5 Powerful Strategies for Your Legal Foundation

Written by Raul Rivera on Oct 08, 2015 in Church Management

Statistics indicate that somewhere between 4,000 and 7,000 churches close their doors every year. Today, we live in an “instant” society, one in which everything had to be done yesterday. And because of this, it is tempting to look at other churches and ministries to see what your church does not have. But that cannot be your focus. The Apostle Paul tells us in 1 Corinthians 9:24 that “in a race everyone runs, but only one person gets the prize”, and therefore, “you also must run in such a way that you will win”;  for winning a race requires purpose and discipline.

Being a pastor and a church planter is much like being a marathon runner. There are goals and objectives that you desire your church to obtain. There is a prize that you see set before your church, but like a marathon runner, whatever that goal or prize may be, you must diligently pace yourself while in pursuit of that prize.

While it is important to establish standards and practices that foster church growth, spiritual development, and community impact as you run the race set before your church, it is also important to establish a strong legal foundation that protects the dream and vision that God has set in your heart.

In this post, I want to share with you five strategies that I believe are essential to your church’s legal foundation, which will help you to run the race with endurance.

Your foundation is important

Ask any professional builder or contractor and he/she will tell you that the most important part of the overall construction process is the foundation. This is simply because any mistakes you make in the foundation will only get worse as you continue to build.

Jesus even uses a parable about the wise and foolish builders to teach us about the importance of foundations. He tells us that when the winds and rain came down and beat upon the house of the man who built his house on the rock, it did not fall because its foundation was built on the rock. By contrast, when the winds and rain came down and beat upon the house of the man who built his house on sand, it fell with a great crash.

With the winds of today’s legislative culture being hostile towards the church, it is important for your church to have a strong legal foundation. This does not mean that your church will never face a “storm”; but, whether or not your church “weathers the storm” will largely depend upon the structure of your church’s legal foundation.

We are going to look at 5 strategies of a strong legal foundation, and as we do so, I want to encourage you to think about the current structure of your church’s legal foundation to see if any “renovations” are needed.

5 strategies to consider for your legal foundation

Each of the five strategies mentioned below are essential components of our StartRIGHT™ Program that 1000’s of churches have used in order to maximize protection while strengthening their foundation.

1. Become incorporated

Many pastors ask us the question, “Why should my church become incorporated?” They have heard from other sources that if they incorporate their churches, then they will become “state churches”. That, however, is simply not true.

There are actually several benefits to incorporating your church. For instance, when your church becomes incorporated, it establishes what is known as the “corporate veil”. The corporate veil separates the actions of the corporation from that of the board members on a personal level. This is especially important if your church was to find itself in a legal situation where, without the corporate veil, members’ personal assets could be at risk.

Another benefit to your church becoming incorporated is that it allows your church to establish important documents such as bylaws, written doctrines, and policies, and it gives your church the ability to ordain ministers. All of these items are important and necessary for your church to function in an ecclesiastical manner.

Finally, when you incorporate your church, you are able to open a bank account for the church. This allows you to deposit the tithes and offerings into the church’s bank account, rather than into a bank account that may be in your name. It is important to note that the church will also need to obtain a Federal Employer Identification Number (FEIN) from the IRS to open a bank account. This number is used to identify your corporation and is needed for business and federal purposes. This number may also be known as a Tax ID Number.

2. Draft bylaws tailored to your church

Most church planters have it in their hearts to start their churches off on the right track. It is important to them to make sure everything is in order with the law, but more often than not, budget dictates that they either turn to their former pastors or to their peers.

This, in turn, results in a “rehashing” of recycled bylaws that pollute the Internet. These recycled bylaws are likely out-of-date and are found lacking the necessary language to withstand today's hostile, legal challenges.

When it comes to preparing bylaws for your church, there are three questions you should ask yourself. They are listed below.

