At my annual checkup, the doctor ordered a number of blood tests. I didn’t think much about it until a copy of the test results arrived in the mail.

The report had a lot of numbers listed under “in range,” “out of range” and “reference range” headings. I had many questions as I scanned the list, particularly about the numbers in the “out of range” column. What does that mean? Is one result more important than another? Does it matter if a number is out of the reference range by a little or a lot — or if it’s “high” or “low”?

There was a wealth of information at my fingertips, but none of it was useful to me because I didn’t understand the report as it was intended to be used. To me, it was just a scrap paper. To a knowledgeable user, it was a comprehensive picture of my overall health.

Asking the right questions
You might find yourself in a similar situation as you attempt to assess your church’s financial health. There’s a lot of information you could gather; but, unless you know the right questions to ask (and how to view the answers), you won’t gain a clear understanding of your church’s financial situation.

Space not permitting, we won’t go into the specific measures a church should track in this article. We will, however, provide insights into what types of questions you should be asking, and how you should analyze the answers.
Here are a few of the questions we always ask when looking at a church’s financial information:

• Are the resources being used effectively?
• Does the church have adequate cash reserves?
• Is the debt level appropriate?
• Are contributions reasonable?
• Are the expense ratios reasonable?
• How do the financial resources of the church compare with other churches?
• What are the most appropriate key financial performance indicators for the church?
• Does the church have adequate financial resources to accomplish its mission?
• Is the church accomplishing its strategic financial goals?

The answers to these questions offer insights into different facets of the church and how it’s using its financial resources. The resulting financial indicators will provide an assessment of your church’s overall financial health.

Gauging wellness
Just as a blood test helps the doctor know what to do to keep you in optimum health, a properly designed financial indicator can help a church administrator evaluate the financial wellness of a church, and also identify areas for improvement.

These are two ways to look at financial trends in your church. The first is with inward comparisons — comparing data from prior years to the current year. Inward comparisons allow your church to see how funds are received and spent over a set period. Reviewing and comparing this data across a number of years will help identify historical trends and any underlying changes within the church. This can help your church align its spending patterns with its mission and vision.

The second method is to compare your church with other churches of a similar size. Comparing your church against other churches with similar asset sizes can be misleading, because churches with older properties tend to have smaller property values due to depreciation. At the same time, comparing your church to churches with similar revenues might not be effective either, unless the makeup of the revenues is known.

For example, one church might rely solely on contributions, while another has significant sources of income from a school or other activities. Or, a church might be seeing unusually high contributions because of a capital campaign. That’s why we recommend that churches compare themselves against churches with a similar number of average weekend adult attendees, instead.

While the numbers these comparisons provide are important financial indicators, it’s also crucial to understand how these measurements fit within the range of peer churches against which your church is comparing itself. A measurement calculated by averaging data from just a few peer churches might produce a much different result than one calculated with data from many churches.

Finally, it’s important to benchmark your church against others in a similar region of the country. Operating costs in the Midwest, for example, can be very different from costs in New York or California. Using averages from peers with demographics similar to a church’s own can provide a more accurate and objective measure of financial health.

Next steps
Determining what information to track in your church’s indicators, and finding peers to benchmark against, can seem overwhelming and time-consuming. One suggestion is to network with peer churches in your area, and agree to share data. If your church is part of a church business administrators group (such as National Association of Church Business Administration, or NACBA), it could do comparisons with other members.

Additionally, specialized reports — such as compensation studies — are available. Your church can consider using tools such as the Church Financial Health Index™, which was designed to provide in-depth answers to several of the questions mentioned at the beginning of this article. To find out more, visit www.capincrouse.com/churchhealth.

Our hope is that your church begins to ask the right questions and use indicators that will give an accurate picture of its financial health. This insight can help your church function more efficiently and effectively to accomplish its ministry.

Sarah Thompson is audit manager at CapinCrouse LLP. She can be reached at sthompson@capincrouse.com.

When Dr. Robert Jeffress became the senior pastor of First Baptist Dallas in Dallas, TX, one of the things he set out to do was reinvent the 145-year-old downtown church.

First Baptist had amassed a hodgepodge of buildings that didn’t fit with one another, or with the aggressive revitalization of downtown Dallas. Jeffress says he knew immediately what needed to be done: Rebuild the church architecturally, as well as spiritually.

So, in November 2009 — in the midst of the country’s worst economic recession since the Great Depression — Jeffress announced a grand vision for what would become the largest church building program in modern history: a $130-million new campus in the heart of Dallas. The new 500,000-square-foot facility opened its doors to the public last Easter Sunday.

Jeffress is quick to admit that the mammoth undertaking wouldn’t have been possible without the “supernatural working of God.” Still, he says he can’t emphasize enough the importance of planning and leadership in the success of any building project.

In an interview with Church Executive, Jeffress shares some of the lessons he learned leading a church makeover.

Just do it. When people asked Jeffress if he prayed about whether or not to reconstruct the campus, his answer was a resounding “No.” Jeffress says he looked at the Old Testament book of Nehemiah and found that Nehemiah never prayed to God about whether or not he ought to return to Jerusalem to rebuild the walls of the city.

Jeffress reminds church leaders that there are some things they don’t need to pray about because God already put those things in their hearts to do. “What you need to pray for,” he says, “is that you do it in God’s way and on God’s timing.”

Be fully involved in fundraising. Jeffress maintains that only God can stir the hearts of people to give, but that as a leader he needed to be totally dedicated to the task of asking people to give. Jeffress says one of the things he realized early on was that if he was to successfully raise $130 million, he must give 100 percent of himself to the fundraising aspect of the building project. And that’s what he did. Jeffress gave one year of his time to raising funds — no book writing, no outside speaking engagements. The only other thing he did was preach at his church.

Secure the investment of those who can give the most. As soon as the church committee approved the possibility of building a new campus, Jeffress picked 100 church members who he felt had the ability to give the largest amount of money and personally met with each one of them. In total, those 100 people made a commitment to give $65 million — one-half of the cost of the project.

Jeffress then made an announcement to the congregation: “I said, ‘Here’s what we propose to do; here’s what it’s going to look like — and, by the way, half the money has already been raised.’” People were ecstatic, he says, and voted unanimously to proceed in a public fundraising campaign.

Help your people visualize the project. Jeffress cites the example of the 12 Israelite leaders who were sent out by Moses to explore the Promised Land and came back with a visual picture: a cluster of grapes so large that it had to be put on a pole and took two men to carry.

In the case of First Baptist Dallas, Jeffress says the church used social media, technology and the “printed page” to give the people a picture of what the future could look like. “We spent a significant amount of money creating an animation [film],” he says. “I would also say not to spare any expense in the production of printed materials — make them full-color, on beautiful paper. Don’t use flimsy paper for commitment cards. People aren’t going to make a million-dollar commitment on a flimsy piece of paper. I really think attention to details like that help make for a successful project.”

Lead through the pulpit. “Use your preaching to carry the church to where you believe God wants it to go,” advises Jeffress, adding that it’s a principle he learned from Willow Creek Community Church pastor Bill Hybels. “There are a lot of pastors — and I used to be one of them — who believed they should never use the pulpit to try to get the church to do something; they ought to do that outside of their sermon,” explains Jeffress. But, Jeffress says he learned that if a leader’s vision is God-honoring and is in keeping with God’s will, he or she should use the Scripture to communicate to the people where and how God is leading the church to go.

