July 29, 2014

5 Best Practices for "Other Ministry Income"

Guidelines for dealing with money that's not a part of your regular salary.


Editor's Note: In his free ebook, The Minister's Salary, Thom Rainer addresses the issue of "other ministry income"—income ministers receive from services offered at weddings, funerals, revivals, speaking engagements, etc. While some minister's argue that such income is gift income and tax exempt, Rainer stresses that the IRS is clear: "this income is earned in the course of your work and is thus subject to taxation." He then goes on to offer the following best practices, which are based on conversations he's had with dozens of ministers.

Best Practice #1: It is okay to accept other ministry income. You have earned this income by conducting a funeral, officiating a wedding, or speaking somewhere beyond your church. You had to prepare extra work. You sometimes had to give up your weekends, particularly with weddings. It is one extra assignment to a schedule that is already busy.

Best Practice #2: It is generally advisable not to set fees. Leave the amount that you will receive to those you are serving. Sure, that means you will sometimes receive very little and other times receive nothing. But you are already receiving a salary from your church. Fee setting typically sends the wrong message.

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July 28, 2014

Monday Church Management Roundup: 7/28/14

Five trends, tips, ideas, and stats to help church leaders manage well this week.

1. Fill your ministry toolbox. Enter now to win more than $550 in church leader resources from Logos and Leadership Journal, including Logos 5, subscriptions to publications and websites, and more.

2. Megachurches skew younger than expected. In Not Who You Think They Are, Leadership Network's Warren Bird and Hartford Seminary's Scott Thumma provide demographics research on those who attend churches averaging 2,000 people or more in weekly attendance. While many believe megachurches are a "Baby Boomer" phenomenon (individuals born between 1946 and 1964), the researchers say not so: 62 percent are between the ages of 18 and 44, and 31 percent have never been married (compared to all churches, in which 35 percent are between 18 and 44 and 10 percent have never been married) ("Who Attends America's Megachurches?" by Warren Bird and Scott Thumma, leadnet.org).

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July 24, 2014

To Attach or Not to Attach?

Sending copyrighted content without permission is infringement.


Church leaders should recognize that the use of e-mail can lead to copyright infringement.

To illustrate, assume that Esther is a church employee who occasionally comes across articles and other items that she thinks would be of interest to others, and she downloads the material and attaches it to e-mail messages. If Esther downloads and sends copyrighted material by means of e-mail, she has committed copyright infringement by violating the copyright owners' exclusive right of reproduction.

Church staff should be warned (in writing, through an appropriate policy) not to transmit copyrighted material.

Adapted from the Essential Guide to Copyright Law for Churches. Copyright Christianity Today.

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July 23, 2014

Tax Guide Reminder: July

Don't forget this important date.


For expert help with all of your church's tax questions, check out the 2014 Church & Clergy Tax Guide.

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July 22, 2014

Is Your Facility Safe?

What OSHA can teach you about creating a safer church for staff, contracted workers, and the entire congregation.

The U.S. government's Occupational Safety and Health Act (OSHA) sets the standards for employee safety. The act's provisions are broad enough to cover almost any employer, including churches in certain circumstances.

OSHA applies to any business that affects interstate commerce. When do church activities qualify as a business that affects interstate commerce? Purely religious activities never do. For example, if your organist falls on the steps leading to your chancel, you will not have to worry about an OSHA citation.

On the other hand, if a church ventures beyond purely religious pursuits, it may be subject to OSHA requirements. Schools and daycare centers are clearly businesses, and are engaged in interstate-commerce because their books, supplies, and equipment can come from various parts of the country.

Churches that run an educational institution must ensure that the employees are not subjected to safety hazards and that their activities comply with OSHA standards. People who work in the church's bookstore would be entitled to similar protection. Moreover, administrative personnel, such as an office manager, are technically covered by OSHA.

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July 21, 2014

Monday Church Management Roundup: 7/21/14

Five trends, tips, ideas, and stats to help church leaders manage well this week.

1. Report all suspected abuse. "(N)ote that the fact that a minister is excused from the duty to report child abuse by the availability of the clergy-penitent privilege does not mean that clergy should not report such abuse. They are deemed "permissive" reporters of abuse under such circumstances, meaning that they face no criminal liability for not reporting abuse. But in most cases, clergy should report known or reasonably suspected cases of child abuse even if not legally required to do so. Not only will this contribute to a cessation of the abuse, but it will also protect the minister and his or her church from potential civil liability for not reporting" ("Clergy-Penitent Privilege Protects Pastors," by Richard R. Hammar, July/August 2014 Church Law & Tax Report, ChurchLawAndTax.com).

