Questions re Accepting Credit Cards (part 5 of 5)

Churches which do not have online giving often have several questions which hinder them from proceeding. Here are some of the concerns I’ve run into over the past few years:

  • Commercialism
    • Some fear that by accepting credit cards, the church is becoming too commercial. It isn’t. It is using the mechanisms created by this world in order to do the work of the Kingdom. Jesus encouraged his followers to be as shrewd as the people of the world (Luke 16:8) and this is one way of doing just that.

 Online giving doesn’t solve all of a church’s financial woes. It does eliminate (or minimize) hurdles and excuses for people to give to their church. They can no longer claim they forgot their checkbook or don’t have cash in their wallet. I know they have their credit card in their wallet because they’re going to eat at a restaurant after church and that restaurant accepts credit cards. They can use that credit or debit card to be generous with their church – hopefully even more generous than what they’ll spend on lunch.

Make it easy for people to give to your church – give them the option of online giving.

Lead On!

Steve

Questions re Accepting Credit Cards (part 4 of 5)

Churches which do not have online giving often have several questions which hinder them from proceeding. Here are some of the concerns I’ve run into over the past few years:

  • Promotion
    • To be successful, there must be a promotion/awareness/visibility campaign to let members know they can now giving online. The best way to do this is as a teaching opportunity rather than crass marketing. Just as we let members know about different Bible study times and other events, we need to inform people about the different ways they can support their church. They want to give their money to their church – we’re simply providing information and ways for them to do that.
    • There are a variety of methods to get the word out using bulletins, pulpit announcements, website, giving cards in the pews, etc. All of these must be used to make this a success.
    • If we do not give easy ways to support their church, we’re putting hurdles in front of our donors. That is simply not wise or good.
  • Accounting and Reporting
    • The finance office will need to be diligent in ensuring that all online financial transactions are posted to the General Ledger so that the monthly bank reconciliation is accurate and the end of month financial reports are correct. That office also needs to ensure that any reporting provided to the church during the month contains the online gifts. This will require the staff to adopt new patterns and checklists.

 

Lead On!

Steve

 

Questions re Accepting Credit Cards (part 3 of 5)

Churches which do not have online giving often have several questions which hinder them from proceeding. Here are some of the concerns I’ve run into over the past few years:

  • We’ll Get That Money Anyway
    • Some people feel that money given by members via credit cards would have come to the church via cash or check if the church didn’t have online giving. Personally, I’ve put things back on the shelf when I realized the shop didn’t take a credit card and I didn’t have cash to pay for it.
    • I don’t believe all of that money would. Some would come in but not all. The convenience of credit cards eliminates hurdles to giving and allows for giving more.
  • Back office administration
    • The finance staff in the church has to get the donations posted to members giving records and to the church’s financial records. The worst way to do that is manually and the best way is to do it electronically with few or no human touches.
    • Digital donation providers are continually working to ensure their systems can seamlessly “talk” with church financial records systems. Also, the online giving platforms have a way for members to access their giving history and even download a document suitable for their tax purposes (which means less contact with the church’s finance office).

 Lead On!

Steve

 

Questions re Accepting Credit Cards (part 2 of 5)

Churches which do not have online giving often have several questions which hinder them from proceeding. Here are some of the concerns I’ve run into over the past few years:

  • Portal Fees
    • Digital donation providers themselves have a fee which usually depends on the size of the church (number of Sunday morning worshippers).
    • This is the fee paid to the provider their services
      • A portal that makes is easy and friendly to give
      • Back office assistance to post contributions
      • Help in creating categories for gifts
      • Continuing training to existing and new staff at the church
      • Ideas for successful marketing and implementation
    • This fee is to the digital donations provider just as we’d pay the plumber for their labor (that is, the portal fee) and we also pay for parts (that is, the credit card fees) – two different expenses paid to two different companies.
  • Debt by members
    • Some churches are concerned that members will get deeper in debt by using their credit cards to pay their tithe. There are two ways to address this within the church:
      • Encourage people to use a debit card or an ACH transfer (bank to bank). These are cheaper for the church and don’t create credit card debt.
      • Have a class teaching members wise money management using materials from Financial Peace University and/or from Crown Ministries. These classes can really help people get their financial house in order AND tithe.
    • But some people want to use their credit card to earn rewards points and they will pay off their credit card balance each month.

 Lead On!

