Friday, December 21, 2018

Merry Christmas from All of Us at ECFA

From all of us at ECFA, 
we wish you, your ministry team, and your families
a very Merry Christmas as you celebrate the birth of Our Savior

Monday, December 17, 2018

Essentials of Gift Acknowledgment and Reporting

As 2018 comes to a close, the holidays bring with them a time of reflection. One of our favorite traditions here at ECFA is our last webinar of the year, the 10 Essentials of Gift Acknowledgment & Reporting. To clarify some misconceptions about end-of-year giving, we’ve addressed three of the most common myths to get you and your givers through the season and charitable deductions.

Common Gift Deduction Myths of Givers

Myth #1: You don’t need a gift receipt if you make cash gifts.
Single gifts of any amount over $250 require a written gift acknowledgment. 

Myth #2: You can deduct the value of your time, and/or the rent-free use of property.
Though these two gifts may be some of the most valuable to an organization, they are not deductible for tax purposes. Unreimbursed out-of-pocket costs incurred by volunteers, however, may qualify for a charitable deduction.

Myth #3: It’s OK if you receive a gift acknowledgment after you file your tax return.
Givers must have a proper charitable gift acknowledgment no later than the due date, plus any extension, of their federal income tax return or the date the return was filed, whichever is earlier. Churches should be sure to have appropriate acknowledgments into the hands of givers well before tax time.

Monday, December 10, 2018

ECFA State of Giving - Big News for Churches

As your church comes down the home stretch for 2018, we’ve compiled ECFA State of Giving 2018 to show how last year ended for the nonprofit ministries and churches that ECFA certifies:

  • Big news: Cash giving is up 5.9% between 2016 and 2017, the highest one-year increase since 2012-13, unadjusted for inflation.
  • The 5.9% increase compares with 2.2% for 2015-16 and 2.2% for 2014-15.
  • The data is based on $13 billion of cash giving.
  • For individual churches in particular, giving was up 7.4% between 2016 and 2017, compared to the previous year where it was up 2.5%. 
  • The size category with the largest increase is churches with a budget of $25 million and higher, which is up 8.8%. The smallest increase is churches with less than a $1 million budget, which increased by 1.8%. 

For more insights on giving trends for churches for the complete ECFA State of Giving report.

Monday, December 3, 2018

How to Avoid Church Financial Scandal

How transparent do your church finances need to be?

Are you aware of the legal challenges that may be facing church 990 exemptions and the minister’s housing allowance? 

These questions and more were addressed in a recent webinar from MortarStone titled How to Avoid Church Financial Scandal. The webinar features great insights from Gunnar Johnson, Executive Vice President of MortarStone and founder of Financial Freedom International, and ECFA’s Vice President, Michael Martin.

Here are a few key takeaways from the webinar:
  • Society’s view of the Church’s financial credibility is suffering. Studies have shown a growing distrust of churches and the way they handle money. Millennials in particular are skeptical of organized religion and its impact. A recent Barna study showed that of those Americans who identify as agnostic or atheist, distrust of the Church is listed as a top reason for their beliefs.

  • Leaders must be committed to stewardship. Scripture itself underscores the importance of stewardship in church leaders:
“Moreover it is required in stewards, that a man be found faithful.” (1 Cor 4:2)

“The saying is trustworthy: If anyone aspires to the office of overseer, he desires a noble task. Therefore an overseer must be above reproach…not a lover of money.” (1 Tim 3:1-3)

“We are careful to be honorable before the Lord, but we also want everyone else to see that we are honorable.” (2 Cor 8:21 NLT)
  • There is an increasing demand for transparency in churches. The courts are seeing a rise in cases in which atheist groups and others oppose religious protections for churches, such as the housing allowance and other tax advantages. The increase in this type of litigation is symptomatic of a culture that is calling churches to an account. Churches should therefore take steps toward appropriate transparency.

    As ECFA President Dan Busby says, “Facing an insatiable desire for transparency, trusted churches find the balance between being appropriately transparent and measuring privacy concerns and administrative burdens.”

  • Avoid the dreaded question: Where was the Board? When church financial scandal occurs, the responsibility nearly always comes back to the board. Churches can strive for “Verifiable Accountability” by maintaining an independent board of at least 5 members which meets at least semi-annually and focuses on policy and mission.

  •  Compensation and conflicts of interest are key issues to consider. When it comes to these issues, we must think about them from a LEGAL standpoint, a BIBLICAL standpoint, and a PERCEPTION standpoint – how will this appear to others?

