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:

Monday, July 9, 2018

5 Building Blocks of Church Financial Integrity

“Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house upon the rock. The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock.” (Matthew 7:24,25)

Today’s churches are living in an age of frequent if not constant challenges. For church leaders and administrators, it is not a matter of if the rain, floods, and winds are coming, but when. Now more than ever, it is essential that your church is built upon a foundation of strong financial integrity that will weather the storms.

Often church leaders have a desire to shore up their financial integrity, but they aren’t sure where to start. The good news is building your church’s financial integrity is not as complicated as you might think. Much like a strong and solid home is built brick-by-brick, there are basic building blocks that provide the foundation for your church to stand strong in the face of challenges.

In the ECFA eBook, 5 Building Blocks of Church Financial Integrity, we explore these five essentials: Committed Leadership, Sound Financial Management, Appropriate Transparency, Excellence in Compensation & Conflicts of Interest, and Trustworthy Stewardship, as well as the “glue” that holds it all together: Accountability.

Here are a few key takeaways from the eBook:
  1. Committed Leadership – The church’s governing body and staff must lead the way for financial integrity. A committed, independent church board selects good leaders, makes decisions in light of Scripture, and keeps the church accountable to its overall mission. (Key Scripture: 1 Tim 3:1)
  2. Sound Financial Management – Integrity requires administering church finance with diligence. Important issues to address include proper use of resources, financial oversight, and a thorough understanding of internal vs. external audits. (Key Scripture: 1 Cor 16:1-4)
  3. Appropriate Transparency – Regular financial reports create an atmosphere for greater generosity. Openness and transparency through public disclosure of financial statements and project reports promotes responsible Christian stewardship and enhances trust with givers and a watching world. (Key Scripture: Rom 15:25-26)
  4. Excellence in Compensation & Conflicts of Interest – Church leaders must avoid even the perception of improper personal benefit. Carefully designed and consistently executed policies for compensation setting and potential conflicts of interest can help ensure that the church is above reproach. (Key Scripture: 1 Tim 5:17-18)
  5. Trustworthy Stewardship – Givers expect churches to be faithful to their word in the process of raising and spending resources. By striving for truthfulness in communications, honoring giver expectations and intent, issuing appropriate gift acknowledgments, and acting in the best interest of givers, not fundraising consultants or staff, your church can demonstrate faithful administration of resources. (Key Scripture: 2 Cor 8:20-21)
Accountability is the Glue

Like a New Year’s Resolution to diet or exercise, the best intentions often fall by the wayside when there is no accountability. Maintaining financial integrity requires a certain support system to be successful in the long run. Churches can make themselves accountable to their members, congregants, and financial supporters through such avenues as independent board governance, internal controls, denominational oversight, and third-party certification by independent organizations such as ECFA.

There are currently more than 2,200 organizations across the United States that demonstrate their commitment to high standards of financial integrity through ECFA membership. Churches are the fastest growing segment of ECFA members, and ECFA-certified churches represent 18 different denominations and over 40 of the nation’s largest and most vibrant congregations.

To learn more about ECFA membership as well as other ways that ECFA can support you in your ministry, call 800-323-9473 or email

To listen to a recent ECFA podcast on this topic click here. To download the FREE eBook 5 Building Blocks of Church Financial Integrity click here

Monday, July 2, 2018

5 Tax Saving Tips for Pastors

Reimbursing ministry-related expenses can add up to huge savings for pastors. To best manage them, create an accountable expense reimbursement plan that outlines what is eligible for reimbursement, the substantiation required, and when the expense must be substantiated. Here are three tips for complying with a good accountable expense reimbursement plan:
  1. Only submit items that constitute a church business expense. Not everything qualifies as a business expense.
  2. Substantiate the expenses submitted to the church. The details are important. Go beyond providing a receipt. Remember the 5 W’s: why does the expense qualify, what expenses were incurred, when were the expenses incurred, where were the expenses incurred, and who was involved.
  3. Submit the expenses for reimbursement in a timely fashion. For the sake of clarity, make expense report thorough and timely.

Remember, reimbursements under an accountable plan always save pastors more money than Schedule A deductions. For more on how pastors can leverage the tax law to save money, tune in to the conversation here:

Monday, June 25, 2018

Budget Allocations - Part 2: Practical Steps

Churches readily understand the importance of preparing an annual budget and having it duly approved by the appropriate church committee, board, and/or the congregation—whichever is charged with financial accountability and oversight responsibility.

