Church Finances during COVID-19 (part 4 of 5) – maintain (or increase) income

During this time when church buildings are closed, the church can address its finances in a productive way. During the 2008-2010 Great Recession, I advised churches to reduce their budgets by 10%; the churches that did that survived without letting go any staff or even cutting their wages. The level of our impending economic crisis is dramatically different than the Great Recession so the ideas of the past may not serve us in the present but they can help. Here are some ideas for the present reality (these ideas are good for any time of the year, not just during a crisis).

 

Maintain (or Increase) Income

  1. Online giving
    1. If you have an online giving program, mention it in every communication sent out from the church and in your Sunday worship services.
    2. If you have online worship, ensure there is a link to your online giving or a QR code visible on screen at all times
    3. Make sure that “Give” or “Donate” is a bold/red clickable link on your church’s main web page.
    4. If you don’t have an online giving program, contact the folks at Tithe.ly to get one set up. It takes an hour or so. I don’t get any referral money from them but I’ve used almost a dozen online giving platforms and Tithely is among the best.
  2. Donor Gift Statements
    1. Every quarter and right after Thanksgiving, send an email statement of contributions to each of your donors. This won’t cost anything except time and it goes only to your donors unless you expand the spectrum of who gets the notice. Attach a cover letter that includes stories of the ministries the church has done recently with children, youth, adults, missions, etc.
    2. During this time of Covid-19, it is critical that you send out a letter (like NOW) and donor gift statement. Donors need to be reminded to give, to be thanked for their gifts, and to know what their gifts are doing. Please tell people that while your building was closed your members and staff were busy doing ministry – the church continues to live.
  3. Special mailing
    1. Depending on how your finances are doing, you should consider a special letter sent from the Finance Committee in May and/or June 2020. (In July you’ll send another donor gift statement). This letter should spell out the financial situation of the church, thank people for their gifts, and encourage more giving if the shortfall is significant.
  4. Contact your members
    1. Use this time to have members of the staff and key committees (Elders, Trustees, Finance, Personnel, Deacons, etc.) talk via phone (not email) with every member and attendee of the church. They need to feel connected and leadership should step up.
  5. Planned Giving and Endowment
    1. Talking about including the church in members’ wills is always right. It isn’t morbid to mention this topic – people are already thinking about death but they’re not thinking about their will and they need to. Prompt them to use this time to consider what will happen to their estate when they die. People give money to three things (actually four): their family, their friends, and the organizations they love (and taxes if they don’t plan well; Howard Hughes and Aretha died without wills and paid Uncle Sam millions).
    2. If you need help getting an Endowment started at your church or want more info, please go to churchbestpractices.org and download the free “Endowment Manual.”

Lead On!

Steve

Listen to the podcast:
https://anchor.fm/cbf-va/episodes/Church-Finances-during-the-Pandemic-Navigating-the-Financial-Fallout–the-CARES-Act–and-Making-Tough-Decisions-ecfgm7

Church Finances during COVID-19 (part 3 of 5) – reducing expenses

During this time when church buildings are closed, the church can address its finances in a productive way. During the 2008-2010 Great Recession, I advised churches to reduce their budgets by 10%; the churches that did that survived without letting go any staff or even cutting their wages. The level of our impending economic crisis is dramatically different than the Great Recession so the ideas of the past may not serve us in the present but they can help. Here are some ideas for the present reality (these ideas are good for any time of the year, not just during a crisis).

 

Reduce Expenses

  1. Personnel – this is 50% to 60% of a church’s budget so let’s start here
    1. Hiring freeze – do not hire anyone new to your staff. Stay focused on who you currently have and try to retain them. Some may leave and that’s okay but don’t replace them right away. Try to get by with a smaller staff. When your finances stabilize decide then if you can afford to hire new staff.
    2. Cutting staff – if you do need to cut staff, then first let go the staff that under-perform. It is always painful to terminate people (I’ve terminated over 50 in my career so I speak from experience) but this might be a time for you to terminate staff that have not performed well or are part of a ministry that isn’t in your core. That is harsh – I recognize that – but we’re talking about the continuance of your church and ministry. You can provide the terminated staff with benevolence money for groceries and rent/mortgage for a few months. Terminating staff will let the rest of the staff and the membership know how serious the situation is – it’s a reality check.
  2. Building – this is the second largest expense area of a church’s budget, usually 15%-25% (depending on whether you have debt)
    1. Talk with your bank about refinancing. Banks are borrowing money from the Federal Reserve at 0% so they can afford to lower the rate they charge their customers. Have this conversation – the worst your banker can say is “no.”
    2. Change your thermostat settings: 60 or 65 when it calls for heating; 80 when it calls for air conditioning.
    3. Turn off lights and keep them off
    4. Reduce the number of trash pickups
    5. Look at every one of your contracts and put them out to bid in the next few weeks and months. This is low-hanging fruit through which you can save a LOT of money if you negotiate.
    6. You may not need to bid out every contract. If you’re particularly satisfied with a vendor, ask them to reduce their fee. In 2010 I asked and my lawn management company cut their fees by 30% so I kept them and they’re still there 10 years later.
  3. Programming – this is the third area of church spending and it is the smallest, usually 15%-20% of which 5%-10% is missions. There’s not much you can do here but you can be creative.
    1. It appears now (April 2020) that mission trips for this summer will be cancelled. Use the money allocated for that to do creative missions:
      1. Send the money directly to your missions partners in the country or region where you were going and let them use the money however they want or need to.
      2. Use the money to do missions in your own city.
        1. Provide meals and snacks to your local hospital’s staff.
        2. Send gift cards to your banker who is working hard for you.
        3. Give gift cards to people whose income has been deeply affected by the economic shutdown: restaurant workers, hotel staff, retail employees, small businesses, etc. These are your friends and neighbors – take care of them. They’ll remember what you did.
        4. Create videos and have them sent to your nearby retirement communities. They are in lock down and they desperately need to know that you’ve not forgotten about them. Ask the retirement community to show the videos on their in-house TV network.
      3. Natural attrition
        1. You’ll have a natural reduction in some expenses such as flowers, candles, Sunday School materials, etc. Some of your printed materials may switch to online PDFs and they are cheaper.

