Mosaic Mennonites

Missional - Intercultural - Formational

Conrad Martin

Faith and Financial Recklessness

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by Conrad Martin, Director of Finance

I personally believe that if a church project is of God, the money will be there to make it happen.  Throughout history, God has done miraculous things to further the kingdom, so shouldn’t we believe that will happen in our church projects?  Some have labeled this idea as “taking a leap of faith.”

I’m torn, though, when I read stories of churches that began a project without the money to finish that ended with tragic financial outcomes.  Was the project not of God?  Did those churches not have enough faith?

Some churches begin building projects with donor pledges covering the amount not already raised.  In most cases these pledges are a legally binding contract.  What if the donor loses his or her job?  What if the donor passes away?  Does the church really want to get into a legal battle with a church member?  But what if the church really needs that money to survive?

Karl Vaters of ChristianityToday.com states that “for every church that started a ministry they couldn’t afford and saw the money come in after the fact, there may be 100 churches that went bankrupt and/or closed their doors when the needed money didn’t materialize.”  Wow!  That should give any church leader pause before starting a project.

Christians are called to be good stewards of the resources God has given them.  For me, the key words in that statement are “God has given them.”  Is it possible to be a good steward of something God hasn’t given you?  Vaters goes on to state that “spending money you don’t have isn’t faith, it’s bad stewardship.”

Can we take a cue from Luke 14:28-30 (NIV)?  “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?  For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, ‘This person began to build and wasn’t able to finish.’”  Although Jesus was talking about counting the cost of discipleship, this passage also makes sense in counting the cost of starting a new ministry.

Let me re-examine my first statement: if the project is of God, the money will be there to make it happen.  Yes, the order is correct in this sequence: “the money will be there” comes first.  “To make it happen” comes second.

I’m not arguing against congregations taking out a mortgage on their church properties; some would label buying a church building as investing rather than spending.  Counting the cost does mean discerning questions like these (and others) ahead of time:

  • Have the church leaders counted the cost before taking that leap of faith?
  • What is the percentage of the mortgage to the value of the property? Is it a sound financial move?
  • Did you seek wisdom and advice from others outside your congregation?
  • What is the plan should the funds needed for completing the project dry up or funds in-hand not be enough to make the next payment?
  • Have you put too heavy of a financial burden on your own members?
  • As a last resort, can the congregational survive losing its building?

Keys for Good Financial Communication to Congregations

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by Conrad Martin, Director of Finance

For some, trying to understand a financial report may be difficult or confusing.  Let’s face it, not everyone has that gift.  But congregations need to know the financial position of their church in order to make wise decisions.  So what are some ways church treasurers can improve the communication of financial reports to their congregations?

  1. Make it relevant.

Who will be reading the financial report?  Do they understand financial lingo?  Do you perhaps need to train your readers on what is important on a financial report?  Do they prefer financial reports in spreadsheet form or by a narrative?  It will be helpful to ask the reader what financial information they need to do their job.

Any good accounting program should have the capability to produce a variety of reporting formats.  Giving the church council a 10-page, detailed financial report will probably not be of interest to them, so determine what information you can put into a one-page summary report that will give them what they need.  The finance committee, on the other hand, may want more detail.  If you need to provide a financial report for the general congregation, understand that many of them will not understand a finance report in spreadsheet form, so think about how you can convey the finances of the church in a narrative form.

  1. Make it accurate.

Mistakes do happen, even for a good treasurer; yet if a pattern of needing to correct financial reports develops, you could lose the trust of those needing your financial information for making decisions. Your credibility is on the line every time you present a financial report.

Always double check your work, to ensure that the correct amount has been recorded to the correct account.  Look for expense accounts that are significantly off budget (whether high or low), ensure that they are actually correct and be prepared to explain why they are not on budget.  There may be an easy explanation and having that ready helps build confidence in your reports.  Always remember that your church council may be using your financial report to help determine the direction of the ministry.  That’s why accuracy is so important.

  1. Make it timely.

When financial information is received late, it may be useless to the reader, or even as detrimental as incorrect information.  Determining why a report is not timely will go a long way in correcting that.  What is causing the delay?

Are you waiting for financial statements from banks or investment companies at the end of the month?  A conversation with them about changing the reporting dates may give you statements sooner.  Reconcile these statements with your records as soon as you receive them, so that you have time to make any needed corrections before your reports are due.  Are you waiting for church staff to turn in their expense reimbursement claim forms at the end of the month?  You may need to turn to a higher authority for that one.  Try to be up-to-date as much as possible with your recordings before you go on vacation, so you don’t have so much catch-up to do when you return.  Are you overworked, have a conversation with your church leaders about the expectations for time to be spent on the financial reporting.

