Church Finance Church Thoughts Growing Your Giving Base

Reasons to Thank First Time Givers

Let’s just face it; talking about giving is often the elephant in the room for churches. Yet, we all know what the Bible says about giving. It needs to be encouraged as an act of worship and given that importance and priority in our church.

But really, what are some practical ways we can encourage giving? One way to instill confidence in your givers is to send a thank you note to first time givers.

Everybody likes to be acknowledged

Sometimes it’s just nice to say thank you. I’ve never heard anyone that was upset because someone thanked them, even if it was for something they were supposed to be doing anyway.

It shows you are truly thankful and will be a good steward

One key difference between ministry and business is that you have little to no control over your income. A ministry in most cases is completely dependent on the financial gifts of donors and supporters.

For that matter, it is vital to let those who are donating know that you are truly thankful for their gift and you understand your dependency on their faithfulness and generosity.

It builds trust in your system

It shows givers that a system is in place to track every dollar that is given. Most people will assume something is in place, but go the extra step and show them the accounting process you have in place.

It’s a chance to share your vision

Vision usually costs money. People will give to things they believe in and usually give more in amount and frequency when they can see their money is going to a goal. Communicate your vision for your ministry and the God sized plans you have.

Use every chance to remind people of the vision and stay consistent with it.

Here’s a bonus idea, my friend Lance Johnson (@pastorlancej) at Skyline Church ( also includes a book from Andy Stanley called Fields of Gold which talks about being a generous giver. It’s a nice touch to say thanks, but also reinforce the message about faithful giving.

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Tips to start your next year budget planning

Well it’s June.

Summer schedules are getting into full swing, a time for vacations, barbecues and VBS.

As we mentioned last week in the article Preparing for the summer cash flow lull, now is the time to plan and budget for what often are lower income months for churches.

This is also the perfect time to begin your budget process for the upcoming year.

“WHAT, You say!?!? We’re only 6 months into the year. We have plenty of time to get that done.

While that is true, what appears to be plenty of time now will very quickly become crunch time. Fall will be here before you know it.

Here are 3 tips to start the budgeting process for next year.

(Of course, here I am assuming a calendar year Fiscal Year)

Review your current year budget against YTD spending and expenses

Where are you at currently in year to date spending? Obviously, for many items that spread out over the year, you should be close to 50% of planned spending. There are items that only occur at certain times of the year so that is not going to apply to all expense lines, but will be a good start.
– If you are over or short on some lines that are consistent expenses throughout the year, consider an adjustment.

Take time to review your “Growth Engines”

What are those things in your ministry that are producing “growth.” I chose italics because we don’t want to be too narrow focused that growth is quantifiable numerically. In many cases it will be numbers so what are those things that you are doing that reach people. What is bringing people to the church? What is helping people grow spiritually?

We’d challenge you to consider investing in areas that produce growth and strongly review and consider those items you are spending money on that may not be producing “growth.”

Consider your “Growth Engines” to date and plan a budget increase accordingly

What has happened so far this year in the growth of your ministry? Are you seeing an increase? Has giving increased? If not, you should consider some options we laid out in this post

Now is the time to start praying and seeking the Lord’s guidance for the finances of your ministry. Ask for a big picture approach to the budget. Here are some questions to consider:

What ministry areas do we want to focus on for the upcoming year?

Are new ministry opportunities opening to us?

What’s changing in our community that we need to be aware of and prepare for?

Look to simplify your budget

As your ministry develops and grows, the quantity of expense categories will also grow. Over time, this can get out of hand and lead down a road where future year’s budgets and reports can get confusing and difficult to analyze.

Consider this time to simplify.

We’re not necessarily saying to remove lines, but let’s think about things in terms of bigger buckets. What is your mission of the church? Let’s break up the mission and create those areas as “Expense Buckets”

For instance, let’s consider the following.

Give, Grow, Go, Guide

Using these items we’ll setup the following:

Give – outreach expenses for local ministries, things you’re doing to give back to the community, etc.

Grow – expenses for ministries within the church

Go – expenses for missions

Guide – for lack of a better word and it started with “G”, but this is where I’d put all operational expenses. Utilities, Rent/mortgage, Insurance, Payroll, etc.

Start Today!

Overall, because summer gives most of us a time to slow down, it’s also a great time to review and plan for the upcoming year.

Here is a good rule of thumb for scheduling your budget review. (once again, assuming calendar year fiscal year)

June – begin review of current and big picture plan for next year
August – Begin to formulate upcoming year expense plan
September – Have new year budget prepared for leadership review
October – Have budget prepared for congregational review and vote (if necessary)
November – Finalize budget based on leaders and church response
December – Implement budget adjustments for the next year to hit the ground running Jan 1.

We’ll post next month some info on tips to get more specific with budget planning.

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Preparing for the Summer Cash Flow Lull

Let’s face it, summer is a tough time to do church.

Historically, summer brings a lull in cash flow for churches. Children and Youth programs are in full daily swing as VBS, Camps and Trips send your staff and kids into a frenzy of action. With that also comes a cash outflow that you need to manage well.

Outside of your church events, summer is time for families to travel, vacation and spend time doing things that take them away from the regular schedule of your ministry. Let’s just call it what it is, when people don’t attend, they generally don’t give.

I realize that is a broad generalization and there are faithful saints that give to your ministry regularly without fail, right?

Here are some ideas for you to consider to manage cash flow during the summer giving lull.