Don’t underestimate the financially challenged. Knowing that many people at his church were struggling financially, Jeffress says he softened his appeal by excusing those who did not have jobs from giving to the building project. “I tried to show sensitivity,” he reasons. But, he says, a couple approached him — the husband had been out of work for a year — and said, “Pastor, don’t rob us of the joy of being able to participate in this undertaking.” The couple handed Jeffress a check for $5,000 — the last money they had in the bank.

“God has since blessed the husband with a wonderful job,” says Jeffress. “But I learned that, as pastors, we’re to put the challenge out there and let God speak to the hearts of those who need to give.”

Operate in your area of strength. Leading the team for the building project of First Baptist Church was executive pastor Walter A. Guillaume, Jr., who worked alongside a 12-member committee and a full-time construction supervisor. “They spared me from so many details,” says Jeffress, who admits he doesn’t know a thing about construction, electrical outlets and building materials. “One thing I learned during this project — and I learned it from talking to other pastors — was that the pastor needs to concentrate on doing what he and only he can do, and let the committee build the building,” says Jeffress. He says what God has called and gifted him to do is to encourage the people to give and provide the overall vision for what the project ought to look like and its role in fulfilling the vision of the church.

You have to spend money to make money. When Jeffress came to First Baptist Dallas as senior pastor, the church was already $15.5 million in debt from a previous project. Imagine the shock of the deacons when, one evening, Jeffress told them they needed to borrow $5 million to get the architectural plans drawn up and to do all that was needed to be done to raise the funds. Some people left the church because of it, recalls Jeffress; but the deacons, by and large, stood by him. “It cost us $5 million to raise $130 million,” he says.

Six weeks is all you need. It takes a lot of time to sow the seeds, but, according to Jeffress, the actual campaign shouldn’t last more than six weeks. Otherwise, the people at large will grow weary of it, he says.

Don’t build any more than what people are willing to give. Jeffress says one thing that gave the members of First Baptist Dallas the confidence to give was the leadership’s commitment: “We’re only going to spend what you commit.” In other words, if the project was going to cost $130 million, and the church only raised $115 million, it wasn’t going to borrow the other $15 million. “It made people give generously — and, of course, it’s going to keep us out of debt,” says Jeffress.

Bathe everything in prayer. “We had in our church 300 men, called the Pastor’s Prayer Partners, who regularly prayed throughout this project that God would guide us and bless our efforts,” says Jeffress.

Cast the vision beyond the project’s completion. Jeffress believes the new campus is not an end unto itself, but simply a tool to use in ministering to the city of Dallas even more effectively. “This is a new beginning for us — to reach more diverse groups of people,” says Jeffress.

First Baptist is also getting ready to enter into mainland China with its broadcast, with the potential of reaching 1 billion people. “We always have a new goal — but, hopefully, no new buildings for a while,” Jeffress concludes.

The well-regarded Carver governance model can work for churches.

Policy governance was created by John Carver in the 1970s and is described in his book, Boards that Make a Difference, first published in 1990. After observing our University’s governing board transition to a policy governing board several years ago, I have been an advocate of adapting John Carver’s model of policy governance for churches and other Christian organizations.

I also know from experience in consulting with churches and Christian leaders that governance structures and decision-making systems are especially slow to change. But left unchanged, these factors often become a hindrance rather than a help in accomplishing the church’s mission. What is needed, especially in larger, growing congregations is a more comprehensive, consistent, holistic process for the governing group.

In this approach the board or a leadership team of elders and senior staff appropriately oversees the church’s fulfillment of mission toward its vision while empowering the ministry staff to lead and manage the details of ministry. The primary purpose of this leadership team is to see that the church or Christian organization achieves what God desires and avoids what is unacceptable. The model often adopted is some form of policy governance.

John Carver model
Policy governance was created by John Carver in the 1970s and is described in his book, Boards that Make a Difference. In the foreword to The Policy Governance Fieldbook, edited by Caroline Oliver, Carver tells why, after years of serving on boards and with boards as a CEO, he devoted his life to improving board governance: “There was no model for governance.”

By model he means “a collection of principles and concepts that make sense as a whole.” Thus, he defines policy governance as “an integrated set of concepts and principles that describes the job of any governing board. It outlines the manner in which boards can be successful in their servant-leadership role, as well as in their all-important relationship with management” (see www.carvergovernance.com).

The goal of this governance model is to empower the board or governing group to focus on the “big picture” vision of the organization and to empower the administration to focus on carrying out the vision through appropriate and acceptable means within the limitations set by the board. By applying the Carver model, a board is better able to distinguish between governance and administration through the use of four different kinds of policies: (1) ends (or vision) policies; (2) executive limitations policies; (3) board-executive relationship policies; and (4) board process policies.

Some churches and ministry-based organizations have modified this four-part model into a three-pronged approach based on John Kaiser’s book, Winning on Purpose: How to Organize Congregations to Succeed in Their Mission. Kaiser calls this approach “The Accountable Leadership” strategy. Within this ministry-modified model, boards develop policies — or, as Kaiser calls them, “guiding principles” — that address three key issues: (1) defining responsibility (comparable to vision/ends policies); (2) delegating authority (comparable to limitations policies); and (3) determining accountability (comparable to some board process policies and to relationship policies).

Whichever model one chooses, it is readily apparent that boards of churches and Christian organizations would benefit from a clearer definition of the board’s role, its responsibilities, and its relationship with the director, president or pastor. In deciding whether policy governance should be adopted or adapted as the model of governance in churches, there are some important issues to address.

Biblical worldview
First of all, any discussion of governance for God’s people should begin with a biblical worldview, which means seeing the task from the Creator’s view (as revealed in creation) and Christ’s view (as revealed in redemption), not merely Carver’s view (as reflected in the Fall). In Carver’s model, the board holds itself accountable for its performance and holds the chief executive accountable to approved policies.

In Scripture, the first line of accountability for all leaders is to God, which may be missing in Carver. For Christian leaders, mutual accountability flows naturally out of living in a reconciled relationship with God and others in an authentic, accountable, covenant community. John Kaiser’s “accountable leadership” approach to applying governance in the church is consistent with God’s original intent for governance that is “safe and effective.”

Second, applying policy governance in a church context requires rethinking the issues, processes, attitudes, and behaviors of those who lead and govern. There are practical reasons for the concepts and principles of policy governance to be adapted without adopting all of the assumptions. God’s intention was not to create a board of directors and a corporate CEO, but, rather, a community of mutually accountable servant leaders who work together in fulfillment of their distinct roles by allowing for diversity in equality and unity.

Third, through a careful study of Scriptures, leaders should frame the discussion biblically so the elders can function collectively as a group “to guide God’s flock,” “guard God’s family,” and “govern God’s people,” as Rick Thompson suggests in E3: Effective Empowering Elders.

Faithful and fruitful
Many of the good elements of policy making can be incorporated, but not at the expense of other critical functions that must be carried out for a congregation to be faithful and fruitful. Elders and ministers dare not minimize the importance of fulfilling such vital tasks as shepherding, equipping, and mentoring, nor overlook the obvious need for spiritual leadership. From this writer’s perspective, church boards and often elders are too involved in managing or micromanaging the ministries of the church while no one is effectively leading the overall ministry of the church. The critical need in many churches is for clearly differentiated roles for elders who govern, ministers who lead, and ministry staff and teams who manage the ministries.