  • Honor giver expectation and intent. ECFA’s 2017 Generosity Project survey found that 93% of all givers agree that it’s extremely important for ministries to uphold specific standards of financial integrity. A key ingredient in these standards is trustworthy stewardship – using the money the way you’ve said you will, and communicating accurately and appropriately with givers.

  • Churches are often vulnerable to fraud. Deliberate misappropriation of funds within a church often comes from a long-time, “trusted” member of the church. In order for fraud to occur, three conditions are usually present: PRESSURE (on the individual who commits the fraud – such as financial crisis or other life circumstances), RATIONALIZATION (the individual justifies their actions – “I’ll take this money now, but I’ll pay it back” or “I’m not being paid enough, so I deserve this”), and OPPORTUNITY, which is the only factor of the three that the church can, to some extent, control.

    Therefore, it is important to implement safeguards and internal controls which decrease the opportunity for fraud. ECFA offers resources to aid churches in this effort, such as basic fraud prevention steps, warning signs of a possible fraud environment, and steps to take if fraud is suspected. These resources and more are available through ChurchEXCEL, ECFA’s FREE online community for churches.

Ultimately, when it comes to avoiding church financial scandal, we must consider the calling we have, as it was so well stated by John Wesley, “Our responsibility is to give the world the right impression of God.”

Click here to view the full webinar, How to Avoid Church Financial Scandal.

Click here to join the free ChurchEXCEL Community and receive access to a wealth of free church financial resources from ECFA.

Monday, November 26, 2018

Retirement Planning for Ministers and Churches – Part 2

Consider these statistics:
  • According to the CDC, life expectancy in the U.S. has climbed from 66 in 1940 to 79 in 2016. This means that, on average, Americans need to plan for many more years of retirement than in previous generations.
  • Northwestern Mutual’s 2018 Planning & Progress Study found that 21% of those surveyed have $0 retirement savings, 40% have less than $25K saved.
  • Michal Grinstein-Weiss / Washington University study found that 45% of those surveyed had no retirement savings; the median retirement account balance was $3K, and only $12K for households nearing retirement

Clearly, retirement planning is important, and for ministers, the church has a responsibility to care for ministers as their role changes. In the recent webinar, 8 Essentials of Retirement Planning for Ministers and Churches, and in an eBook by the same name, ECFA lays out the roles of both the church and the minister, best practices to do what is right before God and man, and important concepts for practical application.

This 2nd post in a 2 part series will highlight Essentials 5-8. (Click here to read Part 1 on Retirement Planning for Ministers and Churches.)

Essential 5: Encourage Contributions

It is important for churches to help staff to understand the realities of longevity, the necessity for savings, and the freedom to go and grow during the future. Churches are urged to make participation and retirement preparation an expectation of every minister and staff person. Some churches may choose to automatically enroll individuals, consider an auto escalation feature for employee contributions, and strongly encourage ministers and staff to take advantage of any matching by the church for “free” money. It is also important to advise staff members with ministerial status about special tax advantages.

Essential 6: Recognize the Uniqueness of Ministers

There are certain aspects of compensation and benefits that are different for ministers than for any other church staff members. Two special benefits for those with ministerial status are:
  • Nonelective and elective employer contributions are excludable from income and SECA tax
  • Minister’s housing exclusion can be applied to distributions from denomination or church-sponsored 403(b)(9)
Churches can honor their ministers by helping them maximize all the tax benefits offered by careful planning.

Essential 7: Consider Planning Insights and Key Issues

There are four planning insights that are beneficial to consider:
  1. Spousal income – leverage any spousal income by saving when possible, and participating in matching retirement plans
  2. Social Security – be aware that whichever spouse is eligible for social security benefits, the other spouse is automatically eligible for 50% of that amount or their earned amount, whichever is higher
  3. Bi-vocational income – participate in employer match plans, but make the church plan your primary saving vehicle
  4. Living trust - create a living trust to avoid probate court and allow you to direct how your estate will be handled

Essential 8: Continue Planning

For larger churches with ministers not already covered under a denominational plan, consider a Retirement Plan Oversight committee to expand the oversight to more than one person, provide fresh perspective, and expertise in various areas. It is also helpful to add a person with little retirement planning knowledge to represent a lay perspective.

To help ministers make timely decisions that ensure a comfortable retirement, check out this Countdown to Retirement, provided in ECFA’s Knowledge Center.

