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31 Oct 2017

The Ultimate Strategy to Protect Your Church

Raul Rivera

Over the past two weeks, we have talked about how to know when it is the right time for your church to begin building and what steps to take when that time arrives. (I have included links to those two blogs at the bottom of this post.)

In this blog, I want to address the question: “Now what?”

Once your church’s building campaign is complete and the facility is built, what next step should you consider? 

Sure, you will begin using your new church building for worship services and other ministry related activities, but have you thought about how to protect the church facility?

This is an especially important matter to consider since the #1 reason churches ended up in court in 2016 was due to property disputes. It is actually the first time since 2011 that the #1 reason why churches ended up in court was not due to sexual abuse.

For this reason, and along with many other reasons, it is imperative that your church have a strategy in place to protect all that God has given to it. 

If you have been to one of our Ultimate Church Structure Conferences, you will be familiar with the protective strategy that I will mention in this blog. Before I do so, I want to take a moment to discuss the importance of your church obtaining liability insurance coverage.

How soon should your church get liability insurance?

Liability insurance is a type of insurance that protects the insured from the risks of liability that may be imposed by lawsuits and other similar claims.

In the event that your church is sued, liability insurance will protect you so long as the “claim” falls within your liability coverage.

So, how soon should your church obtain liability insurance?

To help answer this question, I sat down with Nolan Jackson, a church liability insurance agent, to get his opinion. Here is what Nolan had to say:

“I really believe that churches should get liability insurance coverage as soon as they receive an EIN (employer identification number) or become incorporated with the state.”

He went on to say that, “The mistake many pastors make often is putting off the task of getting liability insurance for their church. They give numerous reasons for their procrastination, but what ultimately happens is that they end up forgetting because they get busy and preoccupied with everything else.”

Nolan concluded by saying, “Pastors have so much else going on that they simply forget to follow up. Because of that, and the fact that it is simply best practice to do so, I believe churches should get liability insurance from the very beginning.”

If your church is in need of liability insurance, then give Nolan a call today at 770-361-5309 or you can check him out on the web here.

Next, I want to tell you about a protective strategy that I think every church should implement—a holdings corporation.

What is a holdings corporation?

Knowing what I know now, if I were pastoring a church today, I would work expeditiously and purposefully to protect all of my church’s assets by tucking them into a holdings corporation.

A holdings corporation is a separate corporation created by the church with one single purpose of holding the church's assets. The corporation is formed under section 501(c)(2) of the Internal Revenue Code. 

The church is the parent organization because it is the sole member of the corporation. Here is where the power of the holdings corporation rests. 

The church does not own the holdings corporation, but rather, the church is its sole member and its membership can never be revoked, terminated, or suspended for any reason. 

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If the church ever gets sued, the holdings corporation cannot be sued because it is a separate organization. 

Additionally, if the church ever loses a lawsuit, its assets are safe because it cannot lose what it does not own. All of its assets are tucked away in the holdings corporation.

What happens if the holdings corporation goes rogue?

I often get asked the question: "Would the church lose its assets if the holdings corporation goes rogue?"

The answer is: "No." 

Of course, that is if the holdings corporation is properly set up. 

Here at StartCHURCH, we encourage and set up holdings corporations in which the church is the irrevocable sole member. This gives benefit to the church in that it provides sole control over the holdings corporation. 

Are your dreams big enough?

I believe it is safe to say that most, if not all, churches and church planters desire and dream of having an impact on their community. The dream and vision found within a pastor’s heart does not stem from selfish desires or self-seeking pursuits, but rather, this passion comes from the heart of God to see lives changed for all eternity through the church.

Oftentimes, in order to help facilitate the dreams, visions, and goals of having a positive impact within the community, churches find that they need their own facilities. 

Since your dreams, visions, and goals are usually a reflection of the Father’s heart that He has shared with you, it is important to implement the provisions to protect not only what He has already blessed you with, but also the blessings that are to come. 

Therefore, I challenge you to do one of two things:

  1. Join us at one of our upcoming conferences near you. At our conference, we will spend ample time teaching you about the benefits of a holdings corporation.
  2. If you are unable to join us at an upcoming conference, then give our office a call at 877-494-4655. Our dedicated and knowledgeable staff will be more than happy to serve you and your church.

Do not wait until it is too late to protect that which God has given you. Step out in faith and prepare the storehouses to see how God blesses you and your church.

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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.

Blessings,
Raul Rivera

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About the Author

Church Planter. Speaker. Author. CEO. Raul Rivera has had ample experience in the church planting world. His current venture, StartCHURCH, has helped 1000's of churches to start right. Raul has compiled an array of manuals and software tools that help churches stay compliant with the IRS. He also hosts over 35 national conferences per year, training pastors on how to launch their churches. Raul is married to his wife Genel, and they and their five children live in Atlanta, GA.