Family Money Matters: A Look at Christian Household Finances

What really matters in an economy is not what the media says, but what people’s personal wallets say. As part of the second annual “State of the Plate,” 750 Christian households provided an inside look into their income, employment, debt, and giving/tithing.

I'm conducting this research with Christianity Today International’s Church Finance Today and Leadership journal. Based on preliminary results of this research, I've found that the average Christian family, though directly impacted by the economy, remains committed to faithful and generous giving to their church and ministries as a major priority.

Here's a closer look at four findings:

1) Income: The majority of families have either lost ground or remained flat financially this past year. For many years, most families saw their income increase. This is no longer the case as more and more families that completed the survey personally felt the effects of the sluggish economy:

- 33 percent of households said their incomes went down this past year.
- 43 percent of households saw no increase in their income.
- Only 23 percent of households saw their income increase.

2) Jobs: The negative effects of the economy are being felt in people’s homes and church. Almost everyone knows someone who has been negatively impacted by the economy. This financial pain has been felt in people’s immediate families, and everyone is mindful of other families in their church who are facing financial and employment struggles, too:

- 97 percent knew someone in their church who had lost a job in the past 12 months.
- 42 percent indicated they know people in their church who had to move away to find work.
- 33 percent of families had someone in their household whose job was negatively impacted by the economy.
- 30 percent know people personally who have lost their homes.
- 26 percent personally know people who declared bankruptcy.

3) Debt: Many people are actively working to carry as little debt as possible. A growing number of families are working on eliminating or avoiding growing indebtedness. Mortgages, car payments, and unpaid credit card balances are the most common forms of debt:

- Only 17 percent of households are 100 percent debt-free and 29 percent have no debt beyond their mortgage.
- 64 percent have mortgage payments.
- 36 percent have car payments.
- 31 percent have unpaid credit card balances (beyond 30 days old).
- 18 percent have medical bills.
- 18 percent have student loans.
- 14 percent have home equity loans.
- 12 percent have personal/family loans.
- 6 percent have retail/electronic loans.
- 3 percent have investment debt.

When asked how much it would take to be debt-free (except for a mortgage):

- 20 percent would need $10,000 or less to pay off their debts.
- 21 percent would need $10,000 to $50,000 to pay off their debts.
- 20 percent would need $50,000 to $100,000 or more to pay off their debts.

4) Giving/Tithing: Many Christians make giving a priority in their lives. While most people only give 1 percent to 3 percent of their income to charitable/church/religious causes, survey participants indicated their households made it a priority to be faithful and generous givers:

- 23 percent give under 10 percent.
- 18 percent give 10 percent.
- 51 percent give 10 percent to 20 percent.
- 8 percent give over 20 percent.

Among those who give 10 percent or more of their income, this spiritual practice and discipline began in their younger years:

- 24 percent started giving 10 percent or more in their growing up years at home.
- 27 percent started in their 20’s.
- 17 percent started in their 30’s.
- 15 percent started in their 40’s or older.
- 16 percent have never practiced tithing.
- 7 percent started tithing but have stopped.

When asked about who helped shape their Biblical view of finances, generosity, and giving, respondents said:

When asked about giving “inside” the church walls, respondents said:

- 78 percent give offerings to their church 1 to 4 times per month.
- 22 percent give offerings sporadically to their church.
- 93 percent have supported church missions giving/projects.
- 80 percent have supported benevolence collections.
- 69 percent have supported a building fund project.
- 62 percent have supported special collections for pastors/staff.