Monday, November 19, 2018

Retirement Planning for Ministers and Churches – Part 1

Planning for retirement is perplexing and complex to many. The goal is to provide a framework, a way of thinking about, and a way to successfully plan for retirement to show “double honor” to those who labor as ministers. When approaching the issue of retirement, there is an interdependence between the church and the minister. When they are both in tune, the resulting music will be beautiful. When they are not, the discord will be painfully evident.

In a recent webinar, 8 Essentials of Retirement Planning for Ministers and Churches, and in an eBook by the same name, ECFA lays out the roles of both the church and the minister, best practices to do what is right before God and man, and important concepts for practical application.

In this post, we’ll highlight the first four essentials from the webinar and eBook.

Essential 1:  Understand the Stages of Retirement

The stages of retirement can be broken down into three main categories. While the precise ages may vary from person to person, each of these stages is unique and packed with Kingdom-building opportunities.
  • Active Application (67-77) – slowing down a bit, but still productive in leadership, bringing energy and insight to any endeavor
  • Insightful Stewardship (78-87) – bringing wisdom and insight through mentorship; leadership roles are collaborative
  • Reflective Sharing (Ages 88+) – reflecting on what God has done, and sharing that with those in your sphere of influence

Essential 2: Help Staff and Ministers Understand the Need

It is important to guide your church and its leadership to develop a well thought out, financially sound, and tax conscious retirement plan for ministers and staff. Factors to consider include longevity (life expectancy), cost, and future service (what God will call each person to in the stages of their retirement). The two biggest expenses to plan for are healthcare and housing.

Essential 3: Assess the Church’s Role in Retirement
As stewards of God’s resources, churches have a measure of responsibility for the long-term well-being of our Christian brothers and sisters, ministers, and staff. Churches are encouraged to:
  • Provide tax-advantageous opportunities to save
  • Assist by making contributions to the plans available
  • Encourage participation and preparation for both ministers and staff

Essential 4: Select the Right Vendor

For ministers not already covered under a denominational plan, it is critical to work with a vendor that specializes in church retirement plans. It is key that the vendor understands how to utilize the housing allowance as it relates to contributions to the retirement plan, as well as offering values-based investments (funds that align with biblical values). It is also imperative to have access to an IRS approved plan document to ensure that the plan meets all IRS requirements.

Please watch this blog for Part 2 on this topic, which will cover Essentials 5-8 from the ECFA webinar and eBook 8 Essentials of Retirement Planning for Ministers and Churches.

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Monday, November 12, 2018

Top Takeaways from Our First Year Multisite – with Justin Steinhart

When it’s time for your church to start considering big decisions, whether launching a new ministry, expanding leadership, or going multisite, it is imperative that God take the lead. What does that look like in practice? Church administrators, this one’s for you.

Justin Steinhart, Pastor of Administration at Mill City Church, has been there for many changes, including the move to multisite. On a recent ECFA podcast, Justin shared with us a few takeaways for churches on the cusp of this decision.

  1. Going multisite will expose your weaknesses as a church. It will push staff, team, and leaders beyond their comfort zones, and will require more work and responsibility.
  2. Foster a pipeline of skilled and capable leaders. People must be continually trained and developed. Growth tracks and programs will help individuals in your ministry become talented, homegrown leaders ready to take the next step.
  3. Investigate your church culture. How would you define the culture of your church? Ask yourself: is this something that is being continually cultivated and producing fruit?

Administration is an essential component of Kingdom work, and we are thankful for each and every person who makes this work happen. You are valuable, you are seen, and we want to help support you with free resources! Check out ChurchEXCEL church administration resources, or pass the link along to a friend.

Monday, November 5, 2018

Smart Money for Church Salaries - With David Fletcher

Working in ministry presents a unique set of challenges, but fair and reasonable compensation is something we should all strive for in our churches. More than that, there is a legal and biblical mandate to get it right. To abbreviate, here are three top areas where churches can be smarter when it comes to salaries:

  1. Solid salary comparisons. It is beneficial to draw from a variety of local sources, beyond national comparisons of other churches. 
  2. Use a good, and legal, ministerial housing allowance form. Maximizing the benefit of the housing allowance, and knowing how to plan for it, can make a big difference in take-home pay. 
  3. Create a master spreadsheet for salaries. This should include every component (salary, benefits, etc.) of compensation for every staff member in the organization. 

In a series of workshops during 2018, David Fletcher of XPastor explores the topic of church salary with attendants from across the country. In his companion book, Smart Money for Church Salaries, David uses a compiled case study from church compensation team meetings to help pastors and staff navigate preparing, performing, and doing their best when it comes to salary.