But here’s the catch: A budget is a largely useless document unless the monthly budget allocations are done well. Decisions of whether to make spending adjustments must be informed by sound allocations of revenue and expenses. Unfortunate decisions can be made based on poor allocations. What is the church financial team to do?

Take these simple steps:
  1. Take monthly budget allocations seriously. Don’t go through the arduous budget development process and destroy the usefulness of the budget by failing to do the further hard work of making sound revenue and expense allocations by month.
  2. Study prior year actual data by month. The starting point for current year budget allocations is the prior year actual data. Study it to determine the significant data that will change for the current year. For example, in the prior year, suppose a large expense for attorney fees occurred over a four-month period because of a lawsuit brought against the church. The matter is now closed and only a modest amount is in budget as a legal retainer—this amount might well be spread ratably over the current year.
  3. Reflect on changes in revenue or expenses patterns for the current year. Certain new or increased activity for the current year may modify the monthly revenue or allocation pattern for the current year. For example, a new program may be scheduled only to run for three months in the spring and three months in the fall, therefore the budget allocations by month must match the anticipated expense pattern.

Sound budget allocations will help your church make more informed decisions. Try it and see for yourself how useful a budget can be.

For more great tips on budgeting, check out the 10 Essentials of Church Budgeting eBook (free to ECFA certified churches). 

Don’t live with your bad budget allocations for the entire year! Read more in this article from ECFA President Dan Busby. (Published in The Church Network inSight Journal - Summer 2018.)

Monday, June 18, 2018

Budget Allocations - Part 1: Common Budgeting Mistakes

How do some churches short-change the budget allocation process?

Here are three possibilities:

  • A church takes the easy way out on budget allocations. The simplest and most inaccurate way to arrive at monthly budget numbers is to divide each budget line-item by 12 months. This may work for monthly rent payments and insurance premiums but for most line-items, it is not a valid approach. If January and February always have disproportionate heating bills plus a big annual insurance premium, then every single year you’ll start off quickly sinking behind budget, and then spending the next several months saying, “we are way behind.” Then if a truly “way behind the budget” situation occurs, your appeal may then find resistance or giver fatigue from people saying, “but we just went through that!”
  • A church allocates the line-items based solely on previous year data. This approach is better than dividing the line items by 12 months. However, it falls short of sound allocations because it fails to take into account changes in circumstances for the current year. There may be changes in one-time or cyclical program expenses, such as new or increases in line items that are effective only for part of the year. Suppose last year’s women’s retreat was in the spring and this year moves to the fall. If you don’t reallocate your budget, you might unwittingly spend any spring excess and get caught short in the fall.
  • Budget allocations do not match where expenses are charged. When the budget was adopted, there was an expectation that certain expenses would be charged to particular expense accounts. However, there is a significant mismatch on the charging of some large expenses. Therefore, some categories show major variances only because the budget dollars are on one line and the actual expenses are on another.

What can happen if your budget is not properly allocated?

Here are just two unfortunate decisions that could be made from the report based on poor allocations:

  • Programs are started and jettisoned based on poor information. A new ministry to millennials was started at the beginning of the new church year. Because the comparative data outlook is so gloomy, the church board decides to temporarily stop the new program until finances improve. By the time the accurate data is available, the church restarts the program, but considerable momentum is lost because of starting, stopping, and restarting the program.
  • Staff are hired or terminated based on poor allocations. Based on the inaccurate data at the six-month point, the church board reduces two full-time staff members to half-time and eliminates four part-time positions. A few months later, the church board realizes it took these extreme actions based on faulty information.

Don’t live with your bad budget allocations for the entire year! Read more in this article from ECFA President Dan Busby. (Published in The Church Network inSight Journal - Summer 2018.)

Monday, June 11, 2018

Church Reporting Refreshers

Proper church reporting really matters, and we’re here to help make sure your church does it right. This snapshot from the 3 Church Reporting Refreshers Podcast features some of the most common mistakes made by churches in respect to compensation paid to employees. Catch these at year end before the W-2’s are filed to avoid complicated filing territory later on.

