the kittye susan trent symposium for newly ordained ministers 2011

Budgeting, Financial Management and Stewardship Church Business Administrators Certification Program 2007

2011Second Presbyterian ChurchPhillip S. Boggs 1

The Kittye Susan TrentSymposium for Newly Ordained Ministers 2011Phillip S. Boggs, FCBA, FPCBA

Church Business AdministratorSecond Presbyterian Church214 Mountain Avenue SWRoanoke, VA 24016

540 343-3659 (work)540 815-9425 (cell)540 345-2747 (fax)[email protected]


All Things FinancialMy objectives for you in this lecture

Share some Phil-los-o-free of Stewardship, Budgets and Church Administration

Give you some specifics of things that keep you and the congregation and the session informed, including examples of FormsGraphsSummaries


The Church Business AdministratorThe CBAs job is to guide the congregation through the process of financial stewardship, budget preparation and monitoring.She or he is the tour guide for the congregation.She or he helps the congregation understand how money can be put to use.


Talk OutlineThe Most Important Thing (very, very brief)Stewardship (very brief)Budgeting and Financial ManagementCapital Campaigns and Fund RaisersInvestments (Designated Funds) and EndowmentsMonitoring and Tracking

4The Most Important ThingYou MUST file an Income Tax Return EVERY year.Is this clear?I WILL NOT come to visit you in IRS jail.See next page for more info.Getting IRS Form 1040-ES is left as an exercise for the student (12 pages).Second Presbyterian ChurchPhillip S. Boggs 5


Vital Elements in Stewardship PlanningYear round stewardship planning and promotionCongregation involvement and ownershipPastoral commitment and leadershipWe should preach:Give first, then you will be interested (in the church)All of the money is Gods anyway Give, your heart will followTalking about My Money is the current American Taboo! We never talk about our personal moneyStewardship is Good News Tell me the old, old story, then:Tell me the new, new story of what we are doing now (mission, etc.)


Developing a Funding StrategyWhy talk about money?Why not? Jesus talked about money.Recognize the needs of the giverAffirm that the mission of the church is largely one of stewardship.Stewardship is the whole of life, the whole of the church. (What are you doing with what God gave you?)The church/world needs for me to be a good steward.Giving is a means of spiritual growth.God does not need your money. He will do what He wants to do. YOU need to give.


Developing a Funding Strategy (cont) Why do people give?Give because you love and are lovedFearHateEmulation of competitionGuiltGratitudeTax DeductibleRecognitionIn response to being askedTo controlDuty or responsibilityTo receiveBeen trained to give it awayTo make something happen


Budgeting [1]The budget: bane or blessing?The church never has enough money to do everything that it wants to do. A budget is a means of helping you spend what you do have in a controlled fashion. If youve established priorities, a budget will help you spend it wisely.


Ten Reasons Why Budgeting is Important [2]Budgeting provides a guideline. A budget is not cast in concrete. It is not gospel and it is NOT without error!A budget helps you identify and evaluate where you are (intentionally) deviating.Formalizes planningIf we are mission focusedAllows you to plan creativelyAllows you to kill ineffective programs and ministryReduces emotion-charged discussions

[2] Effective Church Accounting, Richard J. Vargo, Pages 25-28 and The Church Guide to Planning and Budgeting, Richard J. Vargo, Pages 20-24


Ten Reasons Why Budgeting is Important (cont) [2]Is a basis for performance evaluation and review of programsIs a basis for controlAssists in communication and coordinationGets members involvedBudgeting should not be just for the staffIncreases the commitment to givingPeople want to know where the money goes.


Ten Reasons Why Budgeting is Important (cont) [2]Generates confidence in the churchs leadershipAllows for continued operation when cash receipts and disbursements are mismatched.How do you get through the low income months (in the summer)?See next two cash flow chartsAllows time to lend or borrow prudently.See next two cash flow charts


Expected Cash Flow BUDGET


Actual Cash Flow


Budgeting [1]The operating budgetLook at both Income and Expense. Make sure they match. Dont assume that the congregation can just dig deeper if you get into trouble.


Budgeting [1]The annual budgeting process and timetableCome up with a reasonable scheduleHone the schedule and process each year Example schedule from Second Presbyterian Church - budget schedule example


Budgeting [1]Games people playThe foot in the door game. (Low costs now, big cost later.)Getting the Pastors blessing game (The Pastor said he wants this. Difficult being objective about this item.)Implied support game (A lot of members want this.)But they do it game. (The church down the street is not us!)The Flood game (Flood the budget committee with an over load of data.)Out of Town ploy. (I was too busy to give you any details on this program.)Weve always done it this way game.