For more detailed discussion, (including resources and sneak peeks) be sure to check out the full ECFA podcast with David Fletcher of XPastor.

Monday, October 29, 2018

Hot Legal Topics for Churches

In today’s culture, churches are increasingly faced with legal challenges and considerations when striving to operate their ministry with the utmost integrity and accountability. A recent ECFA webinar addressed several important legal topics facing churches today.

ECFA President Dan Busby was joined on the webinar by attorneys Steven Goodspeed and Mark Francis Juba of the firm Middlebrook Goodspeed, PLLC.  Some of the questions addressed included:
  • Why is it important to review our Articles of Incorporation or Certificate of Formation? If we are following our bylaws, isn’t that enough to keep us in legal compliance in terms of our governance?
  • When it comes to Religious Freedom Protections, where do we need to document our Statement of Faith as it pertains to marriage, sexuality, and gender issues?
  •  Do we need a IRS Tax-Exemption Determination Letter (Form 1023)?
  • What are the best legal safeguards for Employment Contracts, Volunteer Agreements, and Separation Agreements?
  • When it comes to documented Policies and Procedures, can’t we just copy examples from for-profit businesses?
  • What do we need to do to demonstrate due diligence in the areas of Child Protection?
  • Can we offer “Licensed Professional Counseling” through our church? How does it differ from “Pastoral Counseling?”
  • What is Christian Alternative Dispute Resolution and how is it helpful to churches?
  •  How do we handle special funding for Disaster Relief?
  • What considerations do I need to be aware of concerning Domestication Procedures if we are moving to a different jurisdiction?

The webinar also included a time of Q&A. Click here for a recording of the webinar.

Monday, October 22, 2018

Atheists Renew Attack on Church Form 990 Exemption

The Freedom From Religion Foundation (FFRF) is back in court to challenge another longstanding exemption in the U.S. tax code for churches.

This time, the atheist organization is targeting the church exemption to filing the Form 990, an annual information return which most public charities are required to file each year with the Internal Revenue Service and make available for public inspection. The Internal Revenue Code has never required churches to file such a form given concerns over preserving the proper degree of separation of church and state, with the current exception for churches in Section 6033(a)(1)(3).

FFRF attempted a similar challenge to the Form 990 church exemption several years ago, only to have its case dismissed in 2014 for lack of standing. Shortly thereafter, FFRF formed a separate humanitarian charity, Nonbelief Relief. Since its inception, Nonbelief Relief has intentionally failed to file the Form 990 for three consecutive years so that its tax-exempt status would be revoked by the IRS in an attempt to gain standing.

Please check out the latest video News Alert with ECFA Vice President Michael Martin.

Monday, October 15, 2018

Serving the Local Church: Free Resources from ECFA

You may know what ECFA is (the Evangelical Council for Financial Accountability) but you may not know about our free resource community for churches, ChurchEXCEL. Here at ECFA, our leadership is passionate about serving the church, and offering these resources for free is something we are very excited about. If you are a church leader or administrator, or happen to know one, we invite you to take full advantage of this amazing community.

Since churches are the fastest-growing segment of ECFA’s membership, we are always asking ourselves: How do we continue to best serve the local church? We look forward to answering that question with more resources on even more topics relevant to you and your ministry. If you haven’t already, check out a host of available freebies from ChurchEXCEL. Catch a webinar, download an eBook, or explore the Knowledge Center.

For a great discussion on what ChurchEXCEL can do for your church, check out this podcast as we welcome ECFA’s newest staff member, Dr. Warren Bird, and discuss all ECFA has to offer.

Monday, October 8, 2018

Don't Go it Alone - Top Trends in Church Administration

Church administrators provide the support system for all the ministry that happens on Sunday morning and throughout the week. Your role may be unique, but you’re not the only one who has ever been there.

In a recent ECFA podcast, Phill Martin from The Church Network offered insight into lessons church administrators of all backgrounds can learn from. He also shared trends for churches to be aware of and prepared for:

The privileged nature of church has shifted. There are many activities competing for people’s time on Sunday morning, and church attendance is not the priority it was in previous years. Sporting events, business hours, and a cultural shift of priorities all clamor for attention. If you are feeling this change at your church, it is not uncommon - but it may require additional changes and new approaches.

Legal issues are on the rise. This has been a topic brought up in a few podcasts, as litigation involving churches is more and more prevalent for a variety of reasons. Whether it involves church facilities or experiencing pushback when establishing a new location, churches should be prepared and aware.