Top 4 Common Compensation Reporting Mistakes

  • Failure to report taxable fringe benefits and social security reimbursements as taxable compensation on the form W-2. Retirement contributions, automobile allowances, and other fringe benefits must be properly reported as taxable compensation to avoid underreporting.
  • Reporting social security and Medicare wages and withholding in boxes 3, 4, 5, and 6 of the form W-2 for pastors. Pastors are always subject to SECA-type social security (never FICA) which is calculated on the Schedule SE. If you have social security data in these boxes on the W-2, the incorrect type of social security has been filed.
  • Failure to report non-cash compensation as taxable compensation on form W-2. This includes gift cards and other benefits given to a pastor. They are seen as taxable compensation in exchange for services rendered.
  • Including a designated housing allowance as taxable compensation in box 1 of Form W-2. The housing allowance is typically fully taxable for social security purposes, but tax-free for income tax purposes. 

Catch the full podcast for further discussion and companion resources to help you excel in church administration:

Monday, June 4, 2018

What's Happening With the Housing Allowance?

After a few quiet years, a new case is challenging the constitutionality of the minister’s housing exclusion. With recent legal challenges to the housing exclusion, many church leaders are asking: “What’s happening with the housing allowance?”

Under the current law, here are the three major housing exclusion traps to avoid:

  • Trap #1: Wrong workers claiming a housing exclusion.

Being a minister does not automatically entitle someone to this tax benefit. Generally, there are four factors that need to be considered: Does the individual perform sacerdotal functions such as marriages or funerals? Are they considered to be a religious leader by a church or association? Are they conducting religious worship? Are they carrying out management responsibilities in the control, conduct, and maintenance of the local church or an association of churches? For a qualified minister, these functions would be written as part of their official job description. There needs to be a legitimate reason for appointing a housing allowance besides providing a tax break. When in doubt about qualifications, bring in a professional who is experienced in ministerial taxes.

  • Trap #2: Wrong amounts excluded from tax.  

This happens when a pastor fails to exclude the correct housing exclusion limitations. Firstly, for church-provided housing, the lowest of either the actual housing expenses or the amount prospectively and officially designated needs to be applied. In the instance of minister-provided housing, the same two amounts must be considered, as well as the fair rental value of the furnished home plus utilities. The failure to apply these limitations could result in underreported income and underreported taxes due.

  • Trap #3: Wrong action by the employer related to the housing exclusion.

In order for a minister to receive a housing allowance, it must be properly designated from the minister’s salary by the church or other employer. The top two mistakes occur when no official action is taken by the employer at all, or the action is not done in a timely fashion. The allowance itself must be officially designated by the church in writing and approved by a governing body. It must also be made ahead of time by the employer. Any payments for housing made prior to a designation are fully taxable for income tax purposes. It is helpful to carefully word your housing allowance resolutions to remain in effect until a subsequent resolution is provided.

Tune in for more discussion of the developing story here:

Monday, May 28, 2018

Stories of Enhancing Trust - Ron Blue Institute

Starting a Stewardship Ministry

Our relationship with money has a significant impact on our relationship with God and others. However, at the mention of finances, our first instinct is to make a polite yet speedy departure. We can’t afford to let something that touches nearly every aspect of our lives to go unaddressed in church. Michael Blue, Executive Director and General Counsel of the Ron Blue Institute, joined us on an ECFA podcast with tips for forming a stewardship ministry in your church.
  1.  Start at the top. Whoever is in charge for setting the direction of the church needs to be on board. To flourish, the spirit of this ministry needs to filter down from the top leaders into every other ministry.

  2. Identify a stewardship leader and begin to build a team. These people will lead in ways that others can’t, so don’t be afraid to ask about spiritual and financial maturity. People can be trained in technical aspects, but more important is a heart for generosity.

  3. Celebrate simple acts of generosity. Whether in a staff meeting or in church, give people an opportunity to see what it looks like to live a life of stewardship. Stories and testimonies can provide vital encouragement.

  4. Have a church-wide event to kick it all off. Start a sermon series or a bible study. Look for further opportunities to integrate the ministry throughout the church.

  5. Measure success in ways that matter. The most obvious standard is, of course, giving. However, that is a dangerous metric. Measure your stewardship ministry’s success as you would any other discipleship ministry: by hearts aligned with God’s in finances, spiritual maturity, and growth- not dollars coming in the door.
We want the church to be seen as the center of financial wisdom. For that to happen, we need to be willing to talk about it, and be able to speak from a position of confidence. A healthy stewardship ministry will minister to people on all levels, from struggling to surplus. The goal is to impart a biblical understanding of stewardship and create lasting change within people’s hearts.