Consolidation of Preachers

As a strategic thinker, I’ve got a prediction about a specific aspect of church life that will happen in the next 15-20 years. First, some context: consolidation of business is a historical reality in the US. We used to have scores of auto manufacturers and today there are a handful of US-owned car makers. The same is true of phone companies, office supply stores, department stores, and so on. For one reason or another, businesses merge till there are only a few. Call it survival of the fittest, or best, or biggest.

I predict some consolidation in churches. Technology allows me to watch via podcasts preachers from around the US. Technology allows my multisite church to have one preacher whose message is viewed in a variety of unique campuses. My prediction is that small and mid-sized churches will select one or more excellent preachers to deliver the weekly message while their on-site pastor focuses on pastoral duties. We are entering an age when there will be fewer but more excellent preachers and they will be on screens in worship venues.

Currently there are several outstanding preachers (Andy Stanley, Perry Noble, Bill Hybels, Rick Warren, etc., etc.) whose messages are regularly above your average sermon. They also have large local churches but also national and international followings and even church presences around the world. These are global preachers who, through technology, can preach almost anywhere in the world.

A well-developed and delivered sermon requires about 15-20 hours of work. That is time that the pastor of a church cannot spend on other requirements of his or her job. What if churches allowed their pastor to preach less and focus more on being a pastor. The pastor would still preach periodically during the year so the church hears the vision and direction of the church.

But most of the year, sermons will be delivered on screen by a selection of outstanding sermon-givers. That allows pastors & churches to focus on worshipping, caring, mission-doing, teaching, and fellowshipping (the main functions of the church). This gives the pastor 15-20 hours a week to meet people, train leaders, and give direction to the church. This helps the pastor have more family time and less weekly pressure “to produce.”

I know there will always be pastors who want to preach and that is fine – there will always be churches who want a “live preacher.” However, technology has the capability of letting churches hear more excellent preachers and help local pastors focus on doing what only they can do – be the local pastor.

 

Lead On!

Steve

 

Top Three

Someone asked me, “What are the top three deficiencies that I see in churches today?” It is a great question and it took me a while to give a well-reasoned answer. Here is what I came up with from my own experience.

  1. Transparency
    • From finances to decisions and even the decision-making process, be as open as possible without breaking confidences. Too many churches circumvent the official processes with backroom deals. This leads to a loss of confidence by members and staff of the church leadership and even the future direction of the church.
    • Share as much info as you can with as many people as possible in appropriate ways. I’m not saying that everyone needs to be involved in voting on everything, but they should be informed about how things happen in their church.
  2. Compliance
    • For a long time churches have been able to not obey tax and other laws to which churches are subject. Some of this is done from ignorance and some from willfulness. Churches must comply with the tax laws, building codes, their own personnel manuals, insurance regulations, and other legal regulations.
    • To not comply means churches are flaunting the law and thus giving a bad witness to their community. They are implicitly saying we are either ignorant of the law or we’re above it. Both are detrimental.
  3. Strategy
    • Too many churches and pastors are simply trying to survive for the next few years. I challenge churches and their leaders to think 5-10 years out. The church is going to change dramatically in the next few years even as society itself changes.
    • For instance:
      • The first iPhone was released in June 2007 and the world has changed in incredible ways due to that invention. How is your church leveraging technology in its future plans?
      • Within the next 10-15 years, the pre-WWII generations will diminish and the Boomers will retire forcing churches to rely on Generations X, Y, & Z. What is your church doing to develop these next gen leaders for their inevitable role?

 

Lead On!

Steve

 

Personal Coaching-How (part 2 of 2)

Church work is harder than it has been in previous years and decades. I don’t want to get the reasons in this post but I do want to offer some advice to everyone in a leadership position at a church (on staff or a lay person). Everyone in church work needs a coach. Everyone means all ministers and church program directors. Learn from other people, carry out what they say if it looks possible in your situation, be willing to fail, and adapt quickly to “the new” (which seems a daily occurrence).

  1. Get a coach or a support group. Find someone who has gone down the same path that you are on and who is willing to walk with you. That person will ensure that you avoid the pitfalls (and tell you about the experiences she or he had in that pitfall), see the rewards, and push you farther down the road.
  2. Meet monthly (at least). Monthly meetings give you time between meetings to implement what you discussed. Make these meetings a priority on your calendar and help your church understand how these meetings help you and the church.
  3. Talk strategically, not trivially. Strategic items help you and the church do things more efficiently, more effectively, and more excellently. Be strategic in your conversations and actions. Think long-term about what you plan and need to. Be intentional about how you’re going to carry out these actions.