As churches adapt policy governance in some expression of elder governance, it is my prayer that they would develop a healthy leadership team comprised of elders and the senior minister, whose collective responsibility is to govern the church through necessary and appropriate policies or guiding principles.

When a leadership team fulfills this vital role, the ministry staff and entire congregation will benefit from their defining responsibility, delegating authority within boundaries, and determining accountability. And, ultimately, Christ will be served and his kingdom will be advanced.

Dr. Don Green is director and professor of leadership at Lincoln (IL) Christian University [www.lincolnchristian.edu]. Adapted from an article last year for ChristianStandard.com.

The economic turbulence across the country has created a bumpy ride for church giving. Capital campaigns in churches are also feeling the effects. If your church is considering any type of expansion, there are some current trends and changes on the horizon.

Trend #1: Projects are becoming less frequently building-related.

There is a trend away from building expansive multi-million dollar auditoriums. With construction costs and borrowing limitations prohibiting large construction projects, church leaders are turning to creative alternatives. And many are finding that relevant ministry spaces already exist in their community. This trend has brought about a change in terminology with the term, capital campaign, giving way to the more relevant expression, ministry expansion project.

These innovative strategies are often more compelling to supporters because they can see that their gifts are being used wisely and creatively. The costs are often much less than new construction, too.

One of my colleagues helped a church raise millions for several church plants in a major metro area. Not a dime went to any capital improvement.

Ideal spaces

A church purchased an office building adjacent to their campus for a much less than it would have cost to build new offices, even after the renovation. Then their old office space on the main campus became the ideal space for their children’s ministry to expand.

Another church has committed to placing one of their locations within a 15-minute drive of all the people in the northern part of their state. They have also learned to take advantage of meeting space in hotels that cater to business traffic during the week but are nearly vacant on weekends. The cost is not much different than a long-term mortgage, and they gain flexibility with less long-term financial commitment.

To expand, many churches are moving to a multi-site or multi-venue model that results in more locations, at less than half the cost and in half the time. Watch for the Internet church experiment to explode in the next year.

Trend #2: The giving season is growing shorter.

Traditionally, capital campaigns adapted a three-year giving season, primarily because of the need to maximize pledges to secure a long-term loan. But with less lending options and cheaper alternatives to building, there is a trend for more frequent mission expansion projects with a smaller giving season.

Multi-site strategy

For example, a church I work with just finished a massive construction project and immediately outgrew the space within months of opening. Ordinarily, the next step would have been to build an even larger facility at a projected cost of more than $30 million. Instead, they are opting for a multi-site strategy at less than 10 percent of that cost. Rather than the standard three-year giving season, they are pursuing financial gifts within the next nine months only. The cash will be in hand when the multi-sites are launched in the fall and no bank loan will be required.

There is no reason that a church should not consider a series of smaller campaigns over three years rather than one large one.
In turbulent times, people are much more comfortable with short-term commitments because of uncertainty about their job, or financial investments. Bank loans are not necessary for many projects today if you can raise the necessary resources in a shorter amount of time. People appreciate paying as they go in projects rather than committing the church to long-term debt in these times.

Trend #3: Mission expansion will be a rare opportunity to build faith and overcome fear.

Now more than ever, a mission expansion project is a spiritual journey. The disruption of economic confidence is opening a rare moment to teach, preach and celebrate the uniqueness of our faith.

Trend #4: Churches will perish for lack of vision.

In times of crisis, vision will be the defining factor for a church’s success. Churches with weak vision will decline in this season, as giving loses momentum and the passion of the people turns elsewhere. But churches that excel in the best practices of defining and communicating their vision will flourish.

Trend #5: Mass communication is giving way to targeted groups.

A traditional capital campaign assumes that most of the communication is one-size-fits-all. Just like our culture, church populations have diverse and unique groups that each has their own special needs. So the conversation must be customized for each of those groups. An expensive brochure or creative video alone will no longer be adequate. Intentional layers of communication spread out over more time will be more effective.

In this sense, communication has become far more complex. It will take more time and more intentionality to communicate with the various groups to maximize their financial investment.

Trend #6: The five-week communication window is changing.

In classic capital campaigns, most of the information is communicated in a five-week window, with the assumption that people are in church each of those five weeks. But the idea that projects can be launched and completed in less than 40 days will no longer be the best practice.

Now it is very rare for people to be physically present in church every Sunday. Facebook and other cultural shifts have changed how we communicate. People now long for intimacy, affinity, and community within an authentic context.
In addition to a brochure, leaders are fostering conversation. They are creating places of dialogue where givers can get face-to-face with visionaries in an intimate setting. It has been demonstrated that a steady stream of meaningful communication in the six to nine months prior to the actual public phase of the campaign builds momentum to a tipping point that culminates in a successful financial outpouring.

Trend #7: Leaders are relying on coaching rather than program management.

Pastors are finding that a customized approach is essential. The best stewardship consultants actively coach and come alongside leaders to guide them through best practices rather than only serving as a program director.

While you may wonder if some of these new trends are relevant for your ministry, there’s no doubt that there are big changes in store for church giving in the coming years. As you seek God’s guidance for your ministry’s expansion, consider the changes you need to embrace as you prepare for church in the 21st century.

Brad Leeper is a senior strategist at Generis, Atlanta, GA, one of the nation’s leading stewardship consulting firms for churches and ministries. generis.com

Whether it’s a first-time build or new phase of expansion, embarking on a project elicits both excitement and apprehension even for the most seasoned church professional. Thankfully, many common pitfalls can be easily avoided with the help of some careful navigation and planning on the front end.

When establishing a building committee, expertise counts. No matter how large or small the project scope, lenders appreciate a strong leadership team.  Before you begin your journey, form a panel of lay professionals with diversified backgrounds, such as finance, real estate, construction, accounting, law and property development. A group of professionals will not only provide depth and experience to realizing your vision, but show potential lenders the level of talent that resides within your ministry. Be mindful, however, not to include the contractor or any other project-related vendor on the decision team. Although well-intended, this action can be easily perceived as a conflict of interest through the eyes of the church body or financing source.

Ask questions and know your limits. Can you imagine a first-time homebuyer shopping without knowing his or her budget limitations? Significant decisions require careful and deliberate planning. All too often a church will make a mistake by engaging an architect without ever consulting with a lender as to how much they can realistically afford. By adopting a “financing first” approach, your team can make strategic planning decisions based on actual lending standards.

For years, many inexperienced church lenders have suggested debt levels to borrowers that are too high. Although the additional dollars may appear to be a blessing on the surface, the end result, however, can be expensive with irreversible side effects. This is where lender selection is essential. Look for a knowledgeable lender who can evaluate your current financial picture and provide you with clearly defined borrowing levels based on their extensive experience in the marketplace. Ask them about their approach. Do they have a proven track record? Are their qualification standards clearly defined?  Do they have flexibility in loan structure or offer long-term rates?

