What’s in your wallet (or checking account)

Politician Everett Dirksen is often quoted, “A billion here, a billion there, pretty soon, you’re talking real money.”   But what about trillions?  Like $10.7 trillion?  That’s $10,700,000,000,000.  Americans had $10.7 trillion in their checking accounts at the end of last year, an average of about $3,600 per account, an increase of about $1,000 over the last ten years.  All of this according to the Federal Deposit Insurance Corporation study released last week.

All of this totals 77% of all bank assets.  More than three-quarters of what is in the bank is is in checking accounts, providing great liquidity but not doing much of anything to grow through interest.

I got a call from a pastor last week telling me that he discovered his new church has $86,000 in the checking account.  He thought that seemed kind of high.  I agreed with him.

How much is in your church’s checking account?  A while back I wrote about how to best guess how much you needed to have available.  But today let’s look at the opportunity cost of having that much in your checking account.

So we’ll start with the assumption that the church needs something in the checking account on an ongoing basis, say $30,000, one month’s expenses for this particular church.  That leaves $56,000 to invest.  What will that mean for this church?

Year to date our equity fund has returned 18.7% net of all fees.  It would be a great advertisement for me to show how consistent returns at that level can help a church’s bottom line but the reality is that although I am grateful for those kinds of income they’re really not sustainable.  Instead we’ll go with the five-year average on our balanced fund, 7.7%.

If we take that $56,000 and earn 7.7% each year, that’s $4,300 per year.  Some years that will be more, some will be less, but that is an average.  For a church with a budget of $360,000 this doesn’t seem like a huge amount.  It won’t add a bunch of staff or replace the aging boiler, but I wonder how many members of this church give more than $4,300 per year.  Simply by investing and taking a reasonable payout, this church just added another top donor to its rolls.

That $4,300 could provide seed money for a new outreach ministry, paint the walls in the Fellowship Hall where the youth group meets every week, send kids to camp or provide seed money for a mission trip.

With the benefit of being able to expect a comparable return year after year.

I often hear that the church “can’t be too careful with money that isn’t ours.”  I agree but you need to not only consider the investment risk but also the lost opportunity.  Would you really tell a donor who offered you $4,300 that you don’t need the money?  If not, why would you tell that to your checking account?

Four thousand here, four thousand there, pretty soon, you’re talking real money.

Be The Good When the World Desperately Needs It

I had one of those weekends when apparently divergent messages come together and it all just kind of clicks.  On Saturday my daughter Emily was wearing a t-shirt with the graphic above, the one that encourages us to Believe There is Good in the World and at the same time to Be The Good.

Then on Sunday I read an article in USA Today about the State of Hate in America.  The article talked about a KKK rally Charlottesville, Virginia, where about 50 Klansmen came from out of state to protest the removal of a Civil War era statue of Robert E. Lee.

Be The Good vs. Be The Hate seems to be a common thread in our society these days.

I read a bit further into the USA Today story and learned that along with the 50 protesters that day were about 1,000 counter protesters.  While it’s impossible to know the motivations behind everyone there, it would appear that in the face of hate 20 times as many people chose to be the good.

By my estimation good won.

Groups like the Southern Poverty Law Center and the Anti-Defamation League suggest that hate crimes are up about 6 percent over a year ago.  I wish that wasn’t so, but neither or nor the Church can stop these from happening.  Just as no one could stop the Klan from coming to Charlottesville.

But we can decide how we are going to witness in such a time.  How do we as a church respond in such troubled times?

Especially when so much of that same division is happening under our own tent?

The answer, according to that t-shirt is to be the good.  Cause you know what, we should be doing that anyway.

When is the last time your community saw your church Being The Good outside your building?  I think this summer is the perfect time for you to feed people, help people, encourage people.  Whether you’re counter protesting hate or handing out a cold bottle of water along your town’s parade route, go out there and be good.  Go out there and Be The Church.

Call the Urban Mission in Steubenville, the Nehemiah Mission in Cleveland or the United Methodist Community Center in Youngstown and ask them if they have people that your church can show some love to.  I bet the answer is in the affirmative.

Read Matthew and figure out who in your community is the Canaanite Woman, the Boy With the Demon, the thousands who needed feeding.

Then go be the good, the good that these individuals need, the good that your community needs to be and, quite frankly that you need yourselves to be to truly call yourselves Disciples of Christ.

I’d love to read in the USA Today an article about the State of Love in America.

 

 

 

Why 25 may be better than 5

When I work with churches to set up or revise their endowment funds, I usually suggest a 5% spending policy:  take the value of the fund on September 30 each year and make 5% of that available for the following year, or some similar formula.