When asked about giving “outside” of the church walls, people said:

- Missionaries/mission agencies, 61 percent
- Short-term mission trips for people they know, 46 percent
- Crisis/relief/development/disasters, 43 percent
- Unemployed family they know in their church, 33 percent
- Local civic/community/cultural/sports causes, 28 percent
- Christian radio/TV stations or programs, 26 percent
- Denomination, 26 percent
- Homeless/beggars, 24 percent
- Evangelism ministries, 24 percent
- Youth/college/military ministries, 24 percent
- Christian schools/colleges/seminaries, 22 percent
- Rescue missions, 22 percent
- Child/student/orphan sponsorships, 21 percent

When asked “how” people give, respondents said:

- Check, 90 percent
- Cash, 75 percent
- Donated clothing/household, 62 percent
- Credit/Debit card transaction, 33 percent
- Online Giving, 33 percent
- Electronic Check Transfer, 23 percent
- Donations included in Will/Trust/Estate, 10 percent
- Donated vehicle, 9 percent
- Donated stock, 7 percent
- Donated Gifts-in-kind/Inventory/Equipment, 6 percent

When asked about wills/trusts/estate plans:

- 35 percent have a will that is up-to-date.
- 29 percent have a will that needs to be updated.
- 37 percent do not have a written will or estate plan.
- The majority of people surveyed do not have estate plans that included any charitable/church giving.

NOTE: Individuals and churches can still participate in the second annual “2010 State of the Plate,” which offers a survey for church leaders and a survey for families. Survey participants will receive free electronic resources, access to the full results, and an executive summary outlining graphs, charts, benchmarks, and trends.

Watch in March for a full final report covering the "State of the Plate" findings.

New Law Permits 2009 Charitable Deduction for Haiti Relief Contributions

In an effort to encourage further charitable giving to help those affected by the earthquake in Haiti, Congress passed a bill on January 21 that permits donors to deduct (on their 2009 income tax returns) charitable contributions of cash made after January 11, 2010, and before March 1, 2010, for the relief of victims in areas affected by the earthquake. The President signed the bill immediately after it passed in both houses of Congress, giving effect to the new law. The new law does not apply to noncash contributions.

501c(3) organizations, including churches, that are accepting charitable contributions for the relief of earthquake victims must consider the implications of the new law in assisting their donors with proper documentation.

Federal tax law requires donors who make individual contributions of $250 or more to obtain proper written acknowledgments from the donee charities for such contributions. A proper written acknowledgment from a donee charity must include the name and address of the charity, the name and address of the donor, the date and amounts of the charitable contributions (either individually or in the aggregate), and an indication as to whether the donor received any goods or services in exchange for the contributions. If a donor receives goods or services in exchange for contributions, additional information is required.

Donors ordinarily must substantiate charitable contributions in individual amounts of less than $250 with either a "bank record" or a written communication from the donee showing the name of the donee organization, the date of the contribution, and the amount of the contribution. However, the new law allows a "telephone bill" to serve as adequate documentation for Haiti relief contributions, so long as it contains the name of the donee organization, the date of the contribution, and the amount of the contribution. This provision was adopted to facilitate contributions made by text messages.

In order to assist donors in applying the new law, we recommend that charitable organizations receiving earthquake-relief contributions after January 11, 2010, and before March 1, 2010, send proper written acknowledgments to donors as soon as possible after the end of February 2010. The written acknowledgment should clearly indicate that the gifts were made for the relief of the January 12 earthquake victims in Haiti and should also clearly indicate that the gifts were made after January 11, 2010, and before March 1, 2010. Charitable organizations should remember that donors may deduct such contributions on their 2009 income tax returns, or they may deduct them on their 2010 income tax returns. The charity is not required to determine which year the donor chooses to deduct the charitable contribution. Accordingly, the charity should include earthquake-relief contributions for Haiti given after January 11, 2010, and before March 1, 2010, in any subsequent written acknowledgment of a donor's cumulative contributions to the organization during 2010. It may be helpful to remind donors in early 2011 that they may not deduct in 2010 any contributions that were already deducted in 2009.

Example
Assume that a charitable organization accepts earthquake-relief contributions along with general contributions for the entire year 2010. Donor A makes a $500 earthquake-related contribution after January 11 but before March 1 of 2010, and makes an additional $1,000 earthquake-related contribution in March 2010. To assist the donor in availing himself of the provisions of the new law, the charity sends a proper written acknowledgment to the donor on March 10, 2010, indicating that the donor made a contribution in the amount of $500 after January 11 and before March 1 of 2010 for the benefit of earthquake victims in Haiti. When the charity sends Donor A an annual contribution acknowledgment after the end of 2010, the charity will include all contributions made by Donor A during the year 2010, including the one made in January and the one made in March of that year. The acknowledgment should clearly indicate that it includes all contributions made during the year.