Details, details, details. When evaluating a loan request, a lender will expect to see a detailed budget that includes a balancing of all funding sources against the total cost of the project. Understanding this concept is critical and may even require several discussions with your representative. Said differently, if the project cost exceeds your cash on hand, be sure your financing is safely in place before ever breaking ground. Signing your name to a project is a big step and should not be taken lightly. By not having the means to fulfill an obligation, it can jeopardize your organization’s good name and could easily result in reputational damage or even litigation with the builder.

Most lenders also require a 25 percent minimum cash equity contribution of total project costs, so plan accordingly. While a capital campaign can provide supplemental assistance to a ministry’s bottom line, pledge receipts that are specifically raised for a project will have to be deposited with the lender at loan closing to balance the sources and uses of funding for the project.

Prior to approaching a lender for a loan commitment, the church management team should have an understanding of what level of debt the operating budget can sustain. Leadership should ask the question: Will we be able to manage our obligation from our operating budget once the capital campaign is over? In other words, how dependent is the church on the existing campaign to service the debt in place? Relying on future growth projections and anticipated pledges is certainly conventional thinking; however, there should also be contingency plans.

Allow enough time. Underwriting, appraisal, environmental, title work, permits and documentation – these components all consume valuable time in the building and financing process. As an example, a standard church appraisal may take as long as four to six weeks to complete. In order to keep your project timeline on track, consider jumpstarting your application process and apply to lenders at least three months before your projected start date. Your lender decision should be made at least 60 days before breaking ground.

Put your best foot forward. When submitting an application, be prepared to include at least three years of accurate financial statements, a detailed budget, critical timeline, and outline of all project-related information. Capital campaign details, both present and past, will also be required.  Lenders will also want to become familiar with the church’s management team.  A detailed and well-organized package demonstrates thoughtfulness to the lender and saves time during the evaluation process. As the old saying goes, “you only have one chance to make a first impression” – so do your best to make it count.

Mark Winterroth is vice president and relationship manager in the religious institution division at San Francisco-based Bank of the West. www.bankofthewest.com

Economic turnaround for churches

From a financial perspective the last four years have certainly been challenging for churches. However, looking at the data gathered across our church customer base, we have noticed a slow but distinct turnaround.

For example, the general tithes and offerings (T&Os) collected by our customers as reported on statements prepared by certified public accountants increased 4 percent between 2010 and 2011. While 33 percent of those churches saw a 5.9 percent average decline in T&Os, the remaining 64 percent realized a 9.2 percent increase.

Geographic and demographic factors were certainly in play. Nevertheless, it is encouraging to see the 4 percent increase after T&Os declined 1 percent between 2008 and 2009, and then increased 1 percent between 2009 and 2010. We should note that we only analyzed the T&Os line.

The next most substantial revenue line for churches is typically the building fund. Often, gifts designated for the building fund are the result of a capital pledge campaign orchestrated in conjunction with a building phase, and therefore may be non-recurring.

Many churches have put building projects on hold due to an unwillingness to solicit pledge commitments and incur debt during a recession and slow recovery.

For example, over the past three years (2010-12) our construction lending comprised only 24 percent of our total church lending. Over the three preceding years, the number was 47 percent. We have yet to see this trend turn around and we expect it will be a couple of years before we return to pre-recession construction levels. Meanwhile, churches hoping to position themselves for physical plant expansion and related borrowings will need to diligently manage the expense side of their operations, stabilize their net cash flow and re-establish their operating reserves.

Many churches were slow to make tough expenditure reduction decisions during the downturn, allowing cash reserves to dwindle to uncomfortably low levels.

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MARK SIMMONS
Mark Simmons is business manager at Christ Community Church, Milpitas, CA.

Nurturing a spirit of generosity

I’m often asked by small business owners whether it is possible to grow their business given current market conditions. I ask them, “What is your market share?” Rarely is the answer greater than 25 percent.

“So then,” I say, “what you are telling me is that there are more than enough customers, you just aren’t winning enough of them.”

he same is true with the kingdom of God. It’s easy to blame the market. But the truth is we live in a sea of lost humanity. We “are the salt of the Earth. But if the salt loses its saltiness” what needs to be done? We “are the light of the world. But if the light is hidden, what good is it?” What is the solution? Is it to blame the market? No, Jesus said, “Go.” Our Savior said, “Let your light shine before others – our communities, where we live, where we work – that they may see your good deeds and glorify your Father in heaven.”

Similarly, many churches are worried about the economic outlook, and to be sure there is plenty to worry about! In some parts of our country unemployment is well over 20 percent. Nationally, household income is said to be down more than $5,000, while prices rise, especially in housing, groceries and gasoline.

Whether we are talking about businesses, churches or families, most are one pay cycle away from disaster.

The time to act is now. I have observed that churches with healthy, well-discipled members tend to do better in hard economic times. Our church has, for many years, developed and nurtured a spirit of generosity in all things. But we were challenged about five years ago to do more in the area of finances – particularly as it relates to equipping our families.

We now have classes that cover every life stage – 13 in all. We leverage the resources of several Christian organizations that specialize in this area. We’ve retired many millions in consumer debt, taught and provided counseling and other support to help our families get on solid, biblical ground. The benefits to our families are tremendous – and the church has benefitted too.

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DENISE CRAIG
Denise Craig, CCA, is chief financial officer of Abba’s House, Hixson, TN.

Staying at the top of your game

Church business administration is a uniquely challenging, yet wonderfully rewarding career and calling.

Most church administrators come to the field as a second or sometimes third career. The positive side of that is they bring experience to the table. It may be experience in business or a completely different field. Any experience working with diverse people in real-life situations, making stewardship decisions concerning resources – both financial and human – are invaluable when it comes to church administration.

To do this job well, the goal must be to achieve excellence and balance between tasks and relationships. To gain the knowledge necessary to perform the tasks required of an administrator well, I studied and sat for the Certified Church Administration certification program of the National Association of Church Business Administration. The program allows you an opportunity to network with other administrators and to learn from other professionals who have been doing this for years. Relationships are an important part of the job. I find that you must genuinely love people and lead them to become better at what they do while encouraging them to become more like Jesus.

Because our world is moving so quickly, largely due to rapid advances in technology, knowledge becomes stale in no time. Church administrators should commit to life-long learning.

All churches, whether large or small, are facing challenges in the days ahead. I think one of the challenges specifically for the megachurch is to ensure things still feel personal, even in the large church environment. Getting people connected to a smaller group within the church and helping them understand the corporate vision and how it applies to their daily lives is critical.

Some people think that church is not “business.” Actually, it is. We are in the people business. We are in the business of multiplying the disciples of Christ here on this earth. We are in the business of knowing and adhering to the laws of our land. We are in the business of being good managers of all the resources God has placed before us. We are in the business of glorifying God in everything we do, because in him we live, move and have our being. This is God’s business, and I’m glad to be a part of it.

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STEVE BRIGGS
Steve Briggs is associate pastor of administration at First Baptist Church, Hendersonville, NC.

Vision is more caught than taught

Three words come to mind when it comes to making vision come alive and making it happen in a local church – communication, communication and communication! If that sounds like overkill to you then that is maybe one reason your church is missing it when it comes to making your vision come alive in the hearts and souls of the congregation.

Once the lead or senior pastor and his team understand the vision God has given for the church, they must be able to state it briefly in a memorable way. Just a few words are ideal.