The flip side of this is that you must also be a coach to someone. You have valuable experience and knowledge which you need to use to help someone else. If you do not use your own expertise, then you are robbing someone else of your help. In short, make learning a life-long opportunity and routine AND also be a life-long teacher yourself.

 

Lead On!

Steve

Personal Coaching-Why (part 1 of 2)

As I talk with seasoned pastors and leaders, almost all of them tell me it is increasingly harder to be a pastor due to the variety of demands. They need to know more, do more, and be more in the church while being an excellent spouse, parent, and civic leader. Pastors need someone to help them and a coach or mentor can help. A coach need not be a paid counselor; a coach can be something as simple as a good friend – but the critical issue is complete honesty.

  1. Set priorities. All too often a pastor will place professional ahead of personal time and the family suffers. A coach can help the pastor determine which meetings he or she needs to attend and which family issues need attention.
  2. Be a release valve. Pastors are really good at hiding. They have to be so that they don’t betray confidences. But at some point they must open up to someone or else they might explore emotionally. A coach can provide a gentle and confidential opportunity for a pastor to share things he or she can’t share with anyone else and then gain some perspective from another person’s view.
  3. Be accountable. Who looks the pastor in her or his eye and asks for the truth? Other than a spouse, not many (if anyone). A coach can keep a pastor emotionally honest by asking and even demanding truth-filled answers, not shallow replies that pastors can sometimes get away with.
  4. Establish goals. Someone needs to help a pastor determine his or her professional and personal goals. Staff and even a church personnel committee rarely understand the complexities of a pastor’s role. A mentor can challenge a pastor’s self-establish low-hanging goals and establish higher goals. The coach must then follow up throughout the year on these goals.
  5. Be an understanding ear. Sometimes a coach just needs to listen. Sometimes a pastor just needs to talk about what is going on in his personal and professional life. Sometimes a coach doesn’t need to coach but just hear. Sometimes pastors need someone who has been there and is isn’t critical of what is happening. Sometimes a coach just needs to be a pastor.

A coach provides detached distance, non-emotional advice which is needed so much today for pastors and frankly for everyone in leader roles. If you don’t have a coach, get one and listen.

 

Lead On!

Steve

Monthly Financial Statements

My “Intro to Accounting” professor taught me some basic concepts which have guided me ever since. They are simple principles but vital to any and every organization.

  1. Always release a complete balance sheet and revenue & expense statement
    • These are the two basic financial statements. At a minimum these should always be released. There are a multitude of other financial reports but these are the minimums. These statements measure different things:
      • A balance sheet is a financial picture of the organization at a specific date. It shows all cash, debts, and restricted funds of a church.
      • A revenue & expense statement is shows how the organization is doing this fiscal year. It should have columns for the total annual budget; the monthly actual & budget figures; and the year-to-date actual & budget figures. Collectively these numbers indicate your current year’s financial status
  1. Never hide or not-release financial figures, even if they will elicit lots of questions
    • Never, ever, NEVER hide anything, period (.).
    • All numbers will come out. You need to be in control of bad AND good news. Hiding numbers only makes you look like you’re hiding things. That will always hurt you.
    • The numbers may look bad but the numbers are not about you but about the organization. Sharing everything allows you to keep your integrity. If the finance office has lost its integrity, it needs new staff.
  2. Release the data by the 15th of the subsequent month. To delay longer than that is to release “stale-data.”
    • There is no reason to delay releasing monthly financial data. Bank statements are available online so the bank reconciliation can even be done on the 1st of each month. There are going to be journal entries and maybe some backdated checks, but frankly, the financial office should be so update that closing each month is fast and routine.
    • Releasing financial data 30 days or later communicates that the finance office does not know what it is doing and/or that things in the financial area are unnecessarily complicated and needs help.

The bottom line, release financial data accurately and in a timely manner.

Lead On!

Steve

 

Cost Accounting – Pros & Cons

Cost accounting is the practice of determining how to divide an expense between various budget line accounts. There are some expenses which are easy to cost account because it can be tracked without much effort:

  • Postage
  • Photocopies
  • Special Office Supplies

There are some that are not easy because the calculations are quite difficult and often require a judgment call:

  • Electricity
  • Building Maintenance

The main question is, What Added Value is there to Cost Accounting?

In most instances in church accounting, there is almost no value added to do cost accounting. When asked to do cost accounting, my question is “Why? What are you going to do with the info?” For small to mid-sized churches, cost accounting is rarely recommended. If a ministry has a large mailing or printing a lot for an event, that can be guesstimated and charged to that account if necessary. For larger churches, I recommend having an office expense account for most items (supplies, printing, etc.) and then keep track of special event expenses so the finance office can charge them appropriately.