1. Offer Online Giving –
If you are not offering an opportunity for your congregation to give electronically, you are missing a huge opportunity. I put this at number 1 because it really transcends a summer issue, and really is an issue you should consider regardless of the time of year. Here in the midwest, we had 2 major snowstorms that happened to hit on Sunday mornings. Most churches cancelled services on those Sundays and from the giving records we manage, most experienced a low week in giving. Some things to consider with online giving:
– Can you setup ACH recurring payments?
– Can you setup multiple giving income accounts?
– Can you see Cash flow forecasts?

we have a solution and company that we’ve partnered with that offers the best bang for your buck that we’ve found.

2. Communication is Key!
During the summer when schedules are crazy, consider several modes of communication. Because your attendance will be intermittent, consider alternative means of getting information out about your church.
– This is a great time to start a WEEKLY newsletter. Keep people in the loop about what’s happening at the church so they can stay connected while they may be out of town. I’m reminded of an old marketing tactic about keeping yourself Top of Mind…

– Consider adding a short video to email, social media or blog post on your website. You’ll be surprised at how many people will take a few minutes to watch a short video message about what’s happening at their church. Webcams and online tools make this simple and almost free.

– Prepare this communication. Let people know what they can expect from the summer before hand, keep them connected while is happening, then recap as thing are winding down back into the fall.

3. Develop Spending Habits to Match Summer Giving.
This takes a bit more time investment and planning but you will see huge benefits in taking the time to set things up. Take a look at your budget and see what expenses can be lowered, delayed or eliminated during the summer. Budget for your larger expenses in the fall or spring. Watch your expenses every 30 days throughout the summer and make adjustments as needed.

4. Encourage and Be Open about Giving Needs
We all know that giving talks are one of those uncomfortable discussions we all need to overcome. Make it a priority to change the giving culture of your church by being open about what the Bible says about giving. Take it a step further, lets add some practical stories and tid-bits to your messages about giving. Share practically what tangibly has happened for your church because people gave. Share about transformed lives that were made possible because the church had the resources to reach out. Put these stories into short video clips with the people involved sharing from their perspective. You’ll be shocked at the results.

5. Finally, Don’t let the summer slump be a mentality
I’ll admit, its even hard for me to maintain energy through the summer. We know that summer will be a down time in giving, but let’s reframe the conversation and commit summer to be a great time for giving. Keep the mission and vision re-inforced through your communications and let people know its the perfect time for creative and strategic outreach opportunities.

Take a few steps to make this summer the catalyst that kicks off your fall ministry schedules. Start planning now, so summer ministries are successful.

If you’d like help in budgeting or planning your summer finances, get in touch and we’ll help out!

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Gifts For Your Church Staff

With the holiday season approaching, we’re all getting into the giving spirit. This is definitely my favorite time of the year.

What a great time to consider showing your staff members just how much you appreciate their work and dedication. But what about those gifts and what are the tax implications of gifts to employees. Here are some things to keep in mind.

I got asked the other day about how to handle a cash bonus to the staff and whether or not those gifts need to be taxed as income.

The answer for your staff members and cash gifts is yes, they do need to be taxed as income to the individual.

But what about a gift card, doesn’t that fall under the de minimus fringe gift rule? Actually No, according the IRS section 132 (e)(1) of the Tax Code a de minimus fringe gift is defined as “any property or service the value of which is so small as to make accounting for it unreasonable and administratively unpractical.”

A gift card, no matter what the amount, will need to be purchased using some form of cash transaction from the church. Therefore, that cash will need to be accounted for making that gift ineligible under this rule.

Here are some ideas on gifts and how to handle it:

– Church approved cash bonus to each employee. The amount of the gift would need to be reported on the W-2 and have taxes withheld. Your payroll administrator could gross up the amount so they net the value you’d like them to receive.

– The church provides each employee with a small, novelty gift which they spend around $20 each. This would fall under the de minimus fringe benift rule and would not need to be reported since the item itself to the recipient would not have a measurable value.

– The church provides each employee with a $20 gift card. Since the value can be measured (i.e. $20), this would be considered a taxable gift.

– Church takes the employees out to dinner. The IRS allows “group meals or picnics for employees and their guests” as a nontaxable de minimus fringe benefit.

– The church provides a $20 gift card to their volunteer, NON PAYROLL staff. This would need not be reported as taxable income because the volunteers are not employees. Additionally, a 1099 would not need to be generated as long as the yearly amount is less than $600 to the individual.

For more information, give us a call or send an email. We’d be happy to help you manage your church finances and position your ministry for success financially.

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Budget for Contingencies

After working with several churches recently I found an interesting trend that I wanted to share.  As we were preparing budgets for the upcoming year, we found that most of the churches initial draft contained most of the line items from the previous year with an adjustment for the upcoming year.

While this is exactly correct, we found an area that many churches were leaving out and not considering.

A friend of mine has added a line item to his budget each year which he uses as contingency.  He purposefully budgets for opportunities that may arise throughout the year.  By adding this money into the budget, he is better able to make decisions as ministry opportunities arise.  He is also able to side-step potential landmines if unexpected bills should appear.

For most committee driven churches, the very idea of a contingency budget line will send most finance committee chairs into a frenzy.  However, I’d contend that the lack of this line could be more detrimental to your flexibility for ministry.

Take a minute and review your budget this upcoming year.  Have you budgeted to allow God to move and bring opportunities your way?

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IRS Announces New Mileage Reimbursement Rates

Since most people aren’t anxiously waiting news and updates from the IRS, you like many others may have missed the changes the IRS made to the mileage reimbursement rates for 2013.

Starting January 1, the IRS has increased the rate of reimbursement by $0.01 for mileage driven for church-related business purposes.  Being aware of this change will help you to budget correctly should this be an area of spending for your church.

As always, if you’d like more information on making the bookkeeping process for your church more simple, Contact Us and we’ll show you our tool for simplifying church accounting.