7 Things Every Church Should Do to Start the New Year

By Mariel Villarreal

Read Time: 4 Minutes

Every church needs a legal foundation that will support and protect all that God has given them to lead. In order to help shape 2022 into one of the best years for your church, I want to share with you 7 ways to strengthen your church’s legal foundation at the start of the year.

1. Review last year’s board minutes

Board meeting minutes are some of the most important documents that your church should maintain on a regular basis. They are the record and proof that your church or ministry is operating in a compliant, legal manner. 

Be certain that board minutes exist for all of your church’s board meetings last year. Also, confirm that the minutes accurately reflect what took place during the meeting and check that each set of minutes was read and ratified at the following board meeting.

If some of your board minutes are missing, or you do not have any board minutes, your board may apply the concept of ratification of prior acts, which is when the board retroactively approves decisions made in the prior year. 

This is a temporary solution that will allow your board to document prior corporate decisions that should have been recorded in board meeting minutes. When ratifying prior acts, it is important to make your most accurate, good faith estimates of times and dates when previous decisions were made.

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2. Add or remove board members

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

Recommended reading:
How to Balance Your Board
How Can I Legally Remove a Board Member?

3. Update compensation agreements

The beginning of each year is the perfect time to review, restructure, and reapprove any compensation agreements. Perhaps this is the first year that your church will be compensating you or another staff member. If so, it is important to know whether or not the individual is a ministerial employee or a regular employee. Each individual’s compensation must be approved prior to them receiving it. 

Most often this will be done as a compensation package that is approved by the board of directors. If you need assistance, or have questions about compensation packages, please call us at 877-494-4655.

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Recommended reading:
How Much Should You Pay Your Pastor?

4. Steward donations with excellence

Do you know the difference between restricted and designated offerings? Do you know how to properly handle noncash donations? If a person wants to donate a vehicle to the church, do you know what to do? Does your church have a prescribed method of how tithes and offerings are counted?

Being able to answer these questions is an important aspect of being a good steward. Properly handling donations is of utmost importance not only for the purpose of church compliance, but also for the donors who wish to claim a tax deduction for their donation. 

The IRS has provided excellent publications on how to manage donations. The Charitable Contributions Publication 1771 summarizes responsibilities of charities and donors for different types of donations. It is wise to use a program that tracks and manages your church’s donations. If you do not use this type of program, then you may want to consider trying our cloud software, Kingdom Steward.

5. Begin saving money

Whether your church is financially soaring or experiencing setbacks, saving little by little is always a smart investment in your ministry’s future. With such diligent conduct, your church will have a substantial amount in its savings account after a period of time. 

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

Perhaps your church has been consistently saving money and has an impressive cushion in its savings account. Have you considered how to best protect your church’s savings? 

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 your savings become substantial, or when your ministry has valuable real and personal property, consider establishing a tax-exempt holdings corporation to protect your church’s assets. The holdings corporation is a great line of defense for your church.

6. Hire outsourced bookkeeping

Any organization that deals with money, registered as a for-profit, nonprofit, church, or ministry, should consider hiring an outsourced bookkeeper. 

The responsibility of a bookkeeper is to maintain the financial records of the church that includes income and expense records. They are supposed to keep records of the dates and amount of every transaction, tax planning, financial planning, and consulting services of the church. Bookkeepers keep track of all accounts and are the ones who verify the accuracy of the procedures used in the accounting processes.

With the right team member in place, you can take the burden off of your shoulders so you can focus on your ministry. Along with accountability and legal compliance, there are many benefits to outsourcing your bookkeeper.

If you want to start the new year off without the stress of financial management, we would love to help you with StartCHURCH Bookkeeping! Call 877-494-4655 to learn more!

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7. Start a church-owned business

Life is too short to live satisfied with the traditional way of doing things. There are “new wineskins” that God has for you and your church in this time and season. 

Therefore, why not start and run a church-owned business and break out of the traditional methods used in the past? 

Whenever we discuss the topic of churches owning businesses, a common question that comes up is, "Can a church do that?" My answer is, "Yes, so long as it is done correctly." We call it a “For Profit Arm.” In Section 502, the IRS calls it a “Feeder Corporation,” and describes it as a business operated for the primary purpose of carrying on a trade or business for profit even if the profits are distributed to your church tax-free.

The type of business can be anything you want it to be as long as it is a legal business and your ministry feels good about it. Whether it is a retail store, a convenience store, a car dealership, a restaurant, real estate investing, commercial leasing, hauling, dry cleaning, or any unique business, your church can own it.

The best is yet to come in 2022

To fulfill the purpose of God for our ministries, we must never stop dreaming, planning, and working towards greater things through Him. Strengthening the administration of your church will make fulfilling your purpose as a minister much easier. 

If you would like to take the next steps or learn more about strengthening your church’s foundation, please give us a call at 877-494-4655! We would be happy to serve your vision in the new year.

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