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 TO:  Interested Onliners or Ministries                                                                                        FROM: Jim Bramer, Retired CPA-Auditor
                                                                                                                                      FILE:  0205-03/jrnl
   
 RE: J I Ms  J R N L  for the month of May 2003                                                                                                Originated:  May, 2003  

PURPOSE:  To help your  Ministry Finance Team  be more effective:

Board Members and Finances (1)

        Board Members are very savvy people, but most are not accountants.  For your Ministry to function effectively, however, Board Members must have an understanding of your finances. If any of the following questions to a  Board Member concerning Ministry financial reports is answered "No", then your Ministry must make corrections.   :

•     Do they clearly show you if the Ministry financial picture is good or bad?
•     Do they provide information so you know "where you should be" in relation to a target?
•     Do they give you comparative data so the financial "trends", or directions, can be observed?
•     Is such info presented on a regular and timely basis to Management?
•     Do they meet my own personal needs as to where the financial resources come from and where they go for a period of time?
•     Do they adequately reflect the status of all of the financial resources and obligations as of a certain point in time?

Budgets at Christian Ministries (4)

        Many of us have recently been involved with a Church's (or Ministry) annual operating budgets. Please keep the statement below in mind as you review the Ministry Budget material that follows.:

  "A meaningful  "Budget"  is an expression in dollars of what the Ministry hopes to accomplish in the stated future."

Goals and Ministry Budgets

            A Christian Ministry's budget MUST be consonant with it's goals.
            Some have said that the financial budget (usually the time frame is annual) is an expression in dollars of it's goals, or a personification in dollars of the Ministry's Mission Statement and plan of action.
            Goals help you to be specific about what God wants the Ministry to be. They help you to look forward instead of licking the wounds of the past. They're like posts or stakes in the distance that help you plow a straight furrow. Goal-setting should not be man made strategy for a "bigger and better" Ministry, but a serious attempt to discern the will of God for His Ministry and people. Properly understood, goal-setting accomplishes a number of tasks. It helps people discover where they are now, in terms of their relationship to Christ, to each other and to their efforts. It also helps a Ministry to place priorities on its concerns and make "measurable, accomplishable" goals for a short-range period. And it provides a basis on which to select or create programs to achieve the goals and know exactly when they have been achieved. How does it work?

•     A goal should be a response to a need. Needs are multi-dimensional and usually come in bunches, but they can be identified without too much difficulty. Educators speak of felt needs and real needs. As I understand it, felt needs are those which people recognize themselves, like a new summer coat or a salary increase. Real needs are more basic and fundamental, but not always recognized by people. Accepting Christ as Savior and Lord is a basic need. Goals need to take into account both kinds of needs.
•     A goal is a picture, or image, of how the future might be. This image should stir the imagination. In helping Christian Ministries, one writer uses a chart in which constituents describe where they are now and where they believe God wants them to be. This "imaging" is a major step in the process.
•     A goal can be accomplished. Goals must also be measurable. They must have a time factor and a description of what is expected when the goal is achieved. Here goal-setting gets tougher because people have to start "pinning things down." This exercise can be a healthy experience for a Christian Ministry. Instead of living with fuzzy generalities, you can see some practical expressions of basic biblical guidelines.
•     Once the goal is measurable, then the progress toward the goal must be measured. A complete goal will always specify intervening steps that can be used to measure progress toward the ultimate goal. One Church Ministry used goal-setting to determine its most significant needs and took steps to meet them. A first step was to emphasize the family for an entire year. Getting families together and helping Fathers take leadership were the goals. The program to meet the goal included evening service messages on all aspects of family life, neighborhood discussion groups for parents, and a church sponsored family activity each month.
•     A real danger in goal-setting is that "people can become goal-centered instead of Christ-centered -- goals then become idols when they need to be servants." Ministries that utilize these servants will discover that obeying the Lord in practical, tangible ways brings glory to God and deep satisfaction to the believer and to the Ministry. Goal-setting Ministries will uncover a new enthusiasm as they discover who they are, what their mission is and how to accomplish it today. Remember, the purpose of organizing is to accomplish something. Goal setting is a process. - the Lord said, "I am come to seek and to save them that are lost." His was a "mission by objective." Let us follow in His steps.

Annual Budget - Is it  Sacred?

    When I got out of the Army in 1956, our family moved to Spokane, Washington where I pursued my education and CPA training.  We were a part of a Baptist Church and it was not long before I became the Church Treasurer.  Of course, one of the primary aspects of this responsibility had to do with the General Operating Fund Annual Budget.  Back then ( as the grandkids would say --- a looooooong  time ago), and even today, we had to deal with the "Sacredness" of the General Operating Fund  Annual Budget.  By "Sacredness",  I mean such things as:

•  Remember we are a congregation driven Church and it has to make all of the money decisions.

•  My goodness.... in no way could it be changed --- it is set in concrete, unless we call a congregational meeting we can not authorize that needed $500 item.  

•   An immediate wonderful opportunity for Church Ministry came our way but no way could we make Annual Budget adjustments. 

•  We really should make some Church Personnel changes but that is not possible because the Annual Budget can not be changed.

