The Kittye Susan Trent Symposium for Newly Ordained Ministers 2011

1. The Kittye Susan TrentSymposium for Newly Ordained Ministers2011 Phillip 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)admin@spres.org Second Presbyterian Church Phillip S. Boggs

2. All Things Financial • My 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 • Forms • Graphs • Summaries Second Presbyterian Church Phillip S. Boggs

3. The Church Business Administrator • The CBA’s 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. Second Presbyterian Church Phillip S. Boggs

4. Talk Outline • The Most Important Thing (very, very brief) • Stewardship (very brief) • Budgeting and Financial Management • Capital Campaigns and Fund Raisers • Investments (Designated Funds) and Endowments • Monitoring and Tracking Second Presbyterian Church Phillip S. Boggs

5. The Most Important Thing • You 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 Church Phillip S. Boggs

6. Vital Elements in Stewardship Planning • Year round stewardship planning and promotion • Congregation involvement and ownership • Pastoral commitment and leadership • We should preach: • Give first, then you will be interested (in the church) • All of the money is God’s anyway • Give, your heart will follow • Talking about “My Money” is the current American Taboo! We never talk about our personal money • Stewardship is Good News – Tell me the old, old story, then: • Tell me the new, new story of what we are doing now (mission, etc.) Second Presbyterian Church Phillip S. Boggs

7. Developing a Funding Strategy • Why talk about money? • Why not? Jesus talked about money. • Recognize the needs of the giver • Affirm 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. Second Presbyterian Church Phillip S. Boggs

8. Developing a Funding Strategy (cont) • Why do people give? • Give because you love and are loved • Fear • Hate • Emulation of competition • Guilt • Gratitude • Tax Deductible • Recognition • In response to being asked • To control • Duty or responsibility • To receive • Been trained to give it away • To make something happen Second Presbyterian Church Phillip S. Boggs

9. 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 you’ve established priorities, a budget will help you spend it wisely. Second Presbyterian Church Phillip S. Boggs

10. 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 planning • If we are mission focused • Allows you to plan creatively • Allows you to kill ineffective programs and ministry • Reduces 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 Second Presbyterian Church Phillip S. Boggs

11. Ten Reasons Why Budgeting is Important (cont) [2] • Is a basis for performance evaluation and review of programs • Is a basis for control • Assists in communication and coordination • Gets members involved • Budgeting should not be just for the staff • Increases the commitment to giving • People want to know where the money goes. Second Presbyterian Church Phillip S. Boggs

12. Ten Reasons Why Budgeting is Important (cont) [2] • Generates confidence in the church’s leadership • Allows 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 charts • Allows time to lend or borrow prudently. • See next two cash flow charts Second Presbyterian Church Phillip S. Boggs

13. Expected Cash Flow – BUDGET Second Presbyterian Church Phillip S. Boggs

14. Actual Cash Flow Second Presbyterian Church Phillip S. Boggs

15. Budgeting [1] • The operating budget • Look at both Income and Expense. Make sure they match. Don’t assume that the congregation can just dig deeper if you get into trouble. Second Presbyterian Church Phillip S. Boggs

16. Budgeting [1] • The annual budgeting process and timetable • Come up with a reasonable schedule • Hone the schedule and process each year • Example schedule from Second Presbyterian Church - budget schedule example Second Presbyterian Church Phillip S. Boggs

17. Budgeting [1] • Games people play • The “foot in the door” game. (Low costs now, big cost later.) • Getting the Pastor’s 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.) • “We’ve always done it this way” game. [1] Adapted from The Church Guide to Planning and Budgeting, Richard J. Vargo Second Presbyterian Church Phillip S. Boggs

18. Budgeting [1] • Conclusions and Observations • Be flexible • The budget is not cast in stone • Circumstances during the year may dictate changes that everyone needs to be aware of. Second Presbyterian Church Phillip S. Boggs

19. Budgeting [1] • Conclusions and Observations (cont) • Be realistic • Good 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. Second Presbyterian Church Phillip S. Boggs

