22 Jan 2019

6 Ways to Strengthen Your Church in 2019

Angie Joya

“Five ... four ... three ... two ... one ... Happy New Year!” 

As the clock wound down, Pastor Carlos looked around the crowded room at the smiling faces. Everyone seemed eager to welcome the new year. That’s the thing about starting a new year. Whether it’s intentional or not, we find ourselves reflecting on the past year and thinking about what’s to come. Pastor Carlos was no exception.

Though his church had a great year, there was a small voice inside his head whispering, “You could have done better, should have done more. You should have saved more, should have, should have, should have...”

Pastor Carlos looked around and became aware of the joy he saw in the sanctuary. He observed faces of changed lives, restored families, healed hearts, and people looking forward to a better future. He knew he could have done things differently for his church. But his church would do things better moving forward. For now, they would celebrate the past year and look ahead to the new one that had just begun. 

A vision for more

Make 2019 one of your church's best years by strengthening your church's legal foundation. After all, you want a foundation that will support and protect all that God has given you to lead. Let’s look at six ways you can strengthen your church in this new year:

1. Review last year’s board minutes

Board meeting minutes are some of the most important documents that your church has, and they should be maintained on a regular basis. Think of board meeting minutes like receipts for the decisions the board of directors makes. They also provide proof your church or ministry is operating in a compliant, legal manner.  Be sure board minutes exist for all your church’s board meetings last year. Your minutes should accurately reflect what took place during the meeting and should be read and ratified at the following board meeting. 

If some of your board minutes are missing, or you don't have any board minutes, don't panic! Your board may ratify, or retroactively approve, prior acts.

This is a temporary solution that allows your board to document prior corporate decisions that should have been recorded in board meeting minutes. When ratifying prior acts, be as accurate as you can to provide estimated times and dates of when previous decisions were made.

Lead Your Board Meeting with Confidence!

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2. Review board members

It's important for your board members to work in unity toward the same goals. The annual board meeting is an ideal time to update your board of directors. Depending on your bylaws, at the annual meeting, you may accept resignations, add new members, and remove existing board members.  

3. Compensation agreements

The beginning of each year is the perfect time to review, restructure, and re-approve any compensation agreements. Is this the first year your church will be compensating you or another staff member? If so, you need to determine whether or not the compensated individual is a ministerial employee or a regular (non-ministerial) employee for tax purposes. Each individual’s compensation must be approved before receiving it. The easiest way to do this is to create a compensation package approved by the board of directors. 

4. Handling donations

Donations come in all shapes and sizes, and it’s important to know how to handle each kind. For example, do you know the difference between restricted and designated offerings? Or how to properly handle noncash donations such as vehicles or land? Does your church have a prescribed method of how tithes and offerings are counted? Being able to answer these questions is an essential aspect of being a good steward. Properly handling donations is of utmost importance for compliance and for donors to claim a tax deduction for their donation. 

The IRS has provided excellent publications on how to manage donations. Publication 1771: Charitable Contributions summarizes responsibilities of charities and donors for different types of contributions. If you’re finding it a challenge to keep track of and create giving receipts for all of your donors, try out Kingdom Steward! It's an easy-to-use program that helps you track and manage your church’s donations. 

5. Start saving money

Whether your church is financially soaring or experiencing setbacks, putting money aside for savings is a smart investment for your ministry’s future. By faithfully saving even just a little money each month, your church’s savings account will grow in no time. 

As Proverbs 13:11 (ESV) says, “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.” 

Maybe your church has been consistently saving money and has a substantial amount in its savings account. This may be a good time to think about how to best protect those assets. Sure, the bank can keep it safe. But if one day your church finds itself in the midst of litigation, your church’s savings and assets become vulnerable and exposed. When you have a large amount of savings, or when your ministry has valuable real or personal property, consider establishing a tax-exempt holdings corporation to protect your church’s assets. A holdings corporation is an excellent line of defense for your church.

6. Consider starting a church-owned, for-profit arm

Take your church to the next level in 2019 by starting a for-profit arm. A for-profit arm is a ministry-owned business that is established to generate tax-free money for the church. Profits from the business are then paid in the form of donations and dividends to the church. The for-profit arm exists as a regular for-profit business as described in Internal Revenue Code section 502. The possibilities for a for-profit arm are limitless and may be the push your church needs for 2019.

Greater things are in store for you this year

The beginning of a new year is the perfect time to reflect upon and celebrate the blessings from God and to prepare for the future. Amidst change and growth, we must continue dreaming, planning, and working towards greater things through Him. 

By taking the time to strengthen your church's legal foundation, you'll be able to better protect what God has given you to lead. If you have questions about any of the steps mentioned above, we would love to help! Give us a call at 877-494-4655. 

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

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