Steve

 

Questions re Accepting Credit Cards (part 1 of 5)

Churches which do not have online giving often have several questions which hinder them from proceeding. Here are some of the concerns I’ve run into over the past few years:

  • Online Giving (itself)
    • Making financial transactions online has been normalized by society in the past 10 or 15 years. Amazon and other online businesses have made us comfortable with spending money online and using our credit cards on our computers and smartphones.
    • In 2016, our society spent more on restaurants than groceries; in 2015, we spent more electronically than we did using cash and checks. We have moved inexorably into the age of electronic transactions.
    • I predict that by the year 2025 (maybe 2030) we won’t even be using credit cards anymore – transactions will be made using Apple or Android pay or some other electronic financial exchange system which is being created even now.
  • Fees paid by the church
    • All credit cards have fees ranging from about 2.3% to 5% of the transaction. VISA and Mastercard have lower fees while American Express has the highest. Most VISA and Mastercard providers have fees in the 2% to 3% range.
    • Remember that banks have fees on every check and cash transaction they process, albeit about 25 to 30 cents for each one and that is lower than credit card fees.
    • Fees on credit cards is very much a “cost of doing business” in today’s world. Just as every church has a copy machine and air conditioning, fees on credit cards are just part of being “in business” for a church.
    • Frankly, the fees aren’t that much. If a church gets as little as $10,000 in online gifts during the year, the fee for that is about $250 which seems pretty small when weighed against the $10K that came in.

Lead On!

Steve

 

Good churches need good manuals – Finance Manual

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A finance manual is critical. Church finances require the utmost level of trust from the donors and members toward the pastors and finance staff. A finance manual establishes the policies by which the church’s money will be governed and used. Parts of this document are a legal requirement but most of it is designed to ensure confidence in the handling of funds.

 

If a church does not have a finance manual, it can create the appearance of lack of integrity and a haphazard attitude towards donated money. That is not the biblical standard. Paul tells the Corinthians to do all things in their church “decently and in order.”

 

A good finance manual will address accounting, banking, record-keeping, software and hardware, document retention, communication with donors, accounts payable, financial reporting, audits, gift acknowledgement, and too many other things to list here. These policies ensure that even though staff may come and go, the practices within the Finance Office remain constant and completely above-board.

 

A personnel manual is a living document – it must be reviewed every year and updated at least every other year. Not doing that minimal step is a failure by management. Most policies will remain the same such as contribution processing, payroll, or accounts payable. But as times change, new policies must be written and old policies changed to address changes in the law or accounting standards regarding overtime, designated funds, and PP&E (property, plant, & equipment).

 

The finance manual template at www.churchbestpractices.org has

  • A Gift Acceptance Policy to help the church know what gifts can be accepted without question versus those which require research
  • A policy for using church-issued credit cards and reporting the expenses charged on the card
  • Fundraising ethics standards to ensure the church abides by IRS rules

 

This manual is only $30. It is updated annually to ensure its compliance with the latest legal and tax changes.  This manual is a great starting point for churches needing to develop a manual scratch or to update their current one. It will save hours of research and writing. By using this manual, a church will need only to add sections that are specific to their situation and/or remove non-legal policies which don’t apply to them.

Employees Should Pay for Benefits with Non-Taxable Dollars

2016 06-June 14 (11)

The rule of thumb is that you always want to pay for benefits with non-taxable dollars. If you pay for them with taxable dollars, then when you get the benefit, you have to pay taxes on that benefit. Taxes on premiums are always cheaper than taxes on benefits. The best example is life insurance: the premium on a life insurance policy is a few dollars a year (depending on what the premium is and your tax bracket) but that is certainly cheaper than paying taxes on a life insurance benefit of $50,000 or $250,000! Other examples include disability policies and benefits and long-term care.

Health insurance and its related health savings accounts are not, by law, taxable (as of when this post is written). In fact, employee payments for both health insurance and HSAs are tax-deductible and employees should be encouraged to max out their HSA amounts if financially possible (same goes for retirement).

 

Lead On!

Steve

Overtime Laws

2016 03-March 29 (8)

On December 1, 2016 new overtime (OT) rules as approved by the US Department of Labor go into effect. Actually, most of the overtime laws are over 30 years old. In May 2016 the DoL altered one major component of the OT laws but almost everything else remained the same.

 

The major change is that salaried employees must make over $47,476 (just round that to $47,500) to be exempt from OT. Salaried workers who are below this dollar threshold and who do not make executive-level decisions should keep track of their work hours. While tracking hours worked each pay period is a pain, it is necessary in order to know if the employee should receive OT compensation.

 

Some other information about DoL laws:

  • Hourly workers are never exempt from OT
  • Contractors must truly be from an independent company that has several clients and not just an outsourced former employee or two

 

Lead On!

Steve