20. Church Management Systems(Software) • Get a good Church Management System (CMS). • TRAIN YOUR STAFF! • My CMS list - Church Management Systems • My CMS - Church Windows Second Presbyterian Church Phillip S. Boggs

21. Financial ManagementPrinciples to Build On (a partial list) • Confidentiality • In general most people don’t 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). Second Presbyterian Church Phillip S. Boggs

22. Financial ManagementPrinciples to Build On (cont) • True or False? • “The ruling elders of your church should be regular givers (‘tithers’) to your church?” • Don’t 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. Second Presbyterian Church Phillip S. Boggs

23. Capital Campaigns • A learning experience • Should be done “every few - years.” • Sources of money for giving • Money comes from accumulated wealth (and partially income). • Investments • “I had a part in creating something great.” (bigger than myself.) Second Presbyterian Church Phillip S. Boggs

24. Capital Campaigns (cont) • Stewardship vs. fund raising • Stewardship – Consider our continuing commitment to the church. • Capital Campaigns – Aimed at a specific objective. • You may be surprised who gives. Second Presbyterian Church Phillip S. Boggs

25. Capital Campaigns (cont) • Raising Money • Be 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 doesn’t ask for (capital) funds, then someone else will! (The symphony, the zoo, the art museum, etc.) Second Presbyterian Church Phillip S. Boggs

26. 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. Second Presbyterian Church Phillip S. Boggs

27. 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 don’t raise enough money. • If you raise too much money. • Examples: defibrillator, commercial kitchen mixer…. Second Presbyterian Church Phillip S. Boggs

28. Establish a Designated Funds Strategy • Focus on Ministry (the church is not a bank) • Figure out what you have now • Start you first fund with $25 • Establish a default fund • Communicate, communicate, communicate • Tell how easy it is to give • “Thank you” notes • Publish “who gave” in memory of ….. • Wills Emphasis Sunday • Think about • What gifts will you not accept? • What “entry” gift will establish a new fund? Second Presbyterian Church Phillip S. Boggs

29. 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/ Second Presbyterian Church Phillip S. Boggs

30. Investments and Endowments (cont) • Policies • Write 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? Second Presbyterian Church Phillip S. Boggs

31. Investments and Endowments (cont) • Procedures • Write 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? Second Presbyterian Church Phillip S. Boggs

32. Monitoring and Tracking • Monthly reports • To session • Phil's Treasurer's Report • Income Graphs (follow) • Budget Watch • Budget Watch Graph for Newsletter (follows) • To committee heads • Monthly report to Christian Education Second Presbyterian Church Phillip S. Boggs

33. Cumulative Income Compared to Budget Second Presbyterian Church Phillip S. Boggs

34. Monthly Income Compared to Budget Second Presbyterian Church Phillip S. Boggs

35. Budget Watch Graph for Newsletter Second Presbyterian Church Phillip S. Boggs

36. Monitoring and Tracking (cont) • Putting it all together for the session • Handout Summary for Session Meeting • Last year’s bottom line • Budget Summary for Last Year • Stewardship results • Budget and Stewardship Schedule • Graph (follows) • Email Summary of the Stewardship Campaign • Annual Report Summary of Stewardship Campaign Second Presbyterian Church Phillip S. Boggs

37. Stewardship Results Second Presbyterian Church Phillip S. Boggs

38. Monitoring and Tracking (cont) • Putting it all together for the session (cont) • Next year’s budget • Budget at a Glance • Personnel Budget at a Glance • Other • Annual Audit or Review Second Presbyterian Church Phillip S. Boggs

39. Annual Audit or Review(a parting shot) • Book of Order – G-10.0401 d • Annual Audit? • Annual Review? • Nothing? • Something Else? Second Presbyterian Church Phillip S. Boggs

40. Designated Fund Summary One last thing: Designated Funds Summary Second Presbyterian Church Phillip S. Boggs

41. Summing Up Time to STOP! Questions? Second Presbyterian Church Phillip S. Boggs

42. Set Up Slide – To Get Everything Working • Adobe • Excel • Windows Explorer • Word Second Presbyterian Church Phillip S. Boggs