 

Bottom line: take this opportunity to seriously look at your expenses and see what you can cut that won’t affect your ministry or that will protect your core ministry.

 

Lead On!

Steve

Listen to the podcast:
https://anchor.fm/cbf-va/episodes/Church-Finances-during-the-Pandemic-Navigating-the-Financial-Fallout–the-CARES-Act–and-Making-Tough-Decisions-ecfgm7

Church Finances during COVID-19 (part 2 of 5) – Paycheck Protection Program

friends hugging

As part of the $2.2 trillion CARES Act, Congress approved the Paycheck Protection Program. This program is aimed at small businesses including churches and religiously affiliated non-profits. It is a rare time when Congress authorizes money to be given to churches.

 

I’ve done the application for a few churches and organizations. The amount of money is you can get is dependent on your payroll but in the churches I’ve worked with it amounts to about 5-6 weeks of income. Word is that the program is so popular that it ran out of money in its first few days but Congress is already working to supply additional money.

 

  1. It was launched on Friday, April 3, 2020 and the deadline is June 30, 2020.
  2. Work with your bank, you’ll need to calculate your spending on payroll for the past year, complete some forms, and get some signatures. Your banker is the key to the program.
  3. The PPP provides for a 100% forgivable loan by the US government for 2.5 months of your payroll expenses (based on some calculations). If you have the same or more employees after June through December 2020, then the loan is entirely forgiven.
  4. If you don’t need or want the money – get it anyway. You can always
    1. Return the money later
    2. Give it to a non-profit that you partner with
    3. Use it for missions in your community
  5. The CARES Act also has some changes in charitable giving laws which might be of benefit to some people in your church. Please consult your tax professional to see if these laws would be beneficial in letting you give more money to your church. And even if the laws aren’t in your favor, give anyway – you’ll rarely regret giving money to your church.

 

Lead On!

Steve

Listen to the podcast:
https://anchor.fm/cbf-va/episodes/Church-Finances-during-the-Pandemic-Navigating-the-Financial-Fallout–the-CARES-Act–and-Making-Tough-Decisions-ecfgm7

 

Church Finances during COVID-19 (part 1 of 5)

Issues to address immediately:

  1. Online giving – if you don’t have it, get it now. My currently preferred vendor is Tithely. They can get you set up in a few hours (they say they can do it in minutes but…). Then, promote the heck out of your online giving.
  2. Audio & video technology – This crisis has forced many churches to acknowledge their AV equipment wasn’t ready. PLEASE invest more money into this area. You won’t regret it. After this is over you’ll have really good microphones. With your video equipment, you can improve or launch an online service so that members can watch you whether they’re homebound, traveling, sick, in a retirement community, or just want to watch the service again during the week.
  3. Paycheck Protection Program – the $2.2 trillion CARES Act (and its related additional acts) provide churches federal money. This is the first time the US government has offered money to faith groups. Fill out the forms, work with your local banker, and get the money. If you don’t need or want the money – get it anyway. You can always
    1. Return the money later
    2. Give it to a non-profit that you partner with
    3. Use it for missions in your community

 

I think every church in the world has realized the need for those two things. These are no longer “wants” but actual needs. Yes, it will cost some money but it may be the difference in survival and closing your doors.

Lead On!

Steve

Listen to the podcast:
https://anchor.fm/cbf-va/episodes/Church-Finances-during-the-Pandemic-Navigating-the-Financial-Fallout–the-CARES-Act–and-Making-Tough-Decisions-ecfgm7

Columbarium – Part 6: Moving?

One of the serious considerations that each church faced was moving the columbarium should the church ever relocate and the property be sold. As cities and suburbs change, churches wax and wane; some are closed for good and some move to a new location. In either case, what would the church do if moving the columbarium was necessary?