At our congregation we use one word – Transformation. How are we transformed? By connecting, growing and sharing. Our logo, our signage, our letterhead, our website, our ministries all communicate this simple-to-understand vision. Christ’s plan for his disciples is to be transformed into his image. The preaching pastors must communicate the vision constantly from the pulpit. All publications – your website, your church’s logo, your use of social media – must keep it before the people.

Tell stories in the pulpit and in your publications that relay real life examples of the vision being lived out.

Make sure every area of your church, from children’s ministry to senior adults to recreation to your small group or Sunday school, conveys the same vision. Everyone must be on the same page. The senior leadership and staff of the church bear the responsibility to make sure all ministries under their guidance stay on the same page.

Finally and of utmost importance, the senior pastor, the ministry staff and key volunteer leadership must model the vision in their daily lives. Someone has said, “Christianity is more caught than taught.” Same with vision: it is more caught than taught!

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ERIC SPACEK
Eric Spacek is senior manager of risk management and loss control, GuideOne Insurance, West Des Moines, IA.

Financial and reputational risks

Risk management is evolving in the business world as the enterprise risk management (ERM) concept takes hold and a number of companies have elevated the position of chief risk officer (CRO) to the senior level. ERM looks beyond traditional operational risks to address risks from all sources across the enterprise, including financial risk and reputational risk. Considering that a fair number of churches don’t do traditional risk management particularly well (i.e., it remains unusual to have a volunteer or staff member dedicated to risk management), expanding ERM into the religious community may be a challenge.

Still, it is important for churches to consider how their potential actions, inactions and decisions can present a risk to the ministry from a reputational or community standpoint. Having a board-level liaison who works closely with the executive pastor or senior pastor on addressing the range of risks that churches face can be a positive way of incorporating elements of ERM into the church environment.

As far as liability risks, I expect the protection of children from abuse by adults and by other minors will continue to be a focal point in the coming years. The Penn State situation placed a renewed emphasis on the importance of having a plan in place to report suspected child abuse to the appropriate authorities.

Many of the liability risks that face churches are not new, such as slips and falls and injuries on the playground. However, some newer risks have emerged including those associated with extreme activities or ministries, such as skate parks, bungee sports and zorbing, the threat of an armed person on premises, and employment and board-related claims.

One factor that presents both a liability risk and a risk to the property is the issue of declining membership in many churches. As the number of attending members shrink, funds become tighter, and churches can begin to struggle to maintain their facility. Sometimes shortcuts necessitated by budget constraints can lead to property damage, such as unrepaired roofs or leaks, leading to further damage or injuries on the premises either due to volunteers attempting to perform work that should be left to professionals or to the property’s overall deteriorating condition.

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SAM S RAINER III
Sam S. Rainer III is president of Rainer Research and senior pastor of Stevens Street Baptist Church, Cookeville, TN.

When big is better

Looking ahead some three to five years I see these things increasing in importance in the church: homegrown leaders, expectations of accessibility, and “big.”

More homegrown leaders. It’s not a new trend. In fact, church researchers have called for local equipping of leaders for a long time. In our globalized society, however, it is becoming even more important. Today everyone has access to the same information at the same time. Podcasts, blogs and sermon videos are ubiquitous.

The best teachers and preachers in the world now broadcast messages for free. Anyone can listen and benefit from excellent teaching – simply take your pick from several great leaders. The problem is applying this teaching to a variety of individual contexts. What is needed are local leaders who understand unique cultural nuances of small towns, neighborhoods and enclaves of larger metropolitan cities.

Many churches will benefit by training and equipping local, homegrown leaders who have specific, lifelong knowledge of their context.

Top church leaders will do better in most cases to train up people from within the church rather than hiring from the outside.
Increased expectations of accessibility. As social media matures (and potentially peaks), followers will expect to connect to leaders through technology. In general, accessible leaders will be viewed more positively than inaccessible leaders. Being perceived as accessible is accomplished easily and quickly by remaining relatively active in social media.

While not every direct message on Twitter demands a response, regular interaction with followers through social media helps a leader be viewed as more approachable when face-to-face interactions occur. Church leaders should take advantage of these easy tools to communicate with their congregations.

Big becomes more popular. While a few may decry the constant focus on larger churches, the reality is the biggest churches are getting bigger at faster rates than churches of other sizes. Many small churches are certainly doing good kingdom work, and the desire by some to highlight this work is noble.

In the next five years, however, the self-generating gravitational pull of the largest churches will grow. In short, the big will continue to get bigger and more popular. Within a five-year window, the growth of multisite megachurches will continue to accelerate. The long-term prospects of this growth are debatable, but big will remain popular for the mid-term.

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JOHN MRAZEK
John C. Mrazek III is executive pastor of Pathways Church, Denver, CO.

Building a ‘MILLENNIAL-FOCUSED’ church

It is already happening in corporate America and now it is creeping into our churches as well! Boomers are not leaving their leadership positions in either place and their continued influence is hampering the ability of Gen-Xers and millennials to create church environments that meet their needs.

That is why my congregation, Pathways Church, is committed to creating opportunities for millennials to experience grace and redemption in their type of nontraditional church venue. More churches might do the same. What does a truly millennial-focused church look like? We believe it is a place that is saturated in community, raw uncensored truth, and missional impact that is very personal. Every generation is naturally drawn towards authentic community within their context.

We find that millennials desire community as they do breathing and demand it in every area of their lives. Small groups are just the beginning at Pathways because every event or project starts with ensuring community is the primary focus.

Secondly, we do our best to leverage technology and personal stories to present truth in as many formats as possible. Sometimes situations really suck and that is the only authentic way to say it! Finally, traditional strategies are not helping us “own” the one-mile radius around our church. Our people really want to interact personally with the homeless and crave missional events that make that possible.

Pathways Church has many local ministry partnerships that put our people on the frontlines of caring and presenting the love of Christ in very tactile way. Millennials are the future of the church and our society. We can’t wait another five or 10 years to begin listening and changing our churches to serve them. It has to happen now or our churches will continue to fade and become irrelevant to a generation that is rapidly running out of godly truth sources and accessible grace.

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MIKE KLOCKENBRINK
Mike Klockenbrink is chief of staff at Lakeside Church, Folsom, CA.

Creating a mountain to climb

I came into my church job from an industrial supply company. And for others who come to church administration from the secular workplace, there are some characteristics that are common to both.

First and foremost, one must be a leader, a listener and team builder. The ability to recognize leaders and collaborate will be key to one’s success. What I recognize today is that while most business executives have one or two specific skill sets, the majority are much more generalists. One must have the ability to put together teams of skilled individuals for the task at hand. This person must also have an appetite to be a learner.

Everything you do is a process. The question is do you have a process for that? What are your key processes that you measure your success by? At a minimum, you should have a process developed for these areas. Bring your teams together to develop a process. This way you have buy in, eliminate a majority of your potential mistakes and increase your probability for success.

When it comes to innovative and forward-looking directions, this goes back to having an appetite to learn and innovate. One must be in touch with technology. I don’t mean they need to be a geek or gadget guru. They must have the desire to explore new tools and technology that are available to them. Consistently ask the question, how can we do this better? This is a time to play, experiment, and ask the question, “What if?

Let’s face it, social media is here to stay. So how do we adopt, adapt and make the most of it?

Today people want to make a difference; they don’t want to just go to church. So how do we create online community opportunities? How can the church go viral within its community? The church must create a mountain to climb.