I think this is the best approach, except when it isn’t.

You may want to consider a 25% spending policy sometimes.

The 5% rule works because long-term you should expect to make a bit more than 5% on your endowment fund, so if the market is good and you make 8%, spend just five.  But in a bad year if it makes 3%, still spend five and know that it will all even out.

The good news is that this way the fund should last forever, as all good endowment funds should do.  The problem, of course, is that if you have $1,000, you only get $50 each year.  Spending 25% can be far more fruitful than spending a fifth of that.

Clearly this is best done with something other than a formal endowment fund.  If you have a fund that allows the principal to be used for new programs, or special priorities in the church, it can be  far more effective if it is used heavily, but for a shorter term.

I’ve always been hung up on the phrase “A ship in harbor is safe, but that is not what ships are built for.”  Too often we are more concerned with a fund lasting forever while the church around it is failing.

If you can spend a fund a bit more aggressively and have it positively impact the future of your congregation and its ability to reach the community as a mission outpost, then I say that money is well-spent.

And I always go back to the best marketing for your fund is for people to see it in use, let them understand its role in your ministry.  By showing that a special fund invests 25% of itself in Kingdom Work every can help foster donations from those who want to see that ship leave the harbor.

But a couple key points:

  • First, everyone needs to know that this is the rule.  Raising an endowment fund with the promise of it lasting forever, then spending it in just a few years violates the trust of those who contributed.  If you are going to start a fund for new ministries and plan to spend 25% each year this must be clearly communicated to those whom you are asking to support it.
  • Second, makes sure you’re not just spending it, but investing it.  By investing I don’t mean buying stocks and bonds I mean investing it in the future of your church.  Things like reaching out in mission, welcoming your community in, adjusting staffing or purchasing equipment to make you more effective missionaries are great examples.  But please don’t read this and use it as a reason to spend long term funds to pay the utilities in an effort to prop up your church for another year.
  • Third, expect results.  What do you think your ROI will be, your Return on Investment?  Too often we in the church spend money with no real hope that things will get better.  Sometimes this is not a surprise like not expecting the choir to sing twice as well if we replace their robes.

As always, if you want to talk such a program through, please let me know.

A Book You Really Must Read

I recently read a book that should be required reading for any good Methonerd like myself.  Reverend Will Cantrell has written Unafraid and Unashamed:  Facing the Future of United Methodism.  It’s a really, really good book discussing the human sexuality issue in the church.

At just 150 or so pages it’s a fairly quick read and brings in what I assume are accurate discussions of scripture, the history of the issue in the church and an honest, accurate summation of the three key sides in the conversation:  traditionalists, progressives and centrists.

He speaks of Nineveh, a broken communion chalice in Pittsburgh, and Moses taking advice from Jethro.

My favorite quote:

if we approach diversity with fear, we will reach a predictable outcome.  We will continue to accuse those who see things differently as ruining our denomination.  We will befriend and dialogue with only those who agree with us.  We will think of those with different viewpoints as something less than Christian, and less than intelligent. We will approach all denomination decisions with the intent to acquire the maximum amount of power for those who share our point of view.  With fear guiding us, a schism is not only probable, it is assured.

Maybe you read that and thought, “Yes, he clearly agrees with my side.”  But in this masterfully written book you will notice that he takes no sides, offers no fodder for proving that WE are right on this issue and THEY are wrong.

Instead he challenges to see through the issue and focus on us remaining united.  You know, like A Way Forward.

At a time in our society when two sides can’t talk about anything Rev. Cantrell calls us to be above that, to be people of faith and courage, to exemplify scriptural holiness.

The battle for the soul of United Methodism will not be fought against other United Methodists of differing perspectives…  It will be a struggle between the power of fear and the power of faith.

You can pick up a copy from Amazon for about $17.  Spend a few hours with it, then a few more discussing with others in your circle.  I ordered it thinking it would be great for a church-wide study but instead think it’s a great conversation starter for those already aware of the issues facing our church.

Reasons to have a capital campaign

I had a call from a pastor friend last week.  He thought we were going to talk about bequests and endowments.  We ended up talking about a capital campaign.  That was my fault.

He called me excited that a member of his church had left a six-figure gift in her will.  This is a church with attendance in the 150 range and up until a few years ago consistently finished the year in the red.  This was a big gift for them.

He said they intended to add most of it to their permanent endowment fund that I had made many trips to his church to help them establish.  He explained that they would need to take about a third of the total to spend on capital improvements.  I often hear this and don’t necessarily think its a horrible idea.   And the he said it:

“We won’t have to have that capital campaign we were planning.”