Keeping good financial records and communicating them well allows your ministries to run smoothly.

These keys were expanded on and drawn from the article “Three Keys for Communicating Financial Information” by Vonna Laue in ChurchFinanceToday. Volume 26. Number 10. October 2018

How to Be a Financially Stable Church

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By Conrad Martin, Director of Finance

 

In Church life, the focus is on ministry and often reviewing finances is not a high priority, putting many churches in financial distress, according to Art Rainer.  Churches worry about how they will pay staff and other bills and still be able to do ministry.  Some don’t even know how they got into such a position.

There are some common themes for these churches, all of which are preventable. Based on the signs of a financially deteriorating congregation, here are some things a church can do to work at financial stability:

  1. Preach and teach stewardship. This may be avoided if the pastor is afraid they would be considered a church leader that abuses their platform for personal financial gain.  Maybe the church leaders are afraid of reducing attendance.  Whatever the reason it to avoid it, congregations need to be preaching and teaching on financial stewardship.
  2. Be mindful of how much debt the church is taking on. Many in financial distress overextended themselves.  Some built too much or too quickly.  Often a huge chunk of the tithes and offerings were sucked away by the debt payment.
  3. Be transparent with finances. When transparency is lacking, skepticism can grow about the finances being used properly, leading to a decline in giving.
  4. Focus your dollars to reach and minister to the community. Churches found to be in financial distress focused the majority of their funds on themselves and internal needs.  Little money went toward outside efforts.
  5. Embrace multiple options for giving. Online giving and other nontraditional methods of giving (in-kind donations, stocks and mutual funds, etc.), allow for a broader participation, especially from younger generations.
  6. Regularly evaluate how funds are spent. To be a good steward of the money the church receives, it is important to evaluate how that money is being used and ensure there is no significant waste, preventing forward movement in the budget.
  7. Take wise steps of financial faith. Church budgets should be based on reasonable mathematical projections, not just on staff/congregational wants.  While God provides for the work of the Kingdom, throughout scripture God also instructed his children to be wise stewards.
  8. Be mindful of relying on a few big givers. When these givers either die or leave the church, the church’s financial viability is then left in jeopardy.

It’s sad to see a church in financial disarray.  It’s also sad to see the staff struggle with cash flow and making budgets.  Perhaps it is worse to see the ministry struggle, especially, when you know it could have been prevented.

Stewardship, Part 2

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By C. Conrad Martin, Director of Finance

In my last article (mosaicmennonites.org/stewardship-october/) I mentioned four possible motivations for stewardship.  The fourth one, Worship, needs a little more processing.

Mark Vincent, in his publication, A Stewardship Manifesto, says that “it is a stewardship rooted in an experience with grace that branches out into a worshipful response.”  What has been our experience with grace that would make our life more generous?  Has it been a merciful intervention from tragedy or despair, or from experiencing the birth of a child?  Has it been by receiving a second chance to do something we should have done the first time we had the opportunity, or from receiving something totally unexpected or even undeserved?

What has been your response to receiving God’s grace?  Do you tell others?  Vincent says that telling our stories of meeting God’s grace is important.  It acts to remind us of our new identity as one who has received God’s grace, but also invites others into an experience of God’s grace.  Telling our story is a form of worship.  It keeps us aware of God’s continuing activity in our lives and gives us another opportunity to thank God.

The story of the Exodus is often told as an example of God’s grace.  Each generation of Hebrew was told this story, passed from parent to child for thousands of years and with each new hearing, there was a calling for the hearer to live a generous life.  Every time we hear a story like that, we are invited into the same kind of relationship with God.

What does your experience of grace teach you?  Does it spur you on to a different practice, perhaps a new practice of generosity?  Vincent says that telling the story again and again, keeps you in touch with God’s grace to you, to the point that opportunities to respond will often jump right out at you, causing you to interact with others in new ways.

Practicing stewardship can take at least two forms, according to Vincent: 1) the practice of giving and distributing through acts of worship and 2) the practice of love through acts of service.  The story of the Widow’s Two Mites in Luke 21 is an example of the first: giving as an act of worship.  The story of the Sheep and the Goats in Matthew 25 is an example of the second: giving as an act of service, even to the point of being so generous with one’s life that the giver doesn’t even know they are doing it.  Oh, to practice stewardship like this.