2. Take some tension out of pay discussions. "Managers need to have frank and open discussions with employees about pay. ... Here are three ways to make [those discussions] better:
  • Talk early and often. There should be no surprises when you sit down to talk about salary.
  • Do performance evaluations separately. Compensation and performance should be discussed separately, so the employee doesn't fixate on the money.
  • Provide context. When people are disappointed, it's often because they lack information. Share the big picture—how the company is performing and the range of raises being offered this year"
("How to Discuss Pay with Your Employees," by Amy Gallo, hbr.org). The 2014-2015 Compensation Handbook for Church Staff provides objective data derived from more than 3,500 churches nationwide on pay and benefits for 14 different positions.

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July 17, 2014

Church Cash Reserves: How Much Is Enough?

Determining the right amount of savings for your congregation

Q: How much should a church have in cash reserves?

A: There is no real right answer to that question. Some people suggest three to six months of operating expenses as a rule of thumb. And it's not a bad rule of thumb. For a church with significant long-term debt outstanding, I generally recommend that the church have at least one year's worth of debt payments in reserve. Such a "debt service reserve" can provide the church with critical breathing room in the event of an unexpected cost or revenue downturn. Without a debt service reserve, such an event could cause immediate default.

Adapted from the ChurchLawAndTax.com article "Four Good Questions for Churches about Cash Reserves."

The September issue of Church Finance Today will cover this topic in greater detail. To subscribe, click here.

July 15, 2014

Four Tips for Handling Zoning Issues

Minimize tension and avoid costly legal battles.


Jesus once talked about making friends with one's accusers on the way to court (Matt. 5:25–26). Today, he might tell a church to make friends with neighbors before meeting with the local zoning board.

That's because neighborhood residents and municipal officials often view local churches and nonprofit organizations as liabilities rather than assets to a community. Here, then, are four tips for minimizing the tension and avoiding long and costly legal battles:

  1. Meet with city officials and learn their perspective on zoning issues. File all necessary permits and paperwork, and anticipate objections. Talk with an attorney who understands zoning issues.
  2. Know your neighbors and spend time listening to their concerns. Let them know what your church's ministry is all about and how it adds value to their area.

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July 14, 2014

Monday Church Management Roundup: 7/14/14

Five trends, tips, ideas, and stats to help church leaders manage well this week.

1. Pay-related lawsuits on record-setting pace. The number of federal pay-related lawsuits will set a record again this year, following an all-time high 8,126 cases from April 1, 2013, to March 31, 2014. The number of actions filed under the Fair Labor Standards Act has risen steadily over the past 10 years. In 2004, 3,426 FLSA cases were brought against employers that were accused of not following overtime pay policies. Revised Labor Department rules, which make more white-collar workers eligible for overtime, will bring more cases. Employers will be wise to review pay practices and eligibility decisions ... checking with outside experts, if necessary, to determine if changes need to be made" ("Work Rules," June 6, 2014, Kiplinger Letter, Kiplinger.com). Review your church employee payroll classifications (the IRS is watching, as Church Finance Today notes), then review your church's pay and benefits packages for pastors and staff and compare them with more than 3,500 churches nationwide through the 2014-2015 Compensation Handbook for Church Staff.

2. Discover the power of introverts. "Various sources claim a range of 25 to 50 percent of the American population is introverted. ... When churches recruit for ministry roles, many emphasize extroverted gifts like 'high energy,' 'people person,' and 'outgoing.' We want quick-thinkers, fast-acters, polished communicators, high-energy handshakers, and outreachers. It's easy to see how to plug extroverts into people-oriented ministries, and to assume that introverts fit best in behind-the-scenes roles with little people contact and little obvious connection to ministry strategy and vision. Such tendencies show a fundamental misunderstanding of introversion and the gifts introverts can bring to a ministry. This is a serious and costly mistake. According to Susan Cain, author of Quiet: The Power of Introverts in a World that Can't Stop Talking, 'The best talker might have the best ideas, but she might not'" ("Confessions of a Ministry Introvert," by Amy Simpson, LeadershipJournal.net).

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July 10, 2014

Think Before You Post

Don't take what's not yours.


Prior to the Internet, churches that violated the copyright law usually did so in relative obscurity, with few being aware of the violation other than members of the congregation. The Internet has effectively eliminated this obscurity by broadcasting copyright violations to the world.

The present environment makes it more likely that copyright violations that occur in the course of a church's use of the Internet will be detected by copyright owners whose works have been infringed. As a result, church leaders should be especially careful in ensuring that a church's website, or other uses of the Internet, contains no material that might violate the copyright interests of others. Any defenses, such as fair use, should be strictly construed.

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