The charity does not know whether Donor A will deduct his January 2010 contribution on his 2009 return or on his 2010 return. Donor A's decision in that regard is not relevant to the charity with respect to its process for acknowledging charitable contributions.

To learn more about how to file your 2009 tax return and for tax help throughout 2010, order Richard Hammar's 2010 Church & Clergy Tax Guide.

2010 Tax Tips for Church Leaders

Ministry Direct, a channel of AGTV, recently hosted a live, 50-minute video with Richard Hammar on the latest tax information that churches and ministers should know. See it below.

Video provided by AGTV. Used with permission.

To learn more about how to file your 2009 tax return and for tax help throughout 2010, order Richard Hammar's 2010 Church & Clergy Tax Guide.

Responding to Negative Coverage in the Media

Editor’s Note: On February 4, a local television station ran a story about Ed Young and Fellowship Church, the Grapevine, Texas, where he leads. The piece, citing anonymous former staff members, among others, suggests Young leads a lavish lifestyle. Young responded that same day through a post entitled “No Secrets,” on his blog, then addressed it from the pulpit on February 8.

Kevin Hendricks from ChurchMarketingSucks.com, the blog for the non-profit Center for Church Communication, took the opportunity to ask a bigger question—when a church faces negative coverage in the media, how should it respond? Below is an excerpt of the interview Hendricks did with Kem Meyer, the communications director at Granger Community Church in Indiana, and Kent Shaffer, the founder of Church Relevance (you can also read the full version):

If your church were attacked in the local media, how would you respond? We asked two Center for Church Communication board members, Kent Shaffer and Kem Meyer, to offer their perspective:

Kem Meyer

When faced with criticism and accusations, it’s a fine response line between too little (e.g., ignore it, act like it’s not there) and too much (e.g., hijack the home page, defensively counterpoint every single point). Every circumstance needs to be looked at individually, no two situations are exactly the same. There are a lot of variables at play; proximity, topic, source, etc. And each of these variables needs to be considered and weighed appropriately. But regardless of how any of that shakes out, here are a couple of bullets that apply to every situation:

Full disclosure is always the best policy. When there is nothing to hide, a direct answer to a direct question is the way to go. The goal isn’t to get agreement on the answer, but to answer the question unapologetically. It reinforces the message “there is no cover-up here. It is what it is.” In this case, it would be great for someone to stand up and say “Yes, we own a plane, and this is why we own the plane, and this is how we pay for it, yada yada…” Without information—people just make up their own truth. And then they start to believe it.

It’s important to listen to the chatter. If there were a report about my senior pastor, I would make sure we watched the report—in full—as a senior management team. It’s responsible to listen to what people are saying in public spaces about your church and leaders. It’s not a self-centered, off-mission indulgence, but a window to the full picture. What we learn when we listen—good and bad—is the only way to discover the full picture about public perception (which is their reality). Sometimes we discover that the picture we’re drawing isn’t telling the story we think it is and we get a chance to course correct. We still are in control of which audiences we respond to and which to absorb, but without looking through that window—we risk making decisions on incomplete or inaccurate information about ourselves.

Kent Shaffer

In sports there is an expression, "you have to be good enough to beat the referee." You have to be above reproach and go the extra mile to avoid the appearance of foul play. Both in sports and the limelight, people's perceptions often trump the reality of a star's actions and motives.

People are funny when it comes to religion and money ... sadly, because of religion's long history of financial abuse. Depending on your culture, theology and lifestyle, lavishness in the church may be an abomination or a way to show respect to God and one's pastor.

I recommend that churches, particularly influential ones, strive to be above reproach.
Avoid letting your financial behavior become a stumbling block that turns some people off to Christ. Join the Evangelical Council for Financial Accountability. Have personal accountability partners. Give generously and then give some more.