[1] Adapted from The Church Guide to Planning and Budgeting, Richard J. Vargo


Budgeting [1]Conclusions and ObservationsBe flexibleThe budget is not cast in stoneCircumstances during the year may dictate changes that everyone needs to be aware of.


Budgeting [1]Conclusions and Observations (cont)Be realisticGood budgeting can help good leaders to be better. Good budgeting cannot help poor leaders. Leaders that ignore the results of the budgeting process can make the whole process a lesson in futility.


Church Management Systems(Software)Get a good Church Management System (CMS).

TRAIN YOUR STAFF!

My CMS list - Church Management Systems

My CMS - Church Windows


Financial ManagementPrinciples to Build On (a partial list)ConfidentialityIn general most people dont need to know what others give.True or False?The pastor should know the giving habits of individual members of the congregation. This is a spiritual health issue for the pastor.This is a spiritual dimension of life.The CBA should be able to tell the pastor if giving habits change (AT LEAST).


Financial ManagementPrinciples to Build On (cont)True or False?The ruling elders of your church should be regular givers (tithers) to your church?Dont ask a person to speak on stewardship (tithing) unless you know that they give regularly. YOU should not speak on stewardship unless YOU give regularly.


Capital Campaigns A learning experienceShould be done every few - years.Sources of money for givingMoney comes from accumulated wealth (and partially income).InvestmentsI had a part in creating something great. (bigger than myself.)


Capital Campaigns (cont)Stewardship vs. fund raisingStewardship Consider our continuing commitment to the church.

Capital Campaigns Aimed at a specific objective.

You may be surprised who gives.


Capital Campaigns (cont)Raising MoneyBe sure to challenge or ask for some special dollars from some individuals.You can never ask for too much. You will not offend by asking for too much.If the church doesnt ask for (capital) funds, then someone else will! (The symphony, the zoo, the art museum, etc.)


Capital Campaigns (cont)Education, education, education help people understand how they can give.Charitable remainder trusts, etc.Life insurance programs.Get a local attorney involved.

Get help from a professional, RSI Inc., IMPAC Services, etc.


Fund Raisers(as opposed to Capital Campaigns)Should be of short duration.Should be aimed at a specific need.Should be approved in advance by the Finance Committee and Session.Raising funds outside of a prescribed process should be discouraged.In advance, identify what happens If you dont raise enough money.If you raise too much money.Examples: defibrillator, commercial kitchen mixer.

27Establish a Designated Funds StrategyFocus on Ministry (the church is not a bank)Figure out what you have nowStart you first fund with $25Establish a default fundCommunicate, communicate, communicateTell how easy it is to giveThank you notesPublish who gave in memory of ..Wills Emphasis SundayThink aboutWhat gifts will you not accept?What entry gift will establish a new fund?Second Presbyterian ChurchPhillip S. Boggs 28


Investments and Endowments (Designated Funds)Strategy (continued)Create your own CLEARLY WRITTEN Investment Policy, Spending Policy and Conflict of Interest Policy.Hire an investment firm that can work within these policies.Minimize speculation (gambling).Consider the Presbyterian Church Foundation http://www.presbyterianfoundation.org/


Investments and Endowments (cont)PoliciesWrite them down!Give them wide distribution.Answer questions such as:Why was the endowment established?What is it to be used for?How is it to be invested and by whom?Who makes decisions about distributions?


Investments and Endowments (cont)ProceduresWrite them down!Give them wide distribution.Answer questions such as:How is money requested?What documentation is required and kept?Who needs to approve the request?Who else should know about the request?


Monitoring and Tracking Monthly reportsTo sessionPhil's Treasurer's ReportIncome Graphs (follow) Budget WatchBudget Watch Graph for Newsletter (follows)To committee headsMonthly report to Christian Education


Cumulative Income Compared to Budget


Monthly Income Compared to Budget


Budget Watch Graph for Newsletter


Monitoring and Tracking (cont)Putting it all together for the sessionHandout Summary for Session MeetingLast years bottom lineBudget Summary for Last YearStewardship resultsBudget and Stewardship ScheduleGraph (follows)Email Summary of the Stewardship CampaignAnnual Report Summary of Stewardship Campaign


Stewardship Results


Monitoring and Tracking (cont)Putting it all together for the session (cont)Next years budgetBudget at a GlancePersonnel Budget at a GlanceOtherAnnual Audit or Review


Annual Audit or Review(a parting shot)Book of Order G-10.0401 dAnnual Audit? Annual Review?

Nothing?

Something Else?


Designated Fund SummaryOne last thing:

Designated Funds Summary


Summing UpTime to STOP!

Questions?


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the kittye susan trent symposium for newly ordained ministers 2011

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