TheYourChurchBlog.com's Top 5 Posts of 2010

Last week, we took a moment to highlight the Top 10 most-read articles from Your Church magazine's website, YourChurch.net. As we continue to count down the days to 2011, we now offer the Top 5 most-read posts from TheYourChurchBlog.com during 2010:

5. Should Pastors Know What People Give? This post--which generated a high number of comments--raised the question based on how three different churches say they address it.

4. A New Tool for Calculating Church Staff Salaries. Personnel expenses make up a significant portion of church budgets--sometimes 50 percent or more. As a companion tool to our 2010-2011 Compensation Handbook for Church Staff, we developed a free worksheet that actually walks church leaders through the process of determining a fair pay range for each pastoral and staff position at their churches.

3. Dealing with Sex Offenders Who Attend Church. A reader-submitted question to our sister site ChurchSafety.com highlights a delicate, and sometimes painful, issue that church leaders must face: How to minister to people with varying backgrounds, including sex offenses, while protecting congregants (Editor's Note: see more about this issue here and here).

2. Oregon Case Provides a Powerful Reminder to Churches. An Oregon appeals 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.

1. Case Threatens Pastor Housing Allowances. A California lawsuit filed by the Freedom from Religion Foundation Inc. is allowed to proceed. It challenges the constitutionality of tax benefits associated with housing allowances provided by churches to their pastors.

10 to Remember From 2010

As 2010 comes to a close, it’s time to get all nostalgic and look back at the year that was. That includes reviewing the articles that interested readers throughout the year. Based on Internet traffic patterns, these 10 articles from YourChurch.net (Your Church Today magazine’s website) led the way:

10. Is My Church Covered? We noticed many church leaders seemed to be taking a hard look at their church insurance policies, their premiums, and any possible savings they could make in light of tightened budgets. Our Summer 2010 cover story reviewed the changing landscape of church insurance, including key coverage changes to note, terms to know, and a brief look at the biggest church insurance providers.

9. State of the Plate Results A detailed look at the results from the 2010 State of the Plate survey, which Christianity Today International conducted with Maximum Generosity to see how 2009 ended for American churches. Among the findings: More churches missed their budgets in 2009 compared to 2008.

8. Debunking the Clergification Myth Respected author and researcher Ed Stetzer examines the prevailing models of church staffing structures and argues for changes that place less emphasis on paid staff and more emphasis on an empowered lay leadership base.

7. Why the Church Library is Still Relevant With iPads, Nooks, and Kindles preoccupying much of the culture’s attention these days, it’s easy to forget that a church library remains relevant as a ministry to congregations, especially in tight economic times. Here’s more on how to start and establish an effective one.

6. What’s Changing—and What’s Not The Leadership Network’s Dave Travis shares several trends—or lack of trends—from larger churches, and what that means for churches of all sizes.

5. Four Policy Mistakes Churches Make As a part of our Summer 2010 issue’s package on “Protecting Church Leaders from Porn,” this article forewarns church leaders about four computer-policy practices that often lead to problems.

4. A Closer Look at “Lean” Church Staffs A joint survey conducted by Christianity Today International and Leadership Network identifies some helpful patterns and practices at churches where less than 35 percent of budgets are spent on personnel (the typical percentage for many American churches is about 50 percent).

3. ’Tis the Tax Season What church leaders needed to know before filing their 2009 returns (find out the same again this year for 2010 returns in the January/February issue of Church Law & Tax Report).

2. Preaching about Homosexuality How Obama’s 2009 Hate Crimes Act does—and doesn’t—affect the way pastors can preach about homosexuality.

1. Racing the FCC Mic Deadline Churches, businesses, and other organizations that used wireless microphones operating in the 700 MHz band (698-806 MHz) had to stop by June 12, according to a decision by the Federal Communications Commission.

7 Reasons Churches Should Offer Electronic Giving Options

For many years, churches pondered (and even debated) whether to collect offerings by placing a box in the back of the sanctuary or by passing the plate. Today there is a much more important issue that is transforming how people give and how churches collect offerings: various forms of electronic giving, such as websites, mobile devices, electronic funds transfer, and more.

To dramatically illustrate my point, consider what would happen if you went up to the average 28-year-old and asked that person to write you a check for something. In most cases, he or she would look at your strangely and say something like, “Checks? Ahhh, I don’t use checks.” But the truth is, whether someone is 28, 38, 58, or 78, fewer people are using checks and instead are using various forms of electronic options for all of their financial and giving transactions.

So, let’s take a look at the top 7 reasons your church must offer (more) electronic giving options:

1. Scripture instructs ministers to “collect” people’s offerings. When I have been in other countries, I have sometimes seen churches use VERY LARGE offering baskets (as big as waste paper baskets!) to collect people’s offerings. People were taught to “give from what they had,” which often included eggs, bread, rice, money, and so on. The baskets had to be large enough to hold everything people brought. In some cases, I saw churches that built “tithe houses” so people could bring the best portion of their harvest to the church.

The biblical mandate is that ministers “collect” people’s offerings and churches and ministers need to use whatever methods are available and most helpful to empower their people to be faithful and generous givers.

2.Some of your people do not use checks at all. Or, many will not have a check with them in the service. When you limit giving options to checks or cash, those without checks either will give nothing or will only put in a small amount of cash since they don’t carry much cash and mainly use debit cards, credit cards, smart phone apps, and online transactions to handle their finances.

3. Each weekend, 25 percent to 30 percent of the people who regularly attend your church are gone. If you have a church of 100 people, your average weekly church service attendance is probably 70 to 75 people. In a church family of 1,000 people, you likely have 700 to 750 attending on Sunday. Sickness, family commitments, sports, vacations, out-of-town trips, and other reasons will keep many people away from church each Sunday. Most people that miss a church service also will miss giving because the church has limited their giving opportunity to just a few minutes during a worship service. While some people will give more the next time they are in the service, most people will not.

4. Each weekend, 10 percent to 15 percent of your people will be in the building but will not make it to the worship service. Many people that serve in the nursery or a Sunday school class often miss going to a worship service on the weekends when they serve. There are a number of people who will only be able to get to church for one hour, and will choose to attend their Sunday school class rather than the worship service. When you limit giving to only happen in a worship service, many of these people will not give at all.

5. Electronic giving is a growing trend that will not go away. Church leaders must respond in a positive and appropriate way. Technology donation companies are finding more and more churches and nonprofits are turning to them to help fulfill their desire to offer electronic giving options. As a growing number of people depend on electronic giving to manage their finances, churches must come along side their people to help them be faithful and generous givers. Electronic giving is here to stay and it is growing. While ministering in a church in Australia, I found out from the pastor that more than 90 percent of people’s giving was done electronically (online, electronic funds transfers, and through giving “cards” in the pews that allowed people to give by debit or credit card).

6. Electronic giving helps you easily connect for special offerings. In every church, there are monies collected for a variety of things beyond the general weekend offerings, including building projects, benevolence giving, missions projects, missions trips, Christmas offerings, year-end offerings, pastor and staff love offerings, and more. When you have electronic giving available, a simple e-mail with a "Click here to donate" link is all you need to encourage generosity that will generate significant extra gifts in your church family. Without electronic giving, you're confined to collecting an offering in the church services and sending out time-consuming and expensive mailings.

7.Churches in America are in the midst of the worst economic downturn in our lifetime. In the annual STATEofthePLATE.info research we conduct in partnership with Christianity Today International, we are in the midst of a 2-year, double-digit percentage decline in church giving--something we've never experienced in our lifetime. Nearly 40 percent of churches last year saw their giving decrease from the year before.

I believe that scarcity brings clarity. We are now at a time when we need to teach God’s Word on finances and generosity and create as many ways as possible for people to be faithful and generous givers to God’s work. This will mean offering more electronic ways for people to give 24/7/365.

Evaluating E-giving Options

When working with any company that can provide electronic giving options for your people, you want to make sure they can offer you:

o Online giving (one-time, recurring).
o Electronic funds transfers (where people sign up to have their offerings withdrawn weekly, bi-weekly, or monthly) from one of their financial accounts.
o Debit and/or credit card giving options (some churches prefer to only use debit cards).
o PDA/iPhone/Blackberry/Cell/Smart phone applications.
o Facebook fan page donations.
o The ability to collect and process debit/credit card information on a mail-in offering envelope, sanctuary offering envelope, or registration form for a retreat, conference, event, and so on.
o Note: While there are some small fees associated with processing electronic giving, the amount you gain will be far, far, far greater than any costs incurred.

In closing, if you are collecting offerings by passing the plate and/or by having a box in the back, don’t stop doing this! With electronic giving, you are adding to what you are currently doing. This provides people with a variety of workable options for them to be faithful and generous givers to the Lord’s work.

Deadline Nears for Pastors' Housing Designations

Churches must designate a portion of each minister's compensation as a housing allowance by December 31 in order for ministers who own or rent their homes to receive the full benefit of a housing allowance exclusion for calendar year 2011. The designation should be adopted during a regular or special meeting of the church board, and should be contained in the written minutes of the meeting.

Churches should designate a parsonage allowance for any minister who lives in a parsonage and who is expected to pay some of the expenses of maintaining the parsonage (e.g., utilities, furnishings, repairs, improvements, yard care). For sample housing and parsonage allowance resolutions, see chapter 6 in the 2011 Church and Clergy Tax Guide, available for January shipment.

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Is Your Church Ready for Tax Season?

In an upcoming issue of the Church Finance Today newsletter, senior editor Richard Hammar relays a comment made by Douglas Shulman, U.S. Commissioner for Internal Revenue, during a speech given earlier this fall to the American Institute of CPAs: “The sheer girth and complexity of the tax code continue to grow, in spite of efforts to simplify it. There have been an astonishing 4,400 legislative changes to the code from 2000 to September of this year.”

Every year, Rich combs through pages of tax code looking for changes that directly affect churches and clergy. It’s a massive undertaking, but one that thousands of church leaders across the country appreciate, given the “sheer girth and complexity of the tax code” as Shulman puts it. For instance, how would any of us know about the 64 significant changes or additions that church leaders should note for the tax filing season upon us?

Rich highlights these changes in greater detail for our January/February issue of Church Law & Tax Report. But let me also encourage you to pre-order Rich’s 2011 Church & Clergy Tax Guide, the tangible fruit of his yearlong labor. This exhaustive book not only will guide you during tax season, but it also will serve as a trustworthy resource to reference time and again throughout the year.

Giving at Churches—How Will 2010 End?

Our friends at the Evangelical Council for Financial Accountability recently released a report showing charitable giving to its members has remained steady, especially among its largest members, despite the recession.

But there were signs of challenge for ECFA members with smaller budgets and revenue.

In its first-ever “2010 ECFA Annual State of Giving Report,” total charitable giving to ECFA members (comprised of about 1,400 Christian nonprofits, charities, and churches) was $12.10 billion in 2009, compared to $12.11 billion in 2007, before the current recession kicked into high gear.

The data, taken directly from members' independently audited financial statements, showed organizations with annual revenue greater than $10 million fared best, reporting a 1.4 percent increase in donations compared to 2007. However, organizations with annual revenue less than $10 million reported a 6.9 percent decrease in donations compared to 2007.

Among churches, ECFA reported:

• Local churches experienced a 2.6 percent decline in total donated income, but a 0.2 percent gain in cash donated income;
• Denominations experienced a 3.2 percent decline in total donated income and a 1.8 percent decline in cash donated income.

In our “2010 State of the Plate” survey with Brian Kluth’s Maximum Generosity, we saw hints of decreases for many of the more than 1,000 church leaders who responded. Most notably, 38 percent of churches experienced a decrease in giving for 2009 compared to 29 percent who said the same for 2008.

Of course, one could reverse the statistics to show that 62 percent of churches either held flat or grew during the most difficult economic environment since the Great Depression. In ECFA’s report, Dan Busby—ECFA’s president and one of our Editorial Advisors—took such a positive tone with the overall statistics. “It is very significant that this segment of the giving world was resilient and maintained itself during a difficult economic time,” Busby said in a prepared statement. “Our report suggests a strong commitment of givers to the Christian faith and the generosity of God’s people.”

How will 2010 shape up? As we gear up for the “2011 State of the Plate” survey, we’re eager to hear how the year has gone for local congregations. ECFA also recently surveyed more than 300 nonprofit leaders and learned that 73 percent expect to end the year with either a surplus or a balanced budget.

Of particular interest to us, too, is how much churches are banking on December to push them into a budget surplus. A year ago, 32 percent of churches said their December year-end giving “missed” expectations. That surprised us because December traditionally bodes well for many churches as attendance picks up for the holidays and special events. With unemployment still high (compared to recent historical levels) and income levels flat at best for many, it’s again uncertain whether December can rescue churches facing budget deficits.

What’s the outlook at your church?

For more help related to church giving, check out "Increase Giving at Church," a downloadable training resource from Church Finance Today.

What You Should Know about Year-end Giving and Receipts

Michael Batts and Dan Busby, two members of our Editorial Advisory Board, will co-present a 60-minute webinar on Tuesday, December 7, about the ins and outs of year-end giving and receipts. Batts is managing partner with the CPA firm Batts Morrison Wales & Lee. Busby is president of the Evangelical Council for Financial Accountability, which is hosting the webinar. Both are highly knowledgeable and articulate regarding a wide range of church tax and finance issues, including the handling of charitable contributions.

Among the topics they plan to cover:

• What is required and not required on year-end giving statements
• Cut-off dates for receipting of cash/check gifts
• Noncash gift reporting, including recent cases and IRS correspondence as well as valuing noncash gifts
• Form 1098-C issues with respect to gifts of autos, boats and airplanes
• How to acknowledge quid pro quo gifts
• How to handle Christmas gifts to staff, love offerings raised for staff, and gifts restricted/designated for staff

ECFA members can participate for free, while nonmembers need to register for $29.

For more information and guidance on year-end gifts and charitable contributions, be sure to check out Rich Hammar's 2011 Church & Clergy Tax Guide and our popular 2011 Charitable Contributions Bulletin Inserts, as well as "Best Practices for Receiving Charitable Contributions."