If you church does come under fire for perceived financial irresponsibility, address it immediately, honestly and humbly. Seek council, and if you did do wrong, publicly apologize and commit to correct the wrongs (much like Toyota is doing with their recalls). Don't ignore the media or you will likely appear guilty even though that may be far, far from the truth. Old school public relations would ignore bad publicity or just shout louder, but in today's wired world where almost anyone can have a platform (i.e., Twitter, blogs, Facebook, etc.), the best solution is to authentically engage your accusers through meaningful conversations online and offline.

Public relations that engages people doesn't make the problem disappear or get everyone to think just like you. But it is real, honest and undeniable, and most importantly, it causes people to respect you (even if they hate you). It is not easy. And there is no perfect formula to follow. But to some degree you should be putting forth effort for a few weeks via multiple channels to share the truth from your side of the story.

Church Finances Remain Pinched in Early 2010

A “new normal” is emerging in the church world when it comes to giving, budgets, and generosity initiatives, according to an ongoing survey conducted by Maximum Generosity and Christianity Today International’s Church Finance Today and Leadership journal.

Nearly 800 churches have responded so far to the second annual “State of the Plate.”

Five major developments are emerging from the survey, which asks church leaders and pastors to report on how their giving efforts concluded in 2009 and began in 2010:

1) The poor economy is hurting a growing number of churches. While the headlines may say the economy is improving, its impact hasn’t shown up yet in the offering plate:

- The number of churches reporting a decline in giving this past year has increased to nearly 36 percent of churches surveyed, compared to 29 percent at the same time a year ago.

- Only 38 percent of churches saw giving increase this past year, compared to 47 percent a year ago.

2) Many churches say December year-end giving fell short. While Rick Warren’s December appeal to more than 100,000 e-mail recipients helped his church adequately close the gap on a year-end budget shortfall, many other churches weren’t so fortunate. In the “State of the Plate,” 30 percent of churches surveyed said that their December year-end giving “missed” their expectations. Only 24 percent of churches indicated that year-end giving surpassed their expectation. With nearly a third missing expectations at the end of 2009, many churches likely entered 2010 looking for ways to slow their church spending.

3) Some churches say budgets grew. While a growing number of church budgets are being trimmed, others increased theirs heading into 2010:

- In the survey, 32 percent said they made budgets cuts of 1 percent to 20 percent. A year ago, only 14 percent said the same. The top three cuts came in the areas of travel and conferences, ministry programs, and expansion/renovation projects.
- 24 percent of churches kept their budgets the same as last year.
- But surprisingly, 45 percent of churches increased their budgets for the coming year, compared to 23 percent who said the same a year ago. Churches that increased their budgets did so primarily in the areas of benevolence giving, ministry programs, and missions giving.

4) More churches plan to preach and teach on finances. The Bible provides more than 2,000 verses on finances and generosity and a growing number of churches say they are planning or considering to share God’s Word on these subjects in the following ways:

- Preaching, 75 percent
- Financial classes/courses/groups, 66 percent
- Sharing a Bible verse during the offering, 63 percent
- Pamphlets, 52 percent
- Making financial counselors available, 49 percent
- Running an annual stewardship drive, 48 percent
- Videos in the worship service, 46 percent
- Giving families a generosity devotional, 45 percent
- Estate planning materials/seminars, 44 percent
- Stewardship training for leaders, 40 percent

Regarding e-giving options, 36 percent of churches say they offer this already, and another 29 percent say they’re considering it or seeking additional information about it.

5) More churches want outside guidance. More churches say they’re seeking outside resources to help with church finances, giving, and generosity. The top resources identified by respondents:

- Dave Ramsey, 58 percent
- Crown Financial Ministries, 57 percent
- Maximum Generosity, 47 percent
- Denominational resources, 44 percent
- Church Law & Tax Report, 38 percent
- Your Church magazine, 34 percent

Churches can still participate in the second annual “State of the Plate.” Participants will receive free electronic resources, access to the full results, and an executive summary outlining graphs, charts, benchmarks, and trends.