Why is it when asked the question “What would you do if you knew you wouldn’t fail?” we have incredible ideas or risks that we would take. So what if you do fail, it’s better than not trying at all. For this next year, think big, dream big, go big, or stay home.

Generosity in action

Christ Community Church, St. Charles, IL

In early 2012, Christ Community Church (CCC) learned about the plight of Sudan’s Nuba people through Samaritan’s Purse, a Christian humanitarian organization.

The Nuba people are primarily farmers who have been forced to flee from the Nuba Mountains because they are being attacked by their own government. Food is becoming scarce, and there is a risk of famine as these people have not been able to farm their fields.

Christ Community Church felt a burden to help. Because CCC has had a relatively healthy level of giving and has maintained its expenses, it was able to immediately give $80,000 from its surplus to Samaritan’s Purse.

But CCC didn’t stop there. The leaders felt it would be great if the church could give a little bit more, so they decided to share the need with the congregation and challenge everyone to give a special offering over two weekends. To encourage generous giving, the church offered to match every dollar that would be given. After a couple of weeks, CCC received $90,000 in special offerings from the congregation, which the church doubled. At this point, the donated funds totaled $260,000. However, even after the church had shut the campaign down, it still received another $8,000 from the congregation – raising the total donated funds to $268,000.

Mark Ahrenholz, chief financial officer, says the church was able to react quickly to a need because of the generous support of the congregation throughout the year, “allowing us to have some reserve available for something like this.”

Ahrenholz says the 28-day devotional booklet on generosity by Gordon MacDonald was a big factor for inspiring church members to take their giving to the next level. At a time when the economy was down, Ahrenholz says the Holy Spirit was at work in the hearts of so many people to make sacrifices and increase their giving.

[Source: Mark Ahrenholz, chief financial officer]

Stewardship in tough times

North Coast Calvary Chapel, Carlsbad, CA

North Coast Calvary Chapel moved to its new campus in 2008, at the onset of the recession. The church felt and still feels the impact of the financial crisis. Many members lost their jobs and had to go elsewhere to find work and affordable housing. This affected church giving and, consequently, the building campaign.
To alleviate the situation, North Coast Calvary Chapel did the following:

• Froze all salaries for three years, from 2009 to 2011.
• Initiated a special giving fund for members who could afford to give over and above their tithes, so that no employees would be terminated due to the recession.
• Refinanced its long-term debt as rates continued to decline.

Twenty-five percent of church members who tithe supported the special fund, allowing North Coast Calvary to operate without any layoffs during the difficult times.

North Coast Calvary doesn’t use any consultants for fundraising or financial management.

What it has is a rigid financial control process under the oversight of a finance committee composed of accomplished business leaders in the community who also are church members. An audit sub-committee provides internal auditing of financial controls. Giving reports are provided weekly and detailed financial reports are provided monthly. An independent audit is performed annually.

Today, phase one of the building project is complete. For the next phase, all the design work has been completed, and half of the funds required to begin construction have been raised.

[Source: Art Braun, controller and system administrator]

Financially transparent

First Baptist Church of West Palm Beach, FL

Four years ago, First Baptist Church of West Palm Beach was faced with too many expenditures and too little revenue. Unfortunately, this conundrum is faced by many churches. To resolve this challenge, the church made the decision to do less with less and become highly efficient stewards of its resources.

The operating budget was reduced through a variety of ways, including personnel reduction, closing down buildings, and decreasing programmatic expectations. Many tough, necessary decisions were made to ensure that it operated within its means. Four years later, FBC is experiencing the fruit of those decisions. The church is more financially sound and is a better steward of God’s resources.

A simplifying of the budget and a transparent process has greatly encouraged and increased support for the financial practices of the church. Most individuals find it difficult to support or find great excitement in something that they do not fully understand.

When FBC communicates its budget to the congregation, it does not try to show off the vast, complex understanding of the numbers. It uses common language and examples to communicate the
information.

The process is transparent. Every month the church reports its finances to a committee of church-nominated financial laypeople. They serve as advisors. At any time, a church member may meet with someone in our financial department to view and discuss finances.

The numbers are audited annually, and the church is a member of the Evangelical Council for Financial Accountability. These efforts have produced a great level of trust among congregants in the way it handles its gifts to God. Because congregants understand and trust the presentation of finances, they are more excited to financially participate in the local church.

[Source:Art Rainer, administrative pastor]

Open disclosure

Philadelphia Baptist Church, Deville, LA

In 1995, Philip Robertson was a fresh graduate of New Orleans Baptist Theological Seminary when he became the pastor of Philadelphia Baptist Church (PBC). Year after year, under his leadership, the church has either met or exceeded its annual budget. The church has consistently run a fiscally conservative financial path. Robertson believes in building trust among his congregation by openly communicating the church’s financial goals – weekly through the bulletin, and annually when the budget is presented. Each staff member is asked to share in writing their annual budget plans and how these plans will help PBC reach its community and surrounding region.

PBC uses a financial management platform through ACS Technologies, which allows key leaders to have access to important integrated information. Since 1995, the church has benefited from the stewardship expertise of Cargill Associates and The Gage Group. In 2009, inspired by Sagemont Church in Houston, TX, PBC adopted a “building without borrowing” mindset. Since then, PBC has done several million dollars’ worth of renovations, construction and capital improvements.

[Source: Dawson Bailey, associate pastor]

Trust, but verify when staff and volunteers handle funds.

As an auditor I often write and speak on the topic of internal controls and the importance of protecting the church from fraud. Sometimes people think I have to say these things because it’s my job, or that I’m engaging in scare tactics to get them to implement more work. The reality is I have a real heart for ministries. I understand that churches have limited time and financial resources, and that this can leave them at greater risk.

I conducted an interview at a recent seminar with a church business administrator who serves a ministry where fraud took place. This individual serves a church in Orange County, CA, with a small staff and what it thought were good, basic financial controls in place. The person primarily responsible for the bookkeeping was a trusted individual who had served in that capacity for a few years. There were strong controls in place for Sunday morning contribution collections and deposits, but the church had some weaknesses surrounding cash received at other times and from other places, such as ministry funds within the church.

After the bookkeeper left the accounting department to take another role within the church, the new bookkeeper found paperwork that didn’t seem to reconcile. The church soon discovered that the previous bookkeeper had periodically deposited checks directly into her personal bank account via an ATM, rather than into the church’s account.

Immeasurable pain
The initial discovery process progressed very quickly. The administrator obtained a copy of one of the checks in question and contacted the bank. Within hours, the bank was able to identify more than $50,000 that had been stolen. The individual was confronted and the police were notified.

The process did not finish quickly, however, and included tedious, time-consuming procedures. Several people from the church had to individually sit in a room with a police detective, review checks made out to the church and deposited into the bookkeeper’s account, and sign an affidavit that the funds were meant for the church, not the bookkeeper. The district attorney filed charges, more than $200,000 was determined to have been taken, and the former bookkeeper was sentenced to five years in jail.

Tighten up controls
The pain this created for so many people was immeasurable. People wondered how it could happen in their church. Some blamed certain individuals for allowing it to take place. Others felt the church was too hard on the individual and should never have involved the police. The time and energy it took over many months was a distraction to the church and to the ministry that should have been taking place.

