is given will go to the regular budget but that all monies given over $32,000 will go for VBS. Thank you for your generosity for our little ones.”
    • The $32,000 needs to be whatever the treasurer feels is a regular Sunday offering – the amount that would normally come in that Sunday for basic operations. Anything above that would be gravy as far as the treasurer is concerned.
    • Then, promote that special offering for about four Sundays before the date by using the offering time to show slides of last year’s event, interviewing kids about their experience last year, etc. Take up the offering (while having kids promote this year’s VBS).
    • Any money that you get over your threshold amount will help lower your budget. If you don’t spend all you received, then you can set it aside for next year’s VBS and take up a special offering for something else.
    • Caution: you can only do one or at most two special offerings a year before you hit donor fatigue. Alternate what you do each year so there is variety and so these offerings don’t get old. Some key emotional draws are children and mission trips – these are always powerful.
  • List of capital needs – items that the budget cannot afford
    • Make a list of items that the church needs for its ministries. This should be a list that encompasses all ministry areas and which ranges from small amounts to very, very large amounts. Update that list every year by adding to it, subtracting from it, or changing items. Make the list dynamic and, very importantly, make sure this list supports the vision of the church so that no item on the list detracts from the focus on accomplishing the church’s goals.
    • Publish this list and make it available to everyone. Let people know what you would do with the proverbial “lottery jackpot” should you ever receive it. People will talk about the list in the halls and every so often, someone will approach a minister to ask for more details about an item on the list. Then, there is a good chance that this person will write a check.
    • Sometimes people will surprise you by writing a check for something that you don’t see (because you see it so often, you’re blind to how bad it is) or that is lower in your priority list. That happened to me a few months ago – an anonymous donor gave $20,000 for a specific need that we didn’t see. Fortunately, the donor also gave us the freedom to use it for something else – but we went with the donor’s original intention. I expect that later this year, when this donor gets his/her bonus, we’ll get another sizable gift because we followed the original instructions last year.
    • Another way to find money for this list is to use any left over funds at the end of a fiscal year. Sometimes churches have more money that is given than is spent. I use those funds, with the permission of the Finance Committee, to address some of the needs on the capital needs list. Since we don’t know how much money we’ll have, we select the items on the capital list after we have a figure. We tell the church how we’re going to invest their money back into God’s building and needs.
    • Some items on the list are so expensive and/or extensive, that funding these is done over several years, in phases. The trick here is to continue to do them and not quit halfway.
    • Remember: itemize, monetize, prioritize, publicize, and thank you-ize!
  • Develop a relationship with wealthy individuals
    • I addressed this in a prior post, “Robbing the Rich.” I’m not going to re-hash it here but please read it.
    • I cannot overemphasize that every church has wealthy attenders and members. The wealthy don’t have a problem talking about money – the problem in having a conversation about money lies with us, not them.
    • I encourage every pastor to develop a list of the top 25 (pick a number) of donors to the church and once or twice a year, have coffee or a meal with them. Do NOT ask for money – just be their friend.
    • I can guarantee that if you befriend them, they will see and hear your heart just as you will know theirs. At some point, they will ask you about giving money long before you are ready to ask them for it!
    • Read the post for more details.
Now, go implement 2, 3, 4 or even 5 of these ideas. If you want more details about them, email me: steveplaw@gmail.com and we’ll talk. I guarantee you’ll get results!
Lead On!
Steve
Filed Under: church administration, church finances, church financial statements, planning, 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: , , , , ,

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: ,

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!

 

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