You know that sound of a needle suddenly being yanked off of a record?  That was my response.

His position was that if they had the money from another source, they need not have the campaign.  Why would they go through that if they didn’t need to.

As we talked I began to develop a list of 3 reasons to have a capital campaign.

  • A capital campaign is a great way to challenge your congregation for their giving to grow.  I have no doubt that many of your members are still giving the same number of dollars they were five years ago, maybe ten or more.  The good news is that they are giving.  The bad news is they are in a rut.  A capital campaign rooted in vision and presented authentically can help your people get out of that rut and, in most cases, have a very visible, tangible benefit of their giving.
  • A capital campaign gift provides a tangible buy-in to the vision.  Church meetings and post meetings in the parking lot are full of folk saying that the church should do this or that. But there is a difference between saying that someone should do something and actually stepping up to the plate and paying for it.  Good stewardship says that if it isn’t important enough for the congregation to pay for, it isn’t important enough for other church funds to be used.
  • A successful capital campaign will preserve the bequest for future ministries.  The bequest the pastor had called about could support the church’s ministry ad infinitum.  It would have been between five and ten thousand dollars each year, if the church used a 5% spending policy.  Under current giving patters, it would been the largest single contribution to the church each year.  But if you lop a third or a half off of the principal that annual gift shrinks along with it.

Unfortunately many churches avoid capital campaigns like the plague.  Lay folk are afraid they’ll be expected to give and many pastors don’t know much about campaigns.  Taking money out of the endowment or using other sources of “found money” is certainly the path of least resistance.

In a capital campaign one goal is certainly enough money to refurbish the bathrooms or fix the roof.  But the three goals above are, in my opinion, far more important.  New carpet and drapes are good things, disciples who have moved further along their journeys are far better.

By the way, if you’re considering a capital campaign in your church but aren’t sure of the details the book,  Extraordinary Money:  Understanding the Church Capital Campaign by Michael Reeves is a great resource.  I have a bunch of copies in my office and I’d be happy to send one your way, just email me.  

Photo credit:  Diocese of Paterson, NJ.

Of Methodists, hurricanes and you

As I watch the news about the impending invasion of Hurricane Matthew on the southeast United States, two memory tracks come to mind.

The earlier of the two was in August of 1995 when we were vacationing in North Carolina and Hurricane Felix was a threat.  We were highly encouraged to evacuate and had every intention of doing so, once the huge traffic jams trying to leave the island waned.  The good news is that Felix headed back out to sea and we were able to stay put, giving us the unusual experience of empty beaches and amazing surf.

The second was far different.  In October of 2005 I led a team of about a dozen of us to Mississippi after Katrina.  We worked well north of the coast, cleaning up downed trees and such.  But we had the chance one day to go to Bay Saint Louis and nearby Waveland, where the eye came ashore.  The destruction was amazing.  But more amazing was to see UMCOR set up in the yard of Main Street  UMC in Bay Saint Louis.  The church was next to the massive county courthouse, which sheltered the church from the wind and largely protected it from damage.

The church was a refuge, a place where volunteers were housed and dispatched; food, water and flood buckets were distributed; prayers were offered and tears were shed.  It was a powerful experience, one that I doubt I shall forget.  You can read more about that experience in this post from a few years ago.

That church was a mission outpost because of the people in the pews across United Methodism.  They donated flood buckets for the clean up.  They donated money to buy food and water.  They offered up prayers that came back down to that community.

Because of that generosity the United Methodist Church offered to hope to a hopeless situation.

It was church.

My prayer for Hurricane Matthew is that it takes a hard right, goes out to sea and leaves those communities on the Atlantic with a Hurricane Felix experience.  Telling stories about evacuating for no good reason.  My second choice is that what I saw in Bay Saint Louis is repeated again and again and again up and down that coastline, that with your support UMCOR is able to minister those facing this disaster.

Matthew, of course is a Biblical name.  The Gospel of Matthew shows us how the early church was grown.  Time after time Jesus reaches out to those in need, ministers to them, they go back and tell their friends and a crowd grows to hear Jesus preach.  Sounds to me like Hurricane Matthew could be a great chance for some Gospel of Matthew experiences.

If you want to help, the good folks in East Ohio Communications make these suggestions:

You may support ongoing training, response, and relief by making a donation payable to your local church. Those donations will be passed from your church treasurer to the annual conference treasurer and then onto the fund of your choosing.