During the process of getting to the bottom of this, the church realized that the bank reviews ATM deposits very sporadically, making the fraud less likely to be detected. In our interview, the administrator noted that the church had auditors who audited or reviewed their financial statements, providing some independent review of their internal control systems.

Management and the auditors had determined that while some controls were lacking, this deficit was not likely to result in a material misstatement or a material fraud. One check a week was all it took, however. “Materiality and cost-benefit analysis are tough when you are dealing with fraud,” the administrator said.

The church has moved on and the administrator looked at ways to tighten up controls he previously thought were adequate. Ministries within his church are now responsible for completing their own reconciliation of funds received, and those are compared to deposits and general ledger entries. Emphasis is placed on making people aware of the risks that exist and the controls that are in place. Trust is viewed differently.

We want you to understand that situations similar to this take place in churches across America every year, and yes, even weekly. The amounts vary significantly, but the results don’t.

While we can’t live each day under a cloud of suspicion, we do have a responsibility to “trust, but verify.” Take an opportunity to carefully consider each area of your financial processing, such as cash receipts, cash disbursements and payroll, and actively look for areas where something could go wrong. When you have identified the risks, you can create adequate controls to mitigate those risks and protect the church you have been called to serve.

Vonna Laue is a partner in the CPA firm of CapinCrouse LLP, Brea, CA. She is the co-author of Essential Guide to Church Finance. www.CapinCrouse.com

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By offering multiple giving options, churches take the hassle out of giving and pave the way for members to exercise greater generosity.

If you want to increase your church’s level of generosity, make giving easy. Remove the barriers that keep many people from blessing your church financially.

For Lakeside Church, Folsom, CA, it started seven years ago with an option for its members to set up ACH (automated clearing house) fund transfers through their banks. Their church contributions were debited automatically from their checking or savings accounts on a regular basis. But wanting to provide donors with more giving options, Lakeside took another step to making giving easy and accessible by using the services of FellowshipOne, a Web-based church management software that allows people to manage their online giving anytime, anywhere.

“The initial roll-out was slow and a little cumbersome, but has greatly improved,” says Mike Klockenbrink, chief operating officer. “Many people were skeptics at first and were worried, but today approximately 33 percent of all our giving is online.”

At Seacoast Church in Charleston, SC, there were only a handful of people donating online when the church introduced online giving in 2005. But the percentage has grown significantly since, says Glenn Wood, church administrator. “For 2011 we had some 20,000 individual contributions given online – that percentage was more than 32 percent.”

NewSpring, a multicampus church in South Carolina, boasts a similar experience. Katie Bailey, assistant for strategic giving, says “38 percent of our offering this year have been received online.”

NewSpring introduced online giving to its members in 2005 “to tear down a barrier for giving since people don’t typically carry cash and checks,” says Bailey. Recently, the church added more giving options through SecureGive kiosks and PayPal.

“Online giving works because most people use debit or credit cards to complete their transactions in their everyday life,” says Bailey. “Giving is no exception.”

Online giving also helps reduce hours spent counting and entering donations, which then helps eliminate data entry errors, adds Klockenbrink.
Another important benefit for churches is that giving is stabilized, says Nicole Vander Meulen, MinistryLINQ’s marketing and communications specialist. “A church is able to plan strategically, anticipate budget ebbs and flows and, ultimately, fuel its mission.”

Web-based online giving
Giving through a church website is safe and easy. But churches need to find a reputable database software provider to help them track ministry statistics such as contributions and membership, and ensure safe and efficient transactions. Churches will also need a merchant account provider that will take care of credit and debit cards processing.

Donors click on the “Online Giving” button on their church website and follow simple steps to create an account and set up giving schedules that fit their needs.

When choosing an online database system, Bailey says every church should make sure that whatever giving software they choose integrates well into their accounting software.

“Using tools that aren’t connected to your church management software leads to silos and disconnected data, causing donors to fall through the cracks,” says Steve Caton, Church Community Builder’s vice president for sales and marketing.

Online giving and online payments through the Church Community Builder software is a simple process – collecting only the necessary information, thus eliminating barriers to new givers and streamlining the process for regular givers. It allows the church to provide multiple giving options, such as ACH payment processing, credit/debit cards, and one-time or recurring gifts. Donors can control their own contribution strategy and schedules as well as gain real-time access to their giving commitments and year-to-date activity.

“Because a congregant can create and manage their own recurring contributions, the management workload for church staff is diminished as is the embarrassment for a donor if they must reduce or discontinue their recurring contributions as a result of financial hardship,” says Caton.

Ease and accessibility also are among the features of EasyDraft, a fully integrated system with reporting and refund capabilities. Steve Contino, chief operating officer, says EasyDraft uses a consultative approach when working with churches, “and we listen to them so we can suggest the products that we feel will work best for them.” Contributors can store multiple checking and credit card accounts so they can choose how they want to pay for different contribution types.

“No need for on-site IT staff, as we host the secure site, manage the site and support the church for free, allowing churches to serve while we handle all the processing,” says Contino. And when ministry leaders need assistance, Contino says they have access to friendly live agents.

To use the services of EasyDraft, churches will have to fill out a questionnaire and provide their logos, colors and payment options. Equipment is not needed for web-based solutions. A typical set-up cost is a one-time fee of $150 and includes free customer service for the life of the relationship.

If a church is interested in further increasing its revenue through online giving, it can choose a merchant account provider that offers a referral program. One example is Holy Processing, a subsidiary of Capital Merchant Solutions, Inc. (CMS). A church can sign up as a reseller, and for each business that signs up for a merchant account that is referred by the church, CMS will give the church 20 percent of the profit from the processing for each business. The church will also get an up-front referral fee.

“This extra money can be used to feed the hungry, provide clothing, provide shelter, build youth programs, build ministries and build churches,” says Jeremiah Davis, vice president of Holy Processing.

On-location giving
Online giving is a first step in a congregation’s digital giving plan, says Marty Baker, founder of SecureGive, a turnkey digital giving solution providing online, kiosk, iPad and mobile phone options. A common next step, adds Baker, is installing a giving kiosk. Baker says having a kiosk in the church property allows members who are prompted to donate while at church to give easily, enabling the church to receive donations throughout the week.

Baker is also the founding and lead pastor of Stevens Creek Church in Augusta, GA. When the church launched its SecureGive kiosk, Baker says the administrative team could not figure out why donations were coming in on Tuesdays. It turned out that a women’s small group was meeting at the church, and the kiosk provided them a way to make a donation during the week. “It is not uncommon for people to stop by the church during the week and make a donation at the giving kiosk,” says Baker. “When giving is convenient, people give more.”

Baker says churches that use kiosks have reported increases in excess of 40 percent of new donors to the church.

Another huge benefit of a giving kiosk, Baker adds, is the savings in bank fees. Because a SecureGive kiosk uses a retail merchant account (and not an e-commerce merchant account used by Web-based online giving service), it means people are physically swiping their bank card and keying in their PIN to complete the transaction. Baker says retail or card-present transactions will save the church money in processing fees.

Yet, when it comes to flexibility and multiple applications, Qgiv claims it’s the only kiosk that allows both donations and multi-event registrations on the same unit. For example, church members can make a donation, purchase tickets to an event or register for the latest bulletins in one transaction.