Church has different connotations today, and not all of them are good. Due in part to failures in some local churches, as well as the shifting culture, ministry is no longer as honored a profession as it once was. The sense that church is something that “everyone does” is not the case anymore, and it affects how church administration is done.

Engagement is critical. Churches that are successful and growing are probably not looking to a seminary or denomination or another church to say how they should function. Rather, they tend to look at their community, find what is needed, and pair that need with the unique strengths of the congregation. This directs the efforts of members of the congregation to serving the community. Church growth is a natural byproduct of engaging with the world by responding to real needs.

Communication methods are different. If your only communication is Sunday morning announcements, that is no longer effective. Most communication takes place outside of the building, and, more prevalently, online. The change comes with a greater opportunity than ever before to reach the community your church desires to serve and lead to Christ. Developing sound social media platforms and strategies is a great place to start.

For more discussion and resources to keep you up-to-date, tune in to the full podcast.

Monday, October 1, 2018

Leading from a Heart of Service

Following in a legacy left by his parents, Dan Busby has a God-inspired desire to serve. His unique experiences are being used by to accomplish great Kingdom work through ECFA.

If you were to walk into Dan’s office, you might notice tucked behind the door a display of his business cards from throughout his professional career. Each role prepared Dan to serve in an even greater way at a later time. Dan has accumulated a history of experience related to each of ECFA’s three pillars: governance, financial management, and gift administration. His heart for Christ-centered ministries and leaders has aligned with ECFA’s resources and service to that audience.

Listen in as Dan shares his wisdom in the ECFA Podcast: Leading from a Heart of Service.

For more insight and inspiration from Dan, check out Trust: A Firm Foundation for Kingdom Fruitfulness, as well as a host of other books available from ECFAPress.

Monday, September 24, 2018

Help for Church Budgeting Part 2 - Four Budgeting Buckets You Can't Afford to Overlook

In last week’s blog, we discussed the importance of strategic planning when it comes to church budgeting, and ECFA resources on this topic, including the eBook, 10 Essentials of Church Budgeting, and the upcoming companion webinar by the same name.

To expand on some of the issues and considerations of church budgeting, ECFA’s Michael Martin recently sat down for a podcast with Tim Cool, Chief Solutions Officer of Cool Solutions Group, an organization which works with churches in the areas of facilities management and stewardship of what God has entrusted to us.

After 22 years of working in the church construction industry, Tim became burdened to grasp the concept of “facility stewardship.” Everything we have belongs to God, so what are we doing to steward our facilities? We are going to be held accountable for them, so once the building is built, we need to take care of it.

As Tim has helped churches over the years, he has seen four areas, which he calls the Four Buckets, where money needs to be planned for and then allocated to in order to practice faithful facility stewardship:

  1. Operations -  this includes utility bills, janitorial services, general maintenance, and staffing. The biggest mistake churches make is not planning. As the adage goes, “We don’t plan to fail, we just fail to plan.”

    Another common mistake is when churches don’t look critically at their spending in operational areas. For instance, one church failed to notice that their utility costs were far above the average for a church their size. Once this was noticed, the church realized that they were running their A/C 24 hours a day instead of when it was needed. By making one small adjustment, they were able to save tens of thousands of dollars in operations costs which could then be put into capital reserves.

  2. Deferred Maintenance - this is “all the things that you should have done but you didn’t do already.” In a perfect world, the bucket for deferred maintenance would not exist! The best way to work toward eliminating deferred maintenance is to adequately fund general maintenance and staffing within the operations budget. That way you can keep the building and equipment in good, workable condition until you are ready to replace something, and then it comes out of the capital reserves bucket.

    With the rise in church plants and mergers, Tim sometimes sees scenarios where a church is given a “free building” by another congregation that no longer uses the space, and at first it seems great, but then the church realizes there are millions of dollars in deferred maintenance at stake, and it’s no longer a wise acquisition.

    Tim shares some startling statistics: There are an estimated 350,000+ churches in the U.S., and those churches are believed to account for at least $500 billion in deferred maintenance. This does not send a message of good stewardship to a watching world.

  3. Capital Reserves - Less than 5-6% of churches have adequate capital reserves, and among evangelical churches, the problem is particularly acute. This may be because evangelical churches tend to be very mission-focused, which is a good thing because that is the true call of a church. However, as Tim says, “while a building will never save a soul, we would have a tough time doing church in North America without our buildings.”

    So how much is enough? Tim suggests setting up a program to analyze every component, such as using a free software called Life Cycle Calculator to help calculate costs and timing for replacing facilities and equipment, accounting for inflation. Another rule of thumb: $1-3 per square foot needs to be SAVED annually into a capital reserves fund.