Watch in March for a full final report covering the "State of the Plate" findings.

Oregon Case Provides a Powerful Reminder to Churches

Editor's Note: On March 5, 2010, this post was corrected to show the trial court originally ruled in favor of the pastor, and this ruling was recently affirmed on appeal. The correct version appears in full below:

Last week, an Oregon appeals court issued an important ruling involving a pastor’s efforts to sue his denomination and two denominational officials for defamation. Church leaders should take note because appellate decisions become reference points for future cases heard around the country.

The court found that the First Amendment guaranty of religious freedom did not prevent a dismissed pastor from suing church officials for defamation as a result of statements they shared with the congregation (read more about the ruling in The Oregonian).

First, some background. The pastor was asked by denominational officials to accept a call at a small church. After expressing concern that the church would not be able to adequately compensate him, the officials agreed to supplement his salary and sent the church a check in the amount of $3,000 for this purpose. The officials made clear that the supplemental payment was a gift, and did not have to be repaid by the pastor.

A short time later the pastor asked the church board to authorize a check to him in the amount of $3,000 from the church’s bank account. He explained that these funds had been deposited by denominational officials for his benefit, and did not have to be repaid. The church board accepted this explanation, and issued the pastor a check for $3,000. A few months later, denominational officials informed the pastor that he was being charged with misappropriation of funds for the $3,000 withdrawal. This was based on their understanding that their $3,000 payment to the church was to assist the church in meeting its salary commitment to the pastor, and was not intended to be over and above the compensation that the pastor received from the church.

The pastor voluntarily resigned his position at the church. Soon after he left, denominational officials drafted a letter that was read to the church congregation. The letter stated that “there had been a financial misappropriation by the former pastor.” In a subsequent email, a denominational official stated that the pastor had demonstrated a willingness to “lie and steal.”

The pastor, upon learning of these communications, sued the denominational officials who made them, and his national church, for defamation. A jury ruled in favor of the pastor, and awarded him monetary damages. The defendants appealed. The appeals court agreed that the civil courts cannot resolve lawsuits involving matters of discipline, faith, internal organization, or ecclesiastical rule. But, it insisted that the First Amendment did not bar all claims against churches.

The court applied a three-part test in deciding if the courts can resolve a defamation claim against a church. First, if the organization is religious in nature; second, if the allegedly defamatory statements relate to the organization’s religious beliefs; and third, if the statements can only be regarded as religious and were not made for a secular purpose, then the statements are purely religious as a matter of law and the First Amendment bars a defamation claim.

On the other hand, if the allegedly defamatory statements, although made by a religious organization, do not concern the religious beliefs and practices of the religious organization, or are made for a nonreligious purpose, then the First Amendment does not necessarily prevent resolution of the defamation claim. The court concluded that the statements by the denominational officials accusing the pastor of theft and lying were not unequivocally religious in nature and therefore the pastor’s defamation claim was not barred by the First Amendment.

Let me make four very important observations about this ruling.

First, the court acknowledged that statements pertaining to matters of church discipline, faith, polity, or ecclesiastical rule can never be reviewed by the civil courts. So, for example, no civil court could resolve a defamation claim based on statements accusing a pastor of doctrinal heresy.

Second, the court acknowledged that truth is an absolute defense to defamation. Church officials who make statements about a former pastor that are true generally cannot be liable on the basis of defamation.

Third, the court acknowledged that the statements made by the denominational officials may be protected by a qualified privilege if made to church members about a matter of mutual concern. The court conceded that employers have a legitimate interest in free communications on work-related matters, especially when reporting actual or suspected wrongdoing. It cited a previous case in which communications between church officials about charges that led to the dismissal of a former missionary concerned a subject of common concern and were subject to a qualified privilege. However, a qualified privilege will be lost if it is abused. This can occur if the person making an allegedly defamatory statement did not believe the statement was true, or lacked reasonable grounds for believing it was true, or if the statement was made for a purpose outside the scope of the privilege.