  1. What do I know? There are some things that you already know. You know what God spoke to your heart concerning your church and ministry. You know that God is faithful to lead you through the journey of ministry. You also know that God has called you to the ministry in this period of human history and that working on the legal side of ministry is a valid part of your call.
  2. What do I think I know? Of the three questions, this is the one that most gives us a sense of false security because we think that if our bylaws cover the topics that we have been told to include, then everything must be fine. This question also makes us think that if our bylaws are modeled after a large ministry then they must be good, and there is no further cause for worry.
  3. What don't I know? This is the question that I consider the most important! It is the one that keeps me working late into many evenings researching the changes that affect the world of ministry. This is when relying on the right people matters most. When it comes to ministry bylaws, most pastors would agree that it is always worth the time and investment to seek the expertise of people who know what you don't know.

3. Establish policies and procedures

Leadership requires giving forethought to everyday activities and preparing written policies to ensure a consistent performance of those activities. Why? Because, without established polices, those that serve within the leadership of the church lack the tools necessary to carry out the vision of the pastor. That is often the failing point of ministries. I meet many pastors with great vision but few who know how to transfer that vision from their hearts to the hearts of the people.

A policy is a written, prescribed stance of the church, which dictates the final outcome of decisions that need to be made. The policy does not tell the church the "how to" or the "when to." It simply guides the procedures taken to ensure that the integrity of the church's position on a particular decision is upheld.

4. Become 501(c)(3) tax-exempt

If you do a Google search for “Should churches get 501(c)(3) status?”, Google will give you about 33,200,000 results through which to read. Because there is so much being said about whether or not churches should apply for 501(c)(3) tax-exempt status, it is no wonder that many pastors and church leaders that we speak with have received misinformation about what it truly means to be 501(c)(3) approved. Pastors and church leaders often attend our conference in the hopes of clearing up doubts and questions that they have been riddled with regarding church compliance.

In my firm and honest opinion, I believe that applying for 501(c)(3) status is the best First Amendment defense available to your church. When you apply for 501(c)(3) status, your organizational and governing documents (articles of incorporation, bylaws, written doctrines, etc.) all become a part of your public record.

We can look to the court case Bernstein v. Ocean Grove. Ocean Grove, a Methodist retreat center in New Jersey, was ruled to allow a same-sex marriage to take place at its retreat center because it was incorporated as a secular organization (rather than religious), and did not have any written doctrines. The case may have gone much differently had Ocean Grove properly established itself as a religious entity in its governing documents.

Therefore, when you apply for 501(c)(3) status and have sound religious language in your organizational and governing documents, all of that is included in your public record, giving your First Amendment rights a strong defense.

5. Create an ordination program

Many young ministers believe that they are only able to plant a church if they have either been ordained or licensed as ministers of the gospel. When in fact, one can start a church, establish it on a solid legal foundation, and then become ordained right through the very church he/she has started. The ordination he/she receives from the newly planted church is just as valid as an ordination that an individual may receive from attending a four-year Bible college.

Additionally, many are under the impression that because their churches are new or young, or independent churches, they cannot be ordained through them. However, that is simply not true. At all of our conferences, we teach that it is necessary for your church to create an ordination program. This fulfills the courts’ requirement that any ordination given “be a considered, deliberate, and responsible act.”

To help fulfill the courts’ requirement, your church should create a licensing and ordination program that is comprised of ten components. I outlined these ten components in a previous blog that you can access by clicking here.

Running the race set before you

Setting goals and implementing standards that lead to spiritual growth within the church, and a strong community presence, are necessary and healthy aspects to leading a church in the 21st century. But when statistics indicate that somewhere between 4,000 and 7,000 churches close their doors every year, it is also important to have unwavering standards when it comes to your church’s legal foundation.

I want to extend to you an invitation to attend one of our Ultimate Church Structure Conferences. Not only will you be empowered with the tools and knowledge needed to establish a solid legal foundation for your church, but you will also be empowered with a strategy that will help sustain life within your church for years to come. Remember, in order to properly run the race that God has set before your church, you must do so with endurance, faithfulness, and diligence.

Please feel free to comment. We always appreciate good dialogue. However, we do moderate each comment to ensure that it is on topic and not derogatory to other participants. We ask that you keep your comments brief and pertinent to the topic so that others may benefit.

Raul Rivera

And receive Book 1 of our Grow Trilogy FREE today! This series gives you the strategies you need to get started growing your church plant today!