  4. Projects - This includes the exciting things that we like to think of when it comes to facilities - building additions, renovations, etc. Projects are needed for growth, but the other three buckets must be taken into account when considering new projects that will need to be maintained and cared for in the future.

Also be sure to check out Church Facility Management Solutions, a free, online community for those entrusted with facility stewardship. Tim’s eBook, the Four Buckets of Church Facility Budgeting, is available free when you join.

Don’t forget to register for the upcoming ECFA webinar, 10 Essentials of Church Budgeting. The webinar is free for ECFA member churches as well as those who have joined the free ChurchEXCEL community.

Monday, September 17, 2018

Help for Church Budgeting Part 1 - Strategic Planning

A budget is a strategic plan for dispensing available resources to various areas of your ministry. One thing is clear right from the start – there is no single perfect way to do church budgeting.  Yes, nearly all budgets involve electronic spreadsheets or sophisticated software - but budgeting is so much more.

A budget sets priorities for every activity of the church. It reflects your values to ensure that you spend money on the things you believe are most important. It is both a compass and a map to help you achieve the goals of your ministry in a way that is fiscally responsible.

As Richard Vargo and Vonna Laue remark in their Essential Guide to Church Finances, “A good budget process means that 11 acts of war can be eliminated because one annual battle is substituted for 12 monthly skirmishes.”1

Budgeting includes evaluating past spending habits and deciding what you are going to do in the future. You must make decisions and establish priorities for all the possible ministries your church may undertake during the coming year. Every aspect of ministry, from salaries and facilities to the senior and youth programs, must be taken into account.

A budget causes a church to decide whether to fund each ministry fully, partially, or not at all. Staffing costs must be considered within those decisions, since some programs carry significant staffing costs while others may be heavily supported by volunteers.

Lastly, and perhaps most importantly, biblical texts provide insight for mapping out budget categories. Galatians is a particularly helpful New Testament letter for budget managers because it was one of Paul’s first letters written at a time when the early church was making financial decisions (c.48-49 AD). In Galatians, budget managers learn to be sure to care for the poor (Galatians 2:8-10), to minister to the needs of those who teach, which in modern terms means pastors and other church staff (Galatians 6:6), and to work toward programs that bless the congregation as well as the larger community (Galatians 6:10).

For nearly two millennia, these areas have been the basic components of church budgets, but building and administrating these budgets is a complex process.

ECFA’s eBook, 10 Essentials of Church Budgeting aims to assist leaders in today’s churches to budget efficiently and effectively, and in accordance with the biblical model.

Click here to download the eBook. (free for ECFA members and ChurchEXCEL subscribers)

Be sure to watch for next week’s blogpost, which will highlight a recent podcast on the topic of Church Budgeting as well.

Lastly, don’t miss our upcoming companion webinar on this subject, 10 Essentials of Church Budgeting, in which ECFA’s Vonna Laue and John Van Drunen will pull insights from the eBook, and also allow time for Q&A. This webinar is FREE for ECFA-certified churches as well as for ChurchEXCEL subscribers. Register here today!

1Richard J. Vargo and Vonna Laue, Essential Guide to Church Finances (Carol Stream, IL: Christianity Today International, 2009), 11.

Monday, September 10, 2018

Top Legal Risks for Churches Today with The Church Attorney, Erika Cole

Operating with integrity and being aware of risks are necessary elements needed to focus on ministry work. In today’s shifting culture, churches face many risks that were not such pressing concerns in the past. In a recent podcast, Erika Cole, also known asThe Church Attorney, offered a few tips for leaders on changes that churches are facing today. Here are some highlights:

Church litigation is a primary concern. There is a shocking amount of litigation involving churches nowadays. It can affect all churches, but especially those with memberships of over 1,000. This significant shift means that churches must be aware of the rapidly changing legal environment.

Social media is something that is now a part of our daily lives, and many churches use it to reach more people than ever before. However, sometimes things can go awry. Such an important and public platform requires policies, careful management, and consideration of legal concerns.

Church mergers are becoming more common for a variety of reasons.

In the face of all these concerns, how should churches respond? Ms. Cole encourages church leaders to be proactive in prayer and pursue new education on these topics. It is important to be informed and up-to-date on these risks and what actions are being made to mitigate them.

In an environment of increasing risk in various forms, encouraging and challenging one another to operate with integrity is imperative.