Fourth, it should be noted that the pastor in this case had voluntarily resigned from the church prior to the statements about him being made. So, the alleged defamation did not take place in the context of a pastoral termination. The court acknowledged that the First Amendment generally prohibits pastors from suing a church for defamation as a result of statements made in the context of their termination or dismissal.

This case suggests that church leaders should be careful about making statements to the congregation concerning a former employee, especially if those statements could be viewed as defamatory. It would be advisable to enlist the assistance of an attorney in drafting a statement, and ensure that the statement is only communicated to church members.

Because of this case's potentially far-reaching implications, I'll be following it in the weeks ahead. Watch for an in-depth report in an upcoming issue of Church Law & Tax Report.

California Church Reeling from Shooter Incident

On Sunday morning, a gunman walked into New Gethsemane Church of God in Christ in Richmond, California. Flanked by two hooded companions, the three men scanned the pews, possibly searching for specific targets. Church members attempted to approach the men to ask them to remove their hoods, but before they reached them, one man began firing into the pews. The five shots made a popping sound, according to witnesses. Caught in the fire was a 14-year-old, who was hit in the shoulder, and a 19-year-old, who was struck in the leg. Both were hospitalized and are expected to survive.

Although the shooter acted too quickly for church members to respond, they correctly identified that these men posed a potential threat to the congregation. A free article on our sister site, ChurchSafety.com, outlines a basic strategy for recognizing and dealing with dangerous people.

One tip: Be alert to bizarre behavior. For example, a person who is sweating profusely, not engaged in the service, or appears uneasy may indicate that this individual is thinking about—ready to engage in—unlawful activity. It's important to be alert for dangerous behavior during any activity held on church property. This includes time before, during, and after worship (especially in crowds of people), at special events such as weddings, and during evening hours.

Although violence at churches appears on the rise (our sister publication Christianity Today covered this trend in its October 2009 issue, providing specific statistics that show this increase here), a separate chart by Christianity Today shows the odds of dying in a church shooting are 1 in 18.4 million. Still, church leaders need to know how to respond to a shooter. The following resources may help:

• “Confronting Gun Violence at Church” and “Creating a Safety Team”—two downloadable resources to help churches prepare for the unthinkable.

• “Violence in the Church”—a free article on ChurchSafety.com by Brotherhood Mutual Insurance Company.

• “Shooter in the Church”—an article from our sister publication, Leadership journal, offering tips from a veteran police officer.

Stetzer: Churches Struggle with Fostering Young Leaders

Recently, LifeWay Research surveyed pastors about the church's leadership development and mission. We asked them to rate their agreement in the following three areas:

1) Investing in leaders through the church

The survey asked pastors to respond to this statement: "I am intentionally investing in leaders who will emerge over the next ten years."

Pastors strongly believe they are doing just that—67 percent strongly agreed and 26 percent somewhat agreed. Wow! That's 93 percent who are convinced that they are investing in emerging leaders. They also affirmed that the church has a responsibility to develop future leaders.

But when asked to evaluate how well the church is accomplishing the task of leadership development, most agreed, but not nearly as enthusiastically. We posed this statement: "The church does a good job fostering and developing new leaders." This time 26 percent strongly agreed and 52 percent somewhat agreed, a drop in overall agreement of 15 percent. In addition, a significant amount of disagreement starts to appear—21 percent either somewhat or strongly disagreed with the statement.

While pastors believe that the church is a place where leaders need to be developed and they see themselves investing in this task, they generally recognize a real deficit in the church's effectiveness in accomplishing it. Although efforts are being made, pastors are not confident that the church is nurturing and growing new leaders adequately.

This article first appeared in our sister publication Leadership journal. Continue reading "Good News, Bad News in Raising Leaders," on LeadershipJournal.net, where the full version appears for free.