Relocating the Church

  1. The columbarium committee secured a commitment from the church leadership at the time that if the church ever moved, then the columbarium would go to the new location. That leadership will certainly be gone when/if the church ever moves but at the time that was comforting to the people who were buying niches.
  2. The niches were in a brass box – a series of about nine rows and seven columns which created 64 niches (singles and doubles). This brass box is exceedingly heavy and sturdy.
  3. The decision was made that should the church relocate, then a mason would chip away at the bricks surrounding the brass box of niches, each box would be lifted out and moved. At the new location, a new columbarium would be constructed and house the brass boxes.
  4. As to the areas where ashes were scattered or interred in the ground, the committee said that as much dirt as possible would be transported to the new location and placed in a new area set aside for ashes. It was recognized that not all dirt could be moved but that every effort would be made to move as much as possible in a dignified way.

Closing the Church

  1. Should the church close, the decision was that the church would approach a cemetery and make arrangements to move its niches and dirt. The sale of the church and the perpetual fund would cover the moving costs and the permanent fund at the cemetery.
  2. Then, the move would follow steps 3 and 4 above.

The committee was thorough. We wanted to ensure we created a sacred space for the eternal rest of people created in God’s image and then ensured that they would be taken care of forever. The committee achieved that and then disbanded. We gather now only when we meet at the funerals of friends but we also are glad that we made a place for them to be and their families to visit.

Lead On!

Steve
www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

Columbarium – Part 5: Extra Info

I kept 2-3 urns in my office for quick access and so I didn’t have to get one right away when someone died. Don’t let families go buy their own urns – they may not fit. I also had 3-5 niche face plates in my office. When someone died, I took the niche plate to the engraver who had a pretty quick turnaround. When the funeral day came, I removed the blank niche plate and after the service put up the engraved one. If a spouse of someone already in the niche died, then I took the engraved niche plate off, put up a blank plate, got the niche plate engraved with the second name, and returned it in time for the service.

For tracking purposes, I created a spreadsheet in which I color-coded which niches were available, which were sold but not yet occupied, and which niches had urns in them. I did the same for a place where ashes were interred in the ground (by the way, it takes three years for ashes to totally be absorbed so on my spreadsheet I marked those plots as being occupied for a three-year term).

I installed a glass-enclosed bulletin board on which I posted the spreadsheets for the niches and for the interment area. This allows passersby to see what spaces were available and which had been claimed (either occupied or paid for but not yet occupied). There was some marketing material there, too. This bulletin board was right next to the door leading to the columbarium garden.

Lead On!

Steve


www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

Columbarium – Part 4: Where to Put It

I’ve led in the construction of two columbaria, one at a Baptist church and another at a Presbyterian church. There was no denominational difference. Our respective goal was to honor the saints and provide a place of sanctuary for people visiting those saints.

In each case we found a secluded area of the church’s grounds. One was an existing patio immediately outside the sanctuary and the other took a grassy semi-circle at the end of a building. The patio was far cheaper because the walls and concrete flooring were already there; the masons just had to build up a structure into which the brass niches were installed. The other was a much larger construction project requiring about six months of work. It was designed by a landscape architect; it required a lot of bricks, major landscaping improvements, plumbing for a waterfall and electricity for some uplighting. It also contained seven sets of niches whereas the first one I did only had one set of niches.

Both columbaria provided a quiet place even though they are both near a major street. One of them has a waterfall which covers the noise of the nearby road and both have lots of greenery to enhance the atmosphere and provide privacy. Both have benches for people to sit while they visit and they are open to the public at all hours-the gates are never locked. The seclusion of each one ensures that for the most part only church-goers even know the columbarium is there.

In both cases the columbarium has enhanced the landscaping of the church. Each has been a wonderful addition.

Lead On!

Steve


www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

Columbarium – Part 3: How to Pay for a Columbarium

Here are two ways to build and fund a columbarium that I used.

  • The columbarium was built in phases due to the construction costs. Phase I cost $60,000. The pastor asked three families to each give $20,000 in exchange for a tax-deductible contribution and a double niche. All three families gave the money and we built it a few months later. As people purchased niches, that money would pay for the next phase until all phases were constructed. Sales from the sales phase would then become the source of the perpetual maintenance fund.
  • The columbarium was built all at once for a cost of $225,000. Solicited donations and sales of niches generated about $75,000 initially. The church was fortunate to have over $150,000 of reserves. In lieu of borrowing money from a bank, the church loaned itself the money and then as niches were purchased, the loan declined. At some point, the loan was paid off and then all subsequent money was used for the perpetual maintenance fund.

In all cases, handling the money for a columbarium requires careful record-keeping to ensure you know which niches or plots have been sold to whom. You need to keep copies of the agreement you have with each family, know where their money has been placed, and then have easy access to it when the time comes to inurn or inter a loved one for any expenses (engraving, buying urns, etc.).

Lead On!

Steve

www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of