For FREE updates, resources, and best practices, visit

Tuesday, September 4, 2018

Fraud Checklist - How to Prevent, Detect, and Correct Fraud in Your Church

We hear about church fraud in the news, but we don’t want to consider it as a possibility in our congregation.

To help churches address the issue of potential fraud, ECFA has developed a checklist which includes basic fraud prevention steps as well as a list of behaviors and actions on the part of a member of the finance team that may serve as warnings of a possible fraud environment. The checklist concludes with practical follow-up steps if fraud is suspected.

While this short summary is not meant to be all-inclusive, it will help you assess your current situation and determine if additional precautions or considerations may be necessary to protect your church.

Remember! Most fraud is committed by a faithful, long-serving volunteer or staff member.

View the Fraud Checklist here.

Monday, August 27, 2018

10 Foundations of Church Financial Integrity

In today’s environment, the need for churches to operate by the highest standards of financial integrity has never been greater.

“Overlook the foundations of financial integrity, and your church is headed for a world of hurt. All it takes is even the perception of wrongdoing for ministry to come to a screeching halt,” says Michael Martin, ECFA’s vice president of church relations. “On the other hand, watch your ministry accelerate as trust is enhanced through demonstrating financial integrity and accountability.”

Ready to assess where your church stands? Use this ECFA checklist as your guide in addressing 10 foundational areas that are key to operating with excellence and integrity.

As a certified church, displaying ECFA’s trusted seal can help strengthen your testimony and encourage greater generosity. To learn more about the benefits of certification, visit

Looking for more resources to build upon your integrity foundation? Check out these other free tools from ECFA:

ECFA’s Integrity Standards for Churches (Seven Standards of Responsible Stewardship™)

Monday, August 20, 2018

Is Your Church Culture Healthy or Toxic?

Whether or not you know it, your church staff has a culture — and it may determine more than you know.

First, of all, we’re not talking about the culture of your church as a body of believers. That is entirely different. Staff culture is formed by the people who makes things happen at your church. They may be leaders, salaried, or volunteering. Ask yourself: who is at the center of how things get done at our church? 

Your church may have core values that are written down, but culture is typically unwritten. It involves how the staff functions together, the “family rules” that often go without saying. Ask yourself: beyond the mission of our church, what are the behaviors that we exhibit as a team as we try to accomplish that goal?

In William Vanderbloemen’s book, Culture Wins, he coins the importance of finding “your kind of crazy.” Having cultural values that aspire to perfection are not it. Rather, focus on identifying your quirks and strengths as a team. Ask yourself: what is unique (and successful) about your staff that may be uncommon elsewhere? That’s your kind of crazy.

Monday, August 13, 2018

Charitable Giving Inches Upward

ECFA conducted a survey to ask how churches and ministries ended 2017 and began 2018 in terms of charitable giving, releasing the results on July 16, 2018.

  • The survey indicated an upward tick in charitable giving that put churches and nonprofits in a better position to start 2018. The year 2017 ended better than did 2016 for many ECFA-related ministries. Going forward, there are many factors to consider in 2018. Depending on the size of the church or ministry and their annual budget, even a decrease in giving as low as 3% could have a significant impact on nonprofit organizations. 

  • Despite a bump in giving from December 2017 for many ministries, money remains tight. The year-end increase somewhat hides the close financial margins experienced by most ECFA-related ministries. The response to a potential decrease in giving for 2018 depends on a variety of factors. Some have adequate reserves to absorb the impact, while most ministries would need to compensate with budget changes. 

  • One finding that comes as no surprise is that ministries are very donation-dependent. For ECFA-related ministries, December is a crucial month. These year-end donations are critical to their budgets. In fact, a solid majority of ECFA-related Christian charities receive more than 75% of their income from donations alone. For churches, the percentage of income from donated funds is even higher.

Download the full Charitable Giving Inches Upwards survey report for more trends and benchmarks.

Monday, August 6, 2018

Combatting the Tyranny of the Urgent

The seemingly endless barrage of phone calls, emails, reports, meetings, and everything else on the to-do list: we’ve all been there. One of the most common problems facing church leaders is that they are busy. This condition is often referred to as “the tyranny of the urgent,” and it is what keeps financial managers from becoming financial leaders.

Without micromanaging the day-to-day management, senior leadership needs to consciously align budgeting, controls, and systems with the mission. When long-term planning happens, there is confidence in the future of the ministry. Not only that, but financial leadership inspires a sense of freedom to pursue future ministry opportunities.

Here are a few practical ways to grow in financial leadership:

Be acutely aware of trends. They are more than just fads. Identifying trends as they relate to your ministry will keep you updated and relevant.