6 Trends in 2010 for Grants

If your congregation plans to seek grant funding for programs in 2010, keep in mind that the grants picture has changed quite a bit in the past 12 months due to the economic downturn. As I research local (Minneapolis-St. Paul) and national funders for several clients, and talk to a variety of churches and ministries about their grant-seeking efforts, I notice the following developments. They are worth noting in the weeks and months ahead:

Grantmakers generally have less money to give. Due to the downturn in the stock market, and reduced corporate profits during the past year, available funds are down. Funders are handling this in several different ways. Some are not making grants to any new organizations, which means if you don't already have a relationship with the funder, 2010 will not be a good year to try. Others are cutting the size of their grants. I occasionally encounter one organization that plans to stop making grants altogether for the coming year. So, when you call or e-mail a funder about applying for a grant, it will be important to ask, "Will you be making grants to any new organizations this year?"

It is important to frequently check funder websites. A number of funders have changed their guidelines and focus areas, sometimes without much notice. The foundation that looked like a perfect fit for your after-school program six months ago may have changed its focus to programs providing food and shelter. A few months ago, one foundation that I monitor abruptly changed its focus areas over a weekend, taking everyone (including the foundation staff) by surprise!

Funders are more focused now on meeting basic needs and on helping people who are unemployed. I have seen a general shift, particularly with corporate funders, toward funding programs for the hungry and homeless, workforce training, and assistance for displaced workers. This may be good news for churches and faith-based organizations, since they play such a major role in meeting basic needs in many communities. If your congregation has a food shelf, feeding program, or homeless shelter on site, or you are providing employment training of some type, there actually may be more grant-funding available for your work.

Funders are more focused on the education of children and youth. I have also watched a number of funders shift toward a focus on early childhood education and improving high school graduation rates. This may or may not mean that there is more funding available to your church, even if you sponsor educational programs for youth.

Some funders are focused on improving public schools; for example, several large national foundations are now making grants for teacher training, curriculum enhancement, and computer technology, so they likely wouldn't fund a program at your church. Some funders take a different approach, supporting after-school programs focused on academics, so they might fund a program at your church.

Early childhood education dollars are sometimes going directly to preschools or day cares, a promising opportunity if your congregation sponsors programs like these. But some funders are supporting broader initiatives to improve the overall field of early education or to help bring policy changes at the state and federal levels, which probably are not good fits for an individual congregation. The bottom line with these types of grants: Read the fine print in foundation and corporate funding guidelines. The funder usually will spell out exactly what it means by "Enhancing Educational Achievement," so pay attention to the details.

Preparing a strong proposal is more important than ever. It's always important to write a high-quality proposal, but it's absolutely critical now with more organizations competing for fewer dollars. If your proposal is incomplete, doesn't fit with the funder's guidelines, or is unclear in places, you may not get a chance to improve it to clarify what you really meant. Funders "weed out" more proposals because of the reduced pool of grant dollars. Make sure yours doesn't get eliminated because of the mistakes mentioned above.

It's always a smart time to learn how to write a grant. If your congregation is new to grant-seeking, it's a great time to learn about researching and writing grant proposals. Eventually, funders will have more money to give again, and your church will have developed new skills that may help you access new resources for ministry.

How One Question Can Make the Recession an Ally

During this season of economic turmoil and ambiguity, one question may have the power to bring clarity—and better priority-setting—for the churches where executive pastors, business administrators, and pastors serve.

That question: What exactly are we trying to accomplish?

David Fletcher, the executive pastor of The Chapel in Akron, Ohio, and a Your Church contributing editor, shared the question last week at his annual XPastor.org conference in Dallas, where about 125 people gathered.

The concept, dubbed “Question Zero,” comes from the Harvard Business School. Fletcher said the timing couldn’t be better for churches to use it. In good times, church leaders usually ask how to make a program or event bigger and better, or how to create the next big thing. But this often results in a focus on “the number of cups of coffee served, rather than the number of people who come back for a second cup,” he told participants.

“We get confused when we try to cater to people,” he said. “We lose track of our mission … How are lives being changed?”

Now, with the hardest economic environment to hit the United States since the Great Depression, church leaders have an opportunity to establish a better focus. “You want the recession to help your church,” Fletcher said.