Todd Baylis, president of Qgiv, Inc., says Qgiv is the first complete tablet-based kiosk in the donation market. The kiosk head, he says, can be quickly disconnected for mobile and portable use, and is self-contained with an iPad card reader – enabling it to be used anywhere on location with internal battery power. The kiosk also includes 3G wireless, which means that payments can be processed anywhere. Baylis says churches have been able to use the kiosk at outdoor events, such as bake sales and picnics.

Qgiv provides flexible payment options so that churches can customize their donation preferences. But if a church is concerned about the use of credit cards, Baylis says the kiosk can be locked to ACH/eCheck only.

“Our technology establishes an ease of donating not provided by any other charitable donation company or website,” says Baylis. “By providing on-location, secure and card-ready options, Qgiv takes the hassle out of giving, paving the way for patrons to increase the frequency and oftentimes even the dollar amount of their gifts.”

Based on year-over-year transaction volume and metrics from a random sample of Qgiv’s faith-based clients, Baylis says statistics for January-August 2011 to January-August 2012 show a 34 percent increase in online donations.

Mobile giving solutions
While kiosk machines meet a need, often a big drawback is they can be expensive because of the cost of the hardware, and there are usually additional costs associated with these devices, says R. Wayne Steiger, president/CEO of FlowPay Corporation.

FlowPay is a payment-processing technology company that offers online, on-site and mobile giving solutions. It also provides on-site check conversion.

“There is no longer any excuse for a person not to give,” says Steiger. “You cannot say you forgot your checkbook or don’t have any cash, because you don’t need to have either; plus everyone today has a cell phone.”

Steiger says the mobile phone will become the primary means most people will use to give their tithes and offerings.

One of the biggest mistakes churches are making today, says Steiger, is that they are demanding people to give the way they want to receive instead of the way people pay. This holds especially true for those under the age of 30 – who, says Steigler, give the least or don’t give at all.

“If you offer a way for them to begin to give, and they give a bare minimum of $10 each week, the cumulative result at the end of the year is impacting,” says Steigler.

Getting churches mobile-ready to fully engage with today’s generation is the goal of Your Mobile Church. Its Mobile Wallet service enables churches to collect tithes and donations in any amount via text message. “We make it easy to connect with and collect from anyone who owns a cell phone anywhere, at any time,” says Dana Simons, CEO of Your Mobile Church.

Building a relationship with their donors and becoming a part of their “mobile routine” are benefits that Your Mobile Church provides to its clients, says Simons. She adds that not only can churches provide their members the option to donate in any amount; they can also integrate donating with a routine of regular text messages, a visit to the app to access a sermon or submit a prayer request, or simply an automated text message reminder to securely confirm a weekly tithe.

“Donors may receive an email or text message on their phone with a request to support a cause, and rather than going home, browsing the church’s website and entering their credit card information, they simply send a text message to make their donation,” Simons says.

And they can give from anywhere in the world, notes Jen DeLaPorte, chief of business development at iGivings, LLC. iGivings has designed a mobile app platform that allows users to give from their phones. “They can be in church, on a beach, in an airport, hospital, or they can even be at church without their wallets and still be able to give their tithes and offerings,” says DeLaPorte.

A great value to churches, adds DeLaPorte, is that the iGivings app can help build their community and feeling of connectedness that makes members want to be generous when the church body is in need.

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Before getting into online giving

• Plan merchant fees into your budget. Online giving is not free.
• Shop around for a merchant supplier. Fees can be negotiated.
• Develop a plan on how you are going to respond to questions and concerns from your contributors.
• Talk to other churches in your area that are doing online giving to get their perspective.

— Mike Klockenbrink, COO, Lakeside Church

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What to watch out for

Churches should be careful not to overpay for simple services. Shop around, start small and don’t get locked into a long contract. You can always change or add on services as needed.
— Jeremiah Davis, VP of Holy Processing, Capital Merchant Solutions, Inc.
In today’s busy society, the fewer steps or hoops churches ask their congregation to go through to give, the more likely they are to do so – and on a regular basis.
— Todd Baylis, president, Qgiv, Inc.
If a church were purchasing an online giving tool, it would be important to make sure that it integrates with mobile technology. The iGivings app connects with the merchant account the church already has in place to provide seamless integration and ease for not only the church member, but the church staff as well.
— Jen DeLaPorte, chief of business development, iGivings, LLC
When choosing an online giving solution, the product needs to be simple and secure. If the process is too complicated, people will not complete the transaction.
— Marty Baker, SecureGive founder
A church would not want a payment service provider who also provides payment services for adult websites, or provides payment services for illicit activities.
— R. Wayne Steiger, president/CEO, FlowPay Corporation
When shopping for an online giving tool be sure to look for a solution that offers options for donating from a phone, so each member of the congregation can give on-the-go.
— Dana Simons, Your Mobile Church CEO

Some lenders want a say in how the church is managed and organized.

Megachurches are usually defined as having 2,000 members or more, but when it comes to financing, a mega loan is defined as a loan amount of $5 million or greater regardless of church size.

When it comes to financing, there is a limited number of lenders who are willing to make church loans – for megachurches it is even tougher. Other issues to consider:

• Banks and credit unions are generally going to require that the megachurch move its banking relationship to them if they are providing the loan.
• A megachurch is expected to have financials that are at a minimum CPA-compiled.
• Any issues related to prior or current loan payments be addressed with a plausible solution.
• A megachurch should be able to explain declining membership or income trends.

Our firm once closed a $13-million loan for a megachurch in Philadelphia. They had been to every lender they could talk to and had been declined. The church was frustrated and looking for a solution when they found us.

Earlier, the church was working with a national bank’s religious lending department and the loan was close to being approved. The church told us that before the bank would issue a formal commitment, they wanted the church to change the structure of their board of trustees and their bylaws to conform to their standards.

The church was not happy about this request, but according to the bank this was not negotiable. The church came to us to get a loan, and about five months later they closed and the church broke ground on their new state-of-the-art sanctuary.

There are things churches could learn from this story: (1) Traditional bank lenders on large loans will often want to have a say in how the church is managed and who can make decisions. If this does not work for your church look for other options. (2) Just because you have been turned down for your loan does not mean that your loan cannot be done.

It is important to recognize that lenders make decisions based on many factors unrelated to the church and some of these are out of the control of the lender, for example:

Concentration issues – Many banks and credit unions have internal and external restrictions on how much money they can lend on a particular asset class. If the bank has reached its concentration on church loans, they simply are unable to make a loan.

Legal and internal lending limits – Legal lending limits on a single loan are set based on asset size of the institution. But, generally, banks and credit unions have their own internal policies that are more restrictive than those set by law, so even though they may legally be able to make a large loan, they may have internal policies that prohibit a large loan.

Reputation risk – The risk that a loan will go bad and that the lender will have to take back the property and there will be a long protracted battle, which will be in the local newspapers and other media. I once worked at a bank that had made a $3-million loan to a large church. The church never made a single payment.

This is called a first payment default and almost always means fraud. At the end of the day, the bank decided to write off the entire $3-million loan instead of foreclosing on the church because the bank was afraid it would be crucified in the media for going after a church.

Although it is still difficult for many churches to borrow the money they need, it is not impossible if they know where to go, are well-managed  and with a plan that makes sense.

John Berardino is president of Griffin Capital Funding in Fredericksburg, VA. www.churchloan.net