Tuesday, May 15, 2018

Knowing the Giving of Congregants

Question: Hey Fletch...What is your position on the XP knowing the financial giving of: a) the entire congregation, b) volunteers and key leaders, c) staff & elders, or d) none at all.

Answer: Whew, those are tough questions! The answers are based on the culture of each church. The congregations where I have served took the position that pastors should have no knowledge of any person’s giving or giving pattern. They based that view from this passage:

My brothers and sisters, do not show prejudice if you possess faith in our glorious Lord Jesus Christ. For if someone comes into your assembly wearing a gold ring and fine clothing, and a poor person enters in filthy clothes, do you pay attention to the one who is finely dressed and say, “You sit here in a good place,” and to the poor person, “You stand over there,” or “Sit on the floor”? If so, have you not made distinctions among yourselves and become judges with evil motives. (James 2:1-4)

The Bible Knowledge Commentary reflects on verse 4: “The illustration is followed by a penetrating inquiry: Have you not discriminated among yourselves? The question in Greek assumes an affirmative answer. James’ brethren must plead guilty not only to discriminatory divisions but also to assuming the role of judges with evil thoughts of partiality.” The fear in churches is that if pastors know a person’s financial giving, that they will receive preferential treatment. John says that “perfect love drives out fear, because fear has to do with punishment.” (1 John 4:18)

There are ways to preserve anonymity while still helping major donors. You can get a list of the 50 top leaders, without giving data. You can help these folks learn how to give generously and strategically. Churches do a great deal of training, but not with these folks. We may spend 8 hours training someone to work in the nursery or with youth, but what training do we provide for people of means?

Brad Leeper at Generis would suggest that top leadership in a church know the giving patterns, so as to teach and mentor those folks on great giving.

Alan Wildes wrote for XPastor, A Pastor’s Guide to Accelerating Generosity in Churches. Brad Leeper has contributed many articles on generosity, such as Generosity Issues Every Church Should Consider for 2013. Brad also wrote Making Unusual Generosity the New Normal.

Friday, April 27, 2018

Torn Between Senior Pastor and Executive Pastor Roles

Question: Hey Fletch...I recently finished my MBA, started and am currently running my own business, and began taking night courses for a Master of Divinity.

Can I be honest though? I’m really torn between the Lead Pastor and XP role. I’m gifted in teaching and vision, but not in shepherding, which makes me think I would suffer as a Lead Pastor. But then, I’m afraid that as an XP, I wouldn’t use those teaching/vision gifts that I felt compelled to use. Any way to sort this out? Thanks for any help or homework you can send my way.

Answer: Love hearing from you and your progress. That is fantastic. Volunteer to preach as much as you can. Teach in adult groups and kids groups. Develop that gift! If you are gifted there, then fan that flame.

As for not being a “shepherd,” I know many lead pastors who are teachers first, vision casters second. On stage they are warm and “shepherding,” but off stage it is a challenge for them. If you become a Lead Pastor, I recommend that you hire a Care Pastor. Let them be the warm embrace to the congregation. There are many people who want to be Care Pastors. I could recommend 10 great Care Pastors for every one great XP or SP. 


Thursday, April 19, 2018

Is a Donation 'Thank You' Too Pushy?

Question: Hey Fletch… Do you encourage churches to acknowledge first time givers through a thank you letter?  I am considering starting this because I see this as a significant opportunity but do not want to come off pushy.

Answer: A first time donation is a big step. The person is saying, “Hey, I’m beginning to buy into the family and vision here. Let me help and support it.” I would strongly encourage you to send a letter to them. I have done that for years. When we printed a 10 page color end-of-year “ministry stories” publication, we printed enough extra to send to new donors throughout the year. People loved it.

You don’t need to thank the person for the amount of the donation. Some churches treat that information as confidential and only for the business office. People do want to know that the money was received and that it matters. Regardless of the size of the gift, say “thank you for being a part of this family. Every person matters here.” 

Will you come off as pushy? Not with a great note. When were you ever upset that someone said, “thank you!” I have asked Brad Leeper, Principal at Generis to respond:

Brad Leeper—Rather than pushy, think pastoral. This new giver, through this financial gift, has indicated a new, deeper engagement with your church. The step to acknowledge and to say thank you is a powerful pastoral step that reinforces the risk and courage to enter into a new relationship with their church. And consequently, a new relationship with you as their pastor. 

Taking this step and receiving a silent response sends an unintended message that they are not necessarily welcomed or embraced here. Another reason to graciously acknowledge the gift is to prompt and encourage a second gift that comes faster with a note than silence. It seems only 4 of 10 first time givers ever make a subsequent second gift. Those lost second gifts means less financial resources for your mission and a loss of spiritual connection with that person. The lack of a courteous response in a thank you might send the message that we really do not want your next gift and, as odd as this might sound, we really do not want you either. Sending a note establishes a personal relationship with the giver which is pastoral to the core. 

One more reason to send a thank you acknowledgement. Most every nonprofit will acknowledge that gift, and show appreciation. Why would we as church leaders seem less pastoral and caring than a non-church organization? 

Sample Thank You Letter

Dear Joe and Julie,

Thanks for being part of our Church! The finance team let me know of your initial financial investment to our church. Your gift is generous and will return a big impact in the lives of many. Your part in our church really matters. It is an honor to be your pastor and to have you as part of our community! 

Pastor Eutychus 

Wednesday, April 18, 2018

General Fund Robbed by Disaster Donations

Question: Hey Fletch… I have been a fan of your work and website for several years. I have a question and would love your insight. As a board member, let me say that our church has a history of taking special offerings whenever there is a disaster. Our congregation loves to give to emergency causes (wildfires, hurricanes, earthquakes, famine) and tends to give generously. However, our general fund often drops significantly during those weeks. People give to disaster relief and then our core offering diminishes. 

I have heard of some churches who build “disaster relief” into their budgets so that they can respond quickly when needs arise without draining regular income. Any thoughts on best practices around this?

Answer: Thank you for gracious words about XPastor. That is wonderful that your congregation gives so much to special needs. It sounds like your church has a huge heart for the hurting world - to the detriment of your general fund. It is truly a ‘steal from Peter to pay Paul’ issue!

There is no reason why you can’t have a line item in your General Fund—you can internally restrict it for disaster, compassion, mercies, or benevolence. When a disaster hits, you would say to the congregation, “Our General Fund has money for disaster relief. As needed for the relief, gifts above our regular weekly offering will go toward this current need.” You may even want to salt the food by saying, “and we have already given $25,000 this week to get help on the way.” 

The issue that I see is one of communication. If people are accustomed to giving to a special fund, they will feel like the rules have shifted. You are changing away from a donor restricted fund, one which the money can only be used for disaster relief. You are moving to an internally restricted fund, where the board can use the money as they see fit for the current disaster, future local needs, etc.

You should communicate the new style of giving well in advance of the next disaster. Share the reason for the change, in print and in person, with the Governing Board, Finance Team, staff, and key leaders. Once a month for six months, share a carefully worded statement with the congregation about the change. Ensure that any online giving reflects the wording that your church formally adopts, such as “Give at this link for disaster relief. This is a part of our General Fund and will be targeted for the current need. Unused funds will be used for other church ministry.” 

I would also position this as one of great potential vision areas for the church. “We want to do so much and celebrate God’s generosity among us. By having these donations in the General Fund, we have governing board approved methods to strongly continue our ministry and disaster relief.”


Saturday, April 14, 2018

Is Deficit Budgeting an Act of Faith?

Question: Hey Fletch… Our church is barely keeping the payroll and bills paid and we enter the budget process in June. Our elders keep casting a vision that requires 10% or more of deficit budgeting. Historical data says we will not receive from donors the needed amount. They say we should budget by “faith.”  As a member of the finance team, I have a problem with continually asking the members to approve a deficit budget. We also have -0- reserves. Can you share some biblical principles that I can share with the finance team and leaders to show it is not a “lack of faith” to present a balanced budget? If giving doesn’t increase, we are either going to have to cut a position or sell a parsonage.

Answer: I’m a fan of balanced budgets. A budget that has a built-in deficit is a disaster waiting to happen. Jesus says in Luke 14:28-30, “For which of you, wanting to build a tower, doesn’t sit down first and compute the cost to see if he has enough money to complete it? Otherwise, when he has laid a foundation and is not able to finish the tower, all who see it will begin to make fun of him. They will say, ‘This man began to build and was not able to finish!’” (Net Bible®) Your church budget should adequately cover your existing obligations.

You can add to your church budget a special contingency budget. This can be a faith-based approach. You inform the congregation that with current giving, the church budget is balanced. Then lay out the contingency budget, “if we receive $50,000 more in the next six months, then we will do these projects.” It is not a good idea to put salaries in the contingency budget, but do include special projects or renovations. If the extra funds don’t come in, then those projects won’t happen.

As for cash reserves, my friends Dan Busby & Michael Martin at the Evangelical Council for Financial Accountability say on this page: “Cash reserves are the cushion that ensures: Operating expenses are paid on-time instead of incurring late fees, the church is in compliance with mortgage covenants, funds are available to replace worn-out HVAC, the church has the necessary funds ready to launch a new ministry.”  You can download the ECFA e-book, “Essentials of Church Cash Reserves.” Let me ask Dan Busby for his thoughts.

Response from Dan Busby, President of ECFA: 

Thanks for the opportunity to provide input in relation to this request. What you have written in response to the email is RIGHT ON!  Here are a few more thoughts:

    • 10% of more in annual deficit budgeting with zero reserves is TOTALLY incompatible. If a church has excess reserves—say beyond six months of operating reserves, then perhaps a deficit budget might be appropriate to use some of the excess reserves, but without proper reserves (let’s say at least three months of operating reserves), deficit budgeting indicates a lack of adequate responsibility by the governing board.
    • This church is on the verge of failing John Wesley’s test. He said, “Our responsibility is to give the world the right impression of God.” A church that is barely keeping payroll and bills paid is flirting with sending a very bad message to people inside and outside the church, as well as taking Jesus Christ off center stage and placing financial mismanagement on center stage.
    • Restoring sanity to the financial planning for this church will require a conservative estimate of the next year’s revenue. When the governing board chooses what I call the “Big Number” for the next year’s budget, that number should probably be less than last year’s revenues. Otherwise, it is unlikely the church can build reserves. It goes without saying (except for this church) that reserves are only built when cash in exceeds cash out.
    • If you need more scripture references, here are a few: “The wise store up choice food and olive oil, but fools gulp theirs down.” (Proverbs 21:20) “Go to the ant, you sluggard; consider the ways and be wise? It has no commander, no overseer or rules, yet it stores its provisions in summer and gathers its food at harvest.” (Proverbs 6:6-8)

Tuesday, April 10, 2018

Can Our Church Join ECFA?

Question: Hey Fletch … I’ve heard about the Evangelical Council of Finance Accountability. Is that something that a church can join and how could I find out if my church qualifies? Would they accept my church?

Answer: I’ve served in several churches that were a part of the ECFA. They enhance trust in churches with their Seven Standards of Responsible Stewardship™.  Those standards relate to Doctrinal Issues, Governance, Financial Oversight, Use of Resources and Compliance with Laws, Transparency, Compensation Setting and Related-Party Transactions, and Stewardship.

Over the past several years, I have served on one of their advisory groups. This allowed me to see them up close and work with Dan Busby (President) and Michael Martin (Vice President). They are all about honest and forthright standards for church finances and governance. I would strongly encourage your church to apply and be a part of ECFA—it will be a great help to your Board, Finance Team, and congregation. Let me ask Michael Martin to respond as well:

Response from Michael Martin, Vice President of ECFA—David, thanks for the chance to chime in here and for your kind words about ECFA. You’ve been such a blessing to the ministry over the years!

Churches are not only welcome to join ECFA – today, churches are the fastest growing membership segment of ECFA, including over 40 of the largest churches in America.

ECFA.church is our new website just for church leaders with tons of free resources (webinars, podcasts, sample policies and procedures, and more). You can also check out testimonials from current members and learn more about the new short form membership application at ECFA.church/Join

Read more "Hey Fletch" on XPastor.org.

Saturday, April 7, 2018

Percentage of Overall Budget for Worship

Question: Hey Fletch … I doubt you remember me but I was part of a group in 2011. I am currently an XP of Operations. I serve under two Co-Lead Pastors … two young guys who are great! I wanted to ask if you have any metrics/information on the percentage of an overall church budget that goes towards the entire Worship, Arts, Marketing, Media department? We are a church of 1000+ with an annual budget of $1.3 million. So, for example should the percentage be 5%, 10%, 15% or 20%?

Answer: Of course I remember you, beginning with the time that we met for coffee. Even lately, when I was doing some XPastor work, I saw your paper. It has helped thousands!

It can be challenging to answer your question because church budgets vary so much in what they include. My rule of thumb is to include the following budget areas: Communications, Welcome Team, Information Technology, Audio-Visual Technology Capital & Maintenance, and all Worship expenses. As I reviewed budgets from several churches, the number was 10% of General Fund expenses.