Please include on the memo line of your check the number of the fund below to which you wish to make your donation:

Fund EOC9046 – East Ohio United Methodist Volunteers in Mission (UMVIM)

Fund 901375 – North Central Jurisdiction UMVIM

Fund 901670 – UMCOR U.S. Disaster Response

Fund 982450 – UMCOR International Disaster Response

We can’t make the hurricane head back out to sea, but we can make sure that the great folks at UMCOR have what they need to be the hands and feet of God.  Please be part of that.

 

Why pledging is so very important, and why it’s not at all.

Sometimes I talk about how critically important it is for your members to pledge.  At other meetings I talk about why it’s not important at all, sometimes in the same church.

The difference is which committee I’m talking with.

The stewardship committee should emphasize pledging.  A pledge represents a goal, a decision made in advance.  Any successful business leader will tell you that you must start out with a goal, preferably one that challenges you.

In my stewardship work I often challenge parishioners to determine what percentage of their income they are currently giving to the church, then to increase it one percentage point each year until they reach a tithe.  In spirituality and discipleship conversations pastors often challenge members to grow their giving as their relationship with God has grown.  It is these discussions and journeys that lead to tithing.

These are times with a pledge is critically important to reaching that goal.

But the group that I tell not to emphasize written pledges is the Finance Committee.  In my years at the Foundation I have only known of a single church that added up all the pledges in November and used that as their income number for the following year.  A balanced budget meant that they could never plan to spend more than the total of the pledges.  Incidentally this led the church to a very tight budget each year, which always ended in a significant surplus around Christmas time.

Nearly all of the churches I have worked with base the income on some historical figure.  Often it is last year’s total giving number, or an average of the last several years.    Sometimes to make the budget work they fudge a little, the previous year plus three or five percent.  All of these can be effective approaches to a number that is always uncertain.

Cleveland weatherman Dick Goddard once compared predicting lake effect snow to “stapling Jell-o to a wall.”  That analogy fits here as well.

So why should Finance Committees nag members to complete a pledge?  Younger generations don’t like to pledge, and generally don’t.  Folks whose jobs are uncertain, or are predicting other significant changes in their lives may hesitate to write down a number as well.  So why don’t we just show them some grace?  If Bob and Mary give $X per year, we can reasonably expect that they will continue to do so, or something close, whether they give us a pledge card or not.

While I think it is imperative that we teach all generations, especially young generations, about giving and tithing, this should come from a generosity point of view, not a church-needs-the-money place.

So in your stewardship campaign, continue to offer pledge cards as a way for your members to set a goal for themselves, or even make that commitment to the finances of the church.  But don’t clobber anyone over the head if they’re not willing to do so.  Keep them engaged, keep them on a discipleship path and let them reach that place as part of a greater journey in their lives.

A few more stories to tell

So you’ve read that the pastor should tell his giving story and you read Bishop Tracy S. Malone’s giving story.  Let’s talk stories for one more week, because there are other stories to tell (see page 569 in the hymnal if you’re so inclined).

When it comes to having people testify in worship or witness in worship, it can get a bit dicey.  A 90 second announcement quickly becomes a five-minute soliloquy.  Lots of experts suggest having these videotaped and put on the screen on Sunday morning.  While it’s certainly true that this gives greater control over the story it adds a whole lot of logistical work.  If you’re staffed to do this, by all means record it.  If not the pastor or worship leader interviewing the volunteer can help as well.  But don’t get bogged down, personal stories are so very effective and should be used more often.

I imagine that after the pastor told her story, others in the congregation began offering their own stories in response.  Has your congregation heard those stories?  Pick out one or two and have them told in worship.  My preference would be someone whose story mirrors the behavior you want to see from others.  A casual giver who has a spiritual awakening and begins to tithe is great.  If you’re a prosperity gospel church and you have a member who was richly blessed after discovering generosity, then by all means tell that story.

I want to hear the story of the church member whose life was changed by the church.  I heard one several years ago from a lifelong member of the church.  A closet alcoholic, he had gone out to drink his lunch and when he came back to work the boss met him at the door and confronted him.  The boss delivered him to the church where he began counseling with the pastor, the wife was brought into the pastor’s office and was made aware of the situation.  The pastor did a great deal of counseling and referred them both for additional help. The man testified that without the church he probably would have lost his marriage, his job and their home.  That’s powerful.

One that is tougher to find is the non-church person whose life has been changed by your congregation.  Who has your mission team served?  Who is a regular client at your food pantry, clothing program or hot meal ministry?  What wayward teenager was brought to church by a friend and was redirected to the right path?  How about a single mom who was afraid and alone but found peace and community under your steeple?

As you plan your campaign I suggest one of these each week leading up to Commitment Sunday.  Alternatively you could put all of them together as the message one week.

Your church is changing lives, thanks to what is going into the offering plate.  Make sure your people hear these stories, and after they hear them be sure you are making the connection back to their giving.

Bishop Malone’s Giving Story

Last week I encouraged pastors to tell their giving stories as they kick off stewardship season.  We are grateful to Bishop Tracy S. Malone for sharing her own giving story.  Joining her in the  photo above are her husband, Derrick, and daughters, Ashley and Alexis.

 

I grew up in a Christian home where I was taught to thank God for everything. I was taught to never take life for granted because tomorrow is not promised.  I would pray and thank God for everything. I learned to have a grateful heart.

I was taught to give God my best. I was reminded that God loved us so much that He gave his Son, Jesus Christ, and he came into the world so we may have life and have it more abundantly. Therefore, I should offer God nothing less than my very best of who I am and what I have.

As I grew into my teen years I developed a deeper understanding of my faith, learned about what it meant to be a good steward and learned the importance of tithing.

My parents expected me to be a good steward by being active in the church. When I became of age I got a job and this is when I learned about tithing.  When I received my paychecks, my parents made me give 10% of my total check to the church. The remaining half went in the bank and the other half I could keep. What a challenge! It was one thing to understand stewardship and tithing but putting it into practice was more than a notion. I learned to find joy in giving.

When I got married I wanted to continue being a tither. My husband was not raised in the church and tithing was a new concept for him. I knew I would need to be patient and give him time to make such a commitment. We did make a commitment to give tithing a try. It was a step of faith!  All things were going well and then we found ourselves being tested. My husband’s employer closed his business. This impacted our income drastically until my husband found other work. But by the grace of God, remained faithful and God provided just as God promised. We are living witnesses that tithing is both an act of stewardship and an act of faith. We have been tithing ever since.

We have two daughters and have taught them the importance of stewardship and tithing. Whatever the source of their income, allowance or other earned money, they are expected to give a tithe to the church. When they were younger we gave them money to put in church to give them the practice of giving. But now they’re older and have their own source of income, it gives me great joy to see the joy in them as they place their offering in the plate. It is my hope and prayer that our daughters will always have joy in giving, serving and leading in the church.

Sometimes, as a people of faith, we forget that all we have belongs to God. We fall into the temptation of feeling entitled to have it all and keep it all. I have learned that the more you give away the more you make room to receive. And blessings come in many forms.

We are all called to be faithful stewards. A faithful steward is one who recognizes everything belongs to God (Psalm 24:1). A faithful steward is one who gives a portion of their money, possessions, time and talents to God.  A faithful steward is one who is intentional in giving their best and their first to God.

Stewardship is a matter of faith. Generosity is an act of faith. Tithing is a journey of faith.

 

What’s this for, anyway?

A few weeks ago I was in an investment seminar and the speaker suggested starting every meeting with account holders by asking each person in the meeting to write down an answer to a simple question:

“What is the purpose of this pool of money?”

At home that’s an easy question, many of us have funds to pay for college, retirement or just in case.  And if we can choose those funds can change purposes as needed.  But church funds aren’t always that clear cut.

I have seen lots of accounts with clear-cut policies, names like “organ repair fund” and committees with a common vision for how the money can be used.

But I have also seen “Rainy Day Funds” that haven’t been touched in a decade or more.  I guess it just doesn’t rain at that church.  Or funds whose purposes don’t seem all that relevant any more as the church has evolved but the fund hasn’t.

Understanding the purpose is significant for a couple of reasons.

First, it may guide investment decisions.  A fund that will be needed six months from now to pay for a renovation should be invested conservatively, protecting it from usual market fluctuations that Murphy’s Law dictates the market will be in a slump when the money is needed, then recover fully just a day or two after the withdrawal.  But a rainy day fund that may sit in the market for another decade would be able to swallow several market cycles, perhaps suggesting that it can be invested more aggressively.

Second, it is critical to know what a fund should be spent on.  The donor or church leaders developed a fund to serve a purpose, like supporting missions or repairing the church building.  We need to know that this money is available for such purposes.  It would be a shame for a fund to go unused while the church is struggling to pay for things that the fund was intended to support.  I know, this sounds strange, but I have seen it happen.

Third, it is equally critical to know what a fund should not be spent on.  If the music fund policy says it can only be spent on sacred, traditional music then you cannot buy a new drum set with it, no matter how badly Ringo needs new ones.  Endowments should not be used to pay salaries, utilities and other normal operating expenses.

The key to all of this, of course, is a good fund policy.  You need one for each fund and they need to be updated.  If you don’t have policies, shoot me an email and I will be happy to send you a sample to help get you started.

 

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