Doing a lot of cost accounting only occasionally helps a church with its financial decision-making but usually it is not worth the day-in and day-out effort. In my opinion, it detracts from the routine ministry of the church. The ONLY exception is for special events and activities which you do need to track the expenses to know if this was financially worth it, if it should be done again, and if it should be done differently next time.

Before you enact across the board cost accounting in your church, please ask yourself if there is significant value added to doing it for everything, every day.

 

Lead On!

Steve

 

Designated Funds and UPMIFA (part 2 of 2)

Every church I’ve worked with has designated funds which are dormant. The long-standing rule of thumb was that to re-purpose the money in these funds was that each donor needed to be contacted to request permission to alter the use of their gifts. That is a good rule to use but in many cases, this is not practical or even possible. Fortunately, there is a legal alternative. It is called UPMIFA: Uniform Prudent Management of Institutional Funds Act.

UPMIFA has been passed by almost every state legislature (there are a couple of holdouts) and it is virtually the same in each state. Look at your state’s legal code for the specific language – I’ll use the one from Virginia (where I live) for this post. In all instances the church must consult with a court or the attorney general. If the request is reasonable, they courts will agree to the church’s desires.

Below is the actual law from the Code of Virginia. Here are the salient points:

  1. Donors can change the purpose of their gift but it still must be used for a charitable purpose
  2. Judges and Attorneys General can change the purpose of a fund but it still must be used for a charitable purpose
  3. An institution can change the purpose of a fund by working with the Attorney General if the fund is less than $250,000
  4. An institution can change the purpose of a fund by notifying the Attorney General if the fund is less than $50,000, is over 20 years old, and it will be used for a similar purpose
  • 55-268.16. Release or modification of restrictions on management, investment, or purpose.
  1. If the donor consents in a record, an institution may release or modify, in whole or in part, a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund. A release or modification may not allow a fund to be used for a purpose other than a charitable purpose of the institution.
  2. The court, upon application of an institution, may modify a restriction contained in a gift instrument regarding the management or investment of an institutional fund if the restriction has become impracticable or wasteful, if it impairs the management or investment of the fund, or if, because of circumstances not anticipated by the donor, a modification of a restriction will further the purposes of the fund. The institution shall notify the Attorney General of the application, and the Attorney General shall be given an opportunity to be heard. To the extent practicable, any modification shall be made in accordance with the donor’s probable intention.
  3. If a particular charitable purpose or restriction contained in a gift instrument on the use of an institutional fund becomes unlawful, impracticable, impossible to achieve, or wasteful, the court, upon application of an institution, may modify the purpose of the fund or the restriction on the use of the fund in a manner consistent with the charitable purposes expressed in the gift instrument. The institution shall notify the Attorney General of the application, and the Attorney General shall be given an opportunity to be heard.
  4. If an institution determines that a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund is unlawful, impracticable, impossible to achieve, or wasteful, the institution, without application to the court but with the consent of the Attorney General, may modify the purpose of the fund or the restriction on the use of the fund in a manner consistent with the charitable purposes expressed in the gift instrument if the fund subject to the restriction has a total value of less than $250,000.
  5. If an institution determines that a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund is unlawful, impracticable, impossible to achieve, or wasteful, the institution, 60 days after notification to the Attorney General, may release or modify the restriction, in whole or part, if:
    1. The institutional fund subject to the restriction has a total value of less than $50,000;
    2. More than 20 years have elapsed since the fund was established; and
    3. The institution uses the property in a manner consistent with the charitable purposes expressed in the gift instrument.

 

Lead On!

Steve

 

Designated Funds and UPMIFA (part 1 of 2)

Churches are the beneficiaries of designated gifts – people who give to specific causes that touch their heart. This can be scholarships for students to go on mission trips or to college, to pay for children’s supplies and events, and scores of other ministries. Used wisely, designated funds can enhance a church’s mission by adding extra dollars to a church’s budget.

Every designated fund must have a specific purpose (why it was established and what it is to be used for) and a sunset clause (a determination of when the fund will cease to exist). However, many churches have funds that don’t have either a purpose or a timeline.

I challenge each church to go through all of it designated funds and write down its purpose and when it will cease to exist. The good news is that most church accounting software has a section in the chart of accounts where a memo can be written about each fund. Use that memo tab to write in this info so that this knowledge can be passed from one person to another and not lost.

Then, use you designated funds to supplement your budget needs. Use them as much as you can and encourage people to give to them – over and above what they give to the church’s operating budget.

However, even doing all that, churches are going to have funds whose purpose ceased to exist long ago. There is legal help for that and I’ll describe it in the next post.

 

Lead On!

Steve