I also appreciate what Leonard Dow, in his publication Upside Down Living: Money, says about our practices: “Before we can act justly, love mercy, and walk humbly in the ways of God, we have to truly know that Jesus is Lord of our time, talents, and our treasures.”  Perhaps our practices really do reflect who is Lord of our time, talents and treasures.

 

Good Neighbors Through the Rain

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By Karen Kingma, Ambler Mennonite Church Ministry Team Administrator

Ambler Mennonite Church (AMC) sits on a beautiful, large corner lot in the borough of Ambler, Pennsylvania.  Environmental stewardship of that property is important to the congregation, and in September, we took a big step towards improving our green infrastructure with the installation of a large rain garden.

Previously, storm water runoff from our parking lot and yard made its way to the lowest corner of the property, making it soggy, muddy, and generally unattractive. This runoff also contributed to downstream flooding of the Wissahickon Creek that occasionally caused flooding for our neighbors. In an effort to be good neighbors and good stewards, AMC reached out to Ambler’s Environmental Advisory Council (EAC) for assistance and expertise, knowing that they had initiated the installation of dozens of rain gardens on private and public property throughout the borough.

The EAC was excited to collaborate with us.  They brought in Red Tail Land Restoration & Land Management to do the soil remediation and Tannery Run Brew Works to provide volunteer labor and financial support.  We all saw the potential in this soggy corner for a garden that would filter pollutants, have better drainage, reduce downstream flooding of the Wissahickon Creek, and be a source of beauty and enjoyment for the congregation and the neighborhood.  Due to the visibility of our property, the EAC also saw opportunities for using the garden to educate the community about storm water management, rain gardens, native plants, and environmental stewardship.

AMC and community members dug deep (literally) in their own gardens to supply a variety of plants and shrubs.  On a crisp fall morning in late September, dozens of church and community volunteers came together to plant the new rain garden.  Local business donated coffee and pastries to keep the volunteers energized.

Working all together was a tremendous blessing, as connections with neighbors and new friends were made.  The end result is a beautiful space that arose from neighbors who care for each other and the environment.

 

Stewardship

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By C. Conrad Martin, Director of Finance

I was reminded again during my morning devotions, from Deuteronomy 10:14 that everything belongs to God, the heavens, the earth and everything in it.  Exodus 9:29, Psalm 24:1, and 1 Corinthians 10:26 reiterate this theme.

So what.  What does this mean for us?  Matthew 25:14-30, which the NIV subtitles “The Parable of the Bags of Gold,” gives us a brief glimpse of what this could mean.  We are all given some part of God’s creation, each according to our abilities, to steward on His behalf.  We ultimately must realize that whatever we have been given, must be returned to the one who gave it to us.  So what are we doing with it in the meantime?

Luke 12:48b (NIV) also gives us the charge that “…from everyone who has been given much, much will be demanded; and from the one who has been entrusted with much, much more will be asked.”  The “much” in this verse isn’t quantified, so can we assume that what we have been given is as much as our abilities can handle?  And that if we steward what we have been given wisely, our abilities can grow and more will be given to us to steward?

Mark Vincent in his publication, A Stewardship Manifesto, delves deeply into the study of stewardship, defining a steward as someone entrusted to take care of someone else’s assets.  So since everything belongs to God, the ultimate steward is someone who cares for God’s assets, even to the point of treating these assets as if they were one’s very own — although seeing how some people treat the assets they call their own, I might wonder about that.

Vincent goes on to say that stewardship is the act of willingly and responsibly caring for this charge.  He also lists four assumptions for being a steward and carrying out good stewardship:

  • it requires my service
  • it is the highest level of personal fulfillment
  • it is done in community (we are not alone in this)
  • it is done willingly

What is our motivation for stewardship?  Vincent give four possible answers:

  • Obligation, done out of some religious mandate, possibly even out of guilt or fear
  • Philanthropy, done out of love for mankind, to be a better person or a concern for one’s own well-being
  • Prosperity, done out of the belief that by managing God’s resources wisely, one will gain a material blessing
  • Worship, rooted in grace as a response to a generous God; it isn’t something you do, but rather it is something you become. Vincent quotes Lynn Miller in saying that stewardship is “organizing life so God can give you away”

So, what is your motivation for stewardship? Are you being a good steward?