By asking, “What exactly are we trying to accomplish?” to staff members in any area of ministry, those staff members are forced to state the purpose of an idea or program (new or existing), and their specifically desired outcomes. If they can’t do this, then it’s a sign the idea or program needs further development—or perhaps shouldn’t be done at all. If they can, then it empowers decision-makers to understand how to prioritize the idea or program.

Either way, asking Question Zero helps ensure that scarce time, energy, and resources get used in the best possible ways, Fletcher said.

Asking the question sounds simple, but Fletcher conceded it isn’t easy. Church leaders should try it out on a small scale before working to implement it across the organization, he said.

After joining The Chapel last year, he used Question Zero with the church’s website, only to learn most of the congregation viewed the site as outdated, unhelpful, and as one respondent put it, “a site Jesus wouldn’t die for. More damaging than porn.” Fletcher worked with a small team to update, renovate, and relaunch the site within 60 days, using Question Zero to guide their work.

“Make sure you have a success. Run off of a success first,” Fletcher said. “Give people something tangible.”

The website success immediately translated into a larger evaluation of the church’s communications department and its $581,000 annual budget. The unfolding result: A unified communications theme delivered through multiple mediums while reducing unnecessary costs.

One of those cost savings emerged with the outside print shop used by The Chapel. It cost $45,000 annually, but by using Question Zero, the church found a higher quality option (two-sided, four-color bulletins, rather than one-sided, two-color bulletins, for instance) from a different shop in town that costs less.

As Question Zero helps The Chapel's leaders evaluate other aspects of ministry, it has brought other cost-saving opportunities to light. For instance, the church is re-evaluating whether its $139,000 food services operation fits into its core ministry.

“The recession is a great opportunity to pause, take a step back, and use this pressure to trim our costs,” Fletcher said.

Struggling Cities Eye Taxes, Fees for Churches

Like countless other municipalities throughout the country, Fort Wayne, Indiana, is struggling to find ways to bridge the gap between declining tax revenue and the costs of maintaining infrastructure and services.

What makes Fort Wayne stand out is the city’s mayor, Tom Henry. Henry is leading the charge for the Urban Mayor’s Caucus of Indiana to tax nonprofit and church-affiliated ministries to help solve his region’s revenue shortfall.

Nearly every town in America is feeling the strain of the economic crisis. As a result, while becoming a 501©3 is a relatively simple process, maintaining a completely tax-exempt status may become increasingly difficult for churches.

Salt Lake County officials in Utah recently considered a proposal to charge businesses, homeowners, organizations, and churches with a “police protection fee” to help cover the costs of a new Unified Police Department. In Ohio, the state’s supreme court recently rejected an appeal to a ruling subjecting a denomination’s administrative offices to property taxes.

As local governments desperately seek ways to cover budget deficits, the debate about taxing nonprofits and churches will only heat up, says Dan Busby, president of the Evangelical Council for Financial Accountability and an Editorial Advisor for Your Church.

“With federal, state, and local budgetary shortfalls in abundance, we should expect to see increasing pressure on churches and other charities to help bridge the funding gap,” Busby says. “For example, a proposal was recently made and defeated in New Jersey to tax charities $100 per employee per year. Encroachment on property tax exemptions will likely be an area where government will become the most aggressive.”

Busby’s advice: “Churches and charities should be proactive in sharing the good they are accomplishing in the community.”

Paula Hughes, a county council representative in Fort Wayne, recently made a similar case in response to Henry’s effort. In a recent editorial for Fort Wayne’s Journal Gazette, Hughes, who likely will try to unseat Henry in the 2011 mayoral primary, voiced her strong opposition to Henry’s proposal.

“It is shortsighted and bad policy to think of taxing the entities that provide the services governments cannot and will not effectively provide,” Hughes says. “These services aren’t just nice for the community; they are basic and vital.”

She continues: “As jobs have become scarce and many people who once felt secure in their employment and finances find themselves out of work, not for weeks, but for months, it is our area’s nonprofits that have stepped up to help despite severe cuts in funding from their members, donors, and state and national governments.”