•  One of you Onliners recently shared a quote from one of their finance officials:  "It's easier to get forgiveness, than it is to get Annual Budget change approval";  there seems to be grain of truth in this quote.

•   Even when our General Fund  income was not enough we still had to comply with our Annual Budget .... even if we had to borrow internally from other Church Funds - or even from external sources.

•   Oh my goodness ..... looks like we have money in the General Fund  and I have not spent last year's budget. I must think of some way to spend it.

•   A recognized emergency has come up that needs action right now. But no way can we do it because it first needs congregational approval, etc.

    Obviously, I am doing some exaggerating here,  but I trust you get my point. We need to get away from much of the above archaic "mind set" as we righteously handle such matters. Please embrace the following Church Budget Truisms.

Truisms about Church Budgets

  From my perspective, let me share the following "CHURCH BUDGET TRUISMS" ---

        A> Church spending controls are essential.
        B> Whenever a Church authorizes a SPFund , it concurrently authorizes the expenditure of that SPFund balance for that specified purpose; therefore a fiscal year budget for each SPFund is not needed.  Contact us at  JimRetCPA@bcidot.org  about the need to budget for expenditure transactions that flow via a self funding SPFund operations at the church.
        C> The Annual GPFund Budget is the needed authorized expenditures for that year. Such expenditures are generally divided up by GPFund spending groups (I like to reference them as D)ollar A)ccountability G)roups - DAGs.) Then there are various expenditure categories within each group; e.g.: Salaries/Benefits, Operating types of Supplies and/or Expenses, Missions, Debt servicing, SetASides (Transfers to a SPFund) and Equipment, etc. procurements.  Do your best to assign the annual expense to the applicable seasonal month of the fiscal year -- do NOT divide the annual budget by 12 and insert same for each month.
         D> The income available to a Church  GPFund  is often seasonal and/or volatile; a steady known stream is the exception rather than the rule.
         E> Therefore, a Church rightfully can spend only what comes into the GPFund, regardless of the Annual Budget authorization.
         F> Therefore, the Annual Budget is  NOT SET IN CONCRETE;  it should be either prudently increased or decreased.
         G> The MFTeam and the Church staff MUST regularly make wise decisions from such fiscal information as: 1> Weekly amount of GPFund Income; 2> Amounts of GPFund Income as assigned for Ministry absolutes; 3> GPFund Income residuals for authorized non-absolutes; and 4> SPFund Balances.
         H> It is appropriate for the MFTeam/Staff to temporarily do inter-fund borrowing since some spending groups need their funds unevenly throughout the year.
         I> Annual budget authorizations expire at the end of each fiscal year; this year's unused authorizations DO NOT automatically carry forward to the next year. If it does not happen within this year's ministry/plans, then include it as a part of the new year's plans converted to dollars, yea the budget, etc.
         J> The Church should have  Finance Policies  in place that authorizes the Leadership Board to make approved changes to the congregational annual budget --- some policies allow an increase of some 10% of the congregational approved annual budget - if annual budget is $500,000 then the Board can change up to $50,000, etc.  We join a Church administration in hoping that it is NOT necessary to run a mid-year revised Annual Budget back to the congregation;  it is NOT wise for the congregation to micro-manage.

Christian Management Association   -   Bay Area Chapter (3)

          Please be aware of a luncheon/networking time on Thursday June 19, 2003 under the auspices of the Bay Area Chapter of the Christian Mgt Assn.  Go to the following link for more details:   http://www.sjcma.org/html/events.html   Please Click Here for info on this web site about the speaker CPA Dan Busby.  Dan's topic on June 19, 2003  is  "Use of the Internet by Ministries for Fund Raising."

Clergy Finances (7)

        Our Pastors are VERY special people in our lives .... and our Church leadership should be extra careful about appropriately providing for their compensation and benefits.  I trust you find the link content in  Clergy and their Personal Finances  as a source of help to this end.   Some comparative compensation info found at  Ministerial and Planning Services - Compensation Study  might also be of interest.

New Churches (8)

        Please link to   New Church Set ups etc - By Ted Seidel and Tim Davidson  While this resource is designed for a particular Church group, it could be helpful to any Evangelical Church just getting started.

Personal Finance (5)

        As indicated within the Sample Church Finance Policies at  5005 ,  I greatly encourage Churches to help their people in regard to Righteous Personal Finance.  You might find of interest some recent additions found at  4999.

Planned Giving Resource (2)

        I just learned of the following Planned Giving web site resource:  www.heritagesolutions.org  You will find a lot of helpful information here as you encourage your constituents to "Plan" ahead.

Web Based DonaMail (6)

        To remind you --- as indicated within  0021  ---  DonaMail is a computer people emphasis database system that handles at least Donations and Mailing list info. etc. I trust you identify with the administration of such records via a Web Based method -- see  WEB Based DonaMail article    Please also see our material about Web Based ASPs in  0904 .

Prayerful Thot:

    Snippets from the 1st chapter of Paul's epistle to Titus include: "Since an Overseer is entrusted with God's work, he must be blameless - not overbearing; not pursuing dishonest gain; be self-controlled, upright, holy and disciplined; able to encourage others to sound doctrine and refute those who appose it".  Please join me in appealing to the Lord that He will help us as Ministry Finance Team members along these lines.