Did You Know: Taxable Income

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by Conrad Martin, Director of Finance

As tax season is upon us, it is important to be aware of two things a church does that may affect the taxable income for congregational employees/pastors — one taxable and one a pre-tax deduction.

  1.  Love Gifts/ Offerings

Some churches give their pastor(s) a “love gift” or “love offering” in special appreciation for the many things they do for their congregation.  These gifts come from either the pastor’s employing church or from individual members of the church.  Sometimes these gifts come from a special offering taken by the congregation for their pastor.  Sometimes an individual member will feel the need to show their appreciation personally in a financial way, sometimes even unbeknownst to the congregation.  In almost every case, the IRS will view “love gifts” as compensation for services rendered and therefore taxable.  If coming from the church as the employer, the church needs to either include the love gift in the calculation of the W-2 or issue a 1099-MISC to the pastor.  If coming from an individual, the pastor needs to include the gift in their taxable income.  If you need further clarification, consult your tax accountant.

  1. Section 125 Flex Plan

If your congregation offers a medical insurance plan to their employees and also charges them a portion of the cost for the premium, those employee premium costs may be deductible from the employees’ taxable income.  If your congregation offers as part of their medical insurance plan a Health Savings Account (HSA), the employees may contribute personally into their HSA through payroll deductions and those payroll deductions may be deductible from the employees’ taxable income.  The key is, the church needs to have a Section 125 Flexible Benefits Plan documented.  Sometimes this is called a Cafeteria Plan.  Whatever it is called, it must be documented.  There are many companies that can write such a plan for your church, one of which is Everence.  Contact your local Everence Stewardship Consultant for more information.

Any time you have questions about your church finances, contact Conrad Martin at the conference office and he will help direct you to the answer.

Did You Know … About the New Labor Law for Overtime?

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UPDATE: November 29, 2016

A federal judge in Texas issued an injunction last week blocking the December 1 implementation of a new salary threshold that would have made millions of more workers, including nonministerial church employees who meet certain criteria, eligible for overtime pay.

The injunction puts the threshold change on hold until its legality can be determined by the judge. Some speculate the new threshold likely won’t survive, but the outcome remains uncertain. The current threshold for the “white-collar exemption” of $455 per week, or $23,660 per year, remains in effect in the meantime.

wall_clockThere is a new law regarding overtime pay which will take effect December 1, 2016.  Are you aware of how it affects your congregation?  Here is the latest information we have on that new ruling.

Non-credentialed employees: All employees (see exceptions below) who work over 40 hours a week are to be paid overtime.  Previously, this did not include executive, administrative or professional persons paid by a salary and those who were making over a certain threshold.  The new ruling now includes all of these categories and significantly raises the threshold to $47,476, including bonuses and commissions.  What this means is that every employee paid less than $47,476, regardless of whether they are hourly or salaried, are eligible for overtime.

Congregations have three options with regard to this law:

  1. Limit non-credentialed employees’ hours to 40 hours per week.
  2. Increase their employees’ pay to the $47,476/year threshold, to be exempt from paying overtime.
  3. Pay employees time and half for hours worked in excess of 40 hours per week. For those who are salaried, the employer needs to calculate what the hourly rate would be.

Special Notes: All employees (salaried or hourly) who are paid less than the threshold should be required by their employer to track their time, to be able to verify the number of hours worked over 40 per week.  Church employees cannot get around this ruling by volunteering some of their time, unless they are volunteering for duties that are not part of their regular job.  Some employers offer their employees time-off in a later pay period as compensation for the hours worked over 40 per week.  This is not allowed by the new law.  Any time worked over 40 hours per week, must be paid in that pay period as overtime.

Ministerial Exemption: If you have credentialed persons employed at your church, this new ruling does not affect them.  Credentialed persons include pastors, ministers, chaplains, LEADership ministers, etc.; anyone who has received their credentialing from Franconia Conference is included in this category.  They are covered under what is called the Ministerial Exemption and are, therefore, not subject to Federal Labor regulations.  This will continue to be the case until the government changes the ministerial exemption clause.  Employees who are not credentialed do not qualify for the ministerial exemption.

BREAKING NEWS: This is a constantly changing issue.  The most recent information indicates that two separate lawsuits have been brought against the US Department of Labor, challenging this ruling.  While it is unlikely that these lawsuits will change the ruling, they may delay its effective date.  We will try to keep you informed as new information becomes available.

If you have questions concerning this ruling or other congregational financial matters, feel free to contact the Franconia Conference Director of Finance, Conrad Martin, at ccmartin@mosaicmennonites.org.