Focus beyond the funds. Financial management generates sound numbers, but healthy financial leadership is needed to make sense of those numbers. How do you measure the success of a ministry? Lives changed is a good place to start.

Network with others. Make sure people learn what they need to. Connect to mentors that can answer questions and offer guidance. Engage with available tools and connect with newsletters, articles, and other materials related to the work of your ministry.

Assess regularly. Take time to step back and identify areas of difficulty and start making necessary improvements.

No matter your staffing ability or resources, church leaders should be asking: What am I doing today that only I can do, and what can someone else be doing that I am spending my time on? This could mean prioritizing, delegating, hiring, or seeking out skilled volunteers when the budget is tight.

For more on growing in financial leadership, check out the Growing in Financial Leadership Podcast at

Monday, July 30, 2018

ECFA Welcomes Dr. Warren Bird to Full-Time Staff

ECFA is pleased to welcome Dr. Warren Bird onto our full-time staff. We have CPAs and attorneys on our team, and now we get a Ph.D. We are excited!
An ordained minister with a big heart for the local church, Warren has led in various pastoral positions, taught at several seminaries, and served most recently for 13 years at Leadership Network, overseeing their research department where they’ve released several dozen groundbreaking reports on topics like multisite churches, large-church compensation, church planting, and church internships and residencies. 
An award-winning writer, he has also co-authored 30 books for church leaders on topics like breaking growth barriers, healthy mergers, and pastoral succession.
Warren will serve as our Vice President of Research and Equipping. The “research” side is to increase the scope, impact and depth of our knowledge base as we’re increasingly asked for peer benchmarks for our members. The “equipping” side of Warren’s role, according to ECFA President Dan Busby, is “energizing ECFA's nearly 2,300 members as they apply what ECFA is learning through research." Busby added, "Warren is a treasure for the world of Christ-centered churches and ministries. It is thrilling to have him join the ECFA team."
Warren and his college sweetheart wife, Michelle, live in Metro New York City.
As Warren bridges to ECFA, he sat down with Leadership Network's Dave Travis. Read the Interview Here.

Monday, July 23, 2018

Growing in Financial Leadership

What does it mean to provide financial leadership in a church?

Financial management addresses the to-do list of things that need to be done daily. Financial leadership, however, is a strategic way of thinking that aligns these operations with the long-term mission of the ministry. Leading the finances of a church means thinking broadly about sustainability while working to seize new opportunities. 

Here are some areas in the church where financial leadership is needed most:

Budgeting with a mission mindset. Intentionally aligning the dollars with the mission.

Setting aside reserves. Planning is critical for the future of the mission. Saving strategically requires leadership. Having adequate reserves allows an organization to grow and embrace new opportunities.

Creating a stewardship culture from the top down. Operating with integrity begins with the leadership. There needs to be a desire for compliance that starts at the top and permeates the entire ministry.

Making competency a priority. Hire capable people into positions, staff adequately, and provide training. Seek out quality volunteers.

Setting the priority on God-honoring financial management begins at the top. But amazing things happen when the leaders are on board - and the mentality tends to spread.

Listen to ECFA's Growing in Financial Leadership podcast here:

Monday, July 16, 2018

Large Church Compensation Trends

Dr. Warren Bird is one of the top researchers and experts in church compensation trends, especially in large churches. In his years of experience, Dr. Bird has found that churches of all sizes want comparisons to ensure that their compensation is on track. The 2018 Large Church Salary, Staffing, and Benefits Survey was created for that purpose. This objective comparability data can be used to enhance integrity and confidence in compensation planning. Here are three of the most common questions addressed by the survey:

How much of our budget should go toward staffing costs?
There is no “right amount.” However, the most recent survey shows that the norm is just below 50% of all church funds. For large and small churches alike, this ratio has largely remained consistent over the years.

What are some executive salary benchmarks?
These numbers are, of course, dependent on a variety of factors. On average, the report found that the second-in-command (Executive Pastor, etc…) is typically at 70% of what the top leader (Senior Pastor) makes, while the third person is typically at 59%.

To what degree should compensation information be made available?
Most churches do not disclose compensation details to the public. However, some churches may choose to inform their members upon request. Encouragingly, it was found to be broadly practiced that a designated team from the board with no conflict of interest establishes compensation.

Planning and evaluating fair compensation is an opportunity for the church to stand above reproach. For more on each of these questions and additional information from the survey, check out the free download here:

For tailored salary compensations:

Listen in to our podcast conversation with Dr. Warren Bird: