Faithful ServantsFaithful ServantsStewardship MinistryStewardship Ministry

“Now it is required that those who have been given a trust must prove faithful.”

1 Corinthians 4:2

Presentation by Manuel CollazoEdited by: Rev. Dr. Huberto Pimentel, Rev. Dr. Pablo Jiménez

Agenda

• Stewardship Fundamentals in the Bible• Structure

– How do you start a Stewardship Ministry?

– How do I do it on a small church?• The Covenant

– Local Congregations– Ethnic Constituencies– Regional Church– General Church

Stewardship

• The word steward comes from the greek work “OIKONOMO”.

• “Oikonomo” (“oikos” = house & “nomos” = law) he is the administrator of the masters possessions.

• In other words he is a servant the master is the owner.

• Our Lord is the owner of everything, we are the servants and administrators, the stewards of all of the possessions placed under our care. This concept is illustrated best in 1 Chronicles 29:11-13.

1 Chronicles 29: 11-13

• 11 Yours, O LORD, is the greatness and the power and the glory and the majesty and the splendor, for everything in heaven and earth is yours. Yours, O LORD, is the kingdom; you are exalted as head over all.

• 12 Wealth and honor come from you; you are the ruler of all things. In your hands are strength and power to exalt and give strength to all.

• 13 Now, our God, we give you thanks, and praise your glorious name.

Faithful Servants• In his letter to the church in Corinth, Paul makes

a warning:

“Now it is required that those who have been given a trust must prove faithful.”

1 Corinthians 4:2

• As church administrators (stewards), it is important that these men and women be faithful servants and to provide good witness of their commitment to the work of our Lord Jesus Christ.

StructureStructure

How do you start a Stewardship Ministry?

Who are the Stewards?

• The ministry that works with the church assets is called the Stewardship Ministry

• This ministry is normally organized with three key positions– Stewardship Ministry Chair

– Treasurer

– Finance Secretary

• Other members, normally deacons with experience in the area of cash management, accounting and finances also serve in this ministry.

Structure for the Stewardship Ministry

FinanceSecretary

ChurchTreasurer

(4) Members

Team 1

(4) Members

Team 2

(4) Members

Team 3

(4) Members

Team 4

AccountingCoordinator

StewardshipChair

DeaconsChair

ModeratorChurch Board

PASTOR

Church Treasurer

• The function of the church treasury is that all obligations for the church are paid on a timely basis.

• This function implies that:

– Salaries or Payroll

– Rent or Mortgage

– Utilities (water, power, phone, internet, etc.)

– and any other church obligation is paid on a timely basis.

• A church should not be over 30 days in their accounts payable.

• Along with the Finance Secretary, balances the bank statement and makes sure that all checks and deposits are properly reflected in the bank statements and in the accounting system.

• Informs the Stewardship Chair of any deviations of the bank statements in a monthly basis.

• Checks all balances against budget and informs the Stewardship Chair and the appropriate Ministry Chair if they are getting close or are about to exceed their budget limits.

Finance Secretary

• The Finance Secretary is in charge of recording all income to the church funds and that it has proper documentation

• The Finance Secretary is the counterpart to the treasurer but his function is the opposite (the treasurer pays, the finance secretary receives).

• The Finance Secretary works with the Accounting Team to properly record all offerings and make the deposits in the Church’s commercial bank account.

• It is recommended and preferred that the actual action of counting and depositing of all offerings be done the day when they occur.

• This will avoid security problems that can surface when moneys leave the church to a home to be counted at a later time or date.

• The Finance Secretary is responsible for the registration of all donations in a “Donation Registry”. The receipt for a donation greater than $250.00 should be made no later than 24 hours after the donation is recorded. (this applies also to tithes and offerings).

• Along with the treasurer, the Finance Secretary balances the monthly bank statement and makes sure that all cheques and deposits are reflected properly in the bank statement.

Accounting Coordinator

•This position coordinates as the name implies that there are enough people every sunday to count the offering.

•He should be a member of the deacons.•It is recommended that the Chair of the

Deacons recommend the name to the Stewardship Chair.

Stewardship Chair

• This person is responsible to inform the Church Board over the financial condition of the Church.

• This position also assists in the coordination of the accounting teams so enough people are available for this function and teams don’t repeat themselves every sunday (another security risk).

• He makes the deposit with the Finance Secretary. (physically goes to the bank with him/her).

• Moderates the meetings of the Stewardship Ministry and is in charge of the Church Budget and its preparation with input from the Ministry Chairs, Treasurer, Finance Secretary and the Church Pastor. (no vacuum)

• Needs to stay informed as to what the proper pastoral compensation for the pastor (can use the Regional Minister as a resource). This information is privileged and should be treated that way.

• He/She is responsible that all legal forms related to church finances are properly filed and are on time. (Form 941, W-4, W-2 and others).

• He is the liaison between the Church Accountant (CPA firm) and works with them in the preparation of financial statements and audits.

What about the Pastor?

• The Pastor shall have financial access to the financial condition of the Church and is an exofficio member of the Stewardship Ministry.

• The pastor NEVER handles church donations.

• The pastor NEVER signs checks or has access to withdraw from the bank account.

• Receives adequate compensation that is administered by the Stewardship Ministry.

• If the church has a Pastoral Relations Ministry the Chair of that ministry shall coordinate with the Chair of the Stewardship Ministry all appropriate revisions to the pastoral compensation package.

• Pastoral Compensation should be reviewed periodically approximately every 12 to 15 months.

But what about the small church?

• Unfortunately the law does not factor in size into performing under the law.

• What this means if you have 200 members or 20 you still need to follow sound financial practices.

• At a minimum the positions of Treasurer, Finance Secretary and Stewardship Chair need to be appointed and are key to the separation of duties.

• Resources in accounting through local professional firms and larger nearby churches can assist with that work. Regional offices can also play an advisory role.

BudgetingBudgeting

What is a budget?

How do you prepare a budget?

Budget

•What is a budget?–A budget is an accounting tool that tries to forecast the income and expenses of an organization.

–It is a management tool used by the stewards to make sure that the organization is running efficiently.

How do you prepare a budget?

• A church budget is tipically composed of the following parts:– Income - These can come in in the form of tithes,

pledges, offerings and special campaigns such as a capital campaign.

– Administrative Expenses - These include payroll, rent, utilities and professional fees are considered administrative expenses. Some churches separate payroll as a separate category.

– Ministry Expenses - These are the expenses incurred in doing ministry. All ministries should submit their budgets to the Stewardship Ministry in early October so the Ministry can meet with them and discuss them. This will give adequate time for the preparation of the budget for next year.

An element of faith• For a person coming in from the secular fields

of accounting and budget preparation a church budget looks insane.

• That is because for example a government budget the income is almost guaranteed to be there.

• This is where churches operate under an “element of faith” that it is hard to understand unless you have been working on this for a while.

• The following slides will provide you with some tools to better estimate your church budget.

Estimating Income I

•Most of the difficulty in church budgeting is estimating income.

• If it is too low the congregation is not challenged. Too high and it is not realistic.

•A good measurement is to estimate the number of persons in a church that are working and receiving an income.

•Once you know the number of people that work. You can use an estimated average income for your church area. Your local Regional Minister can help you estimate this for you.

Estimating Income II• Hispanic families on the average make 20% less

than the rest of the population. You need to factor this in your calculations.

• IRS tells us that the average family gives between 2-3% of their annual salary as an offering. This is a sound basis for the start of our calculations.

• For example we have a church with a regular attendance of 100 people. The working population of this church is 50 we will say it is a hispanic church for this excersize. The average income for the area is $35,000 a year.

• The estimated income should be:– ( 50 x ($35,000 x .80) ) x 3% = $42,000

The ChallengeThe Challenge

10 Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this," says the LORD Almighty, "and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it.

Malachi 3:10

The Challenge

• The Bible challenges us once and again to tithe.

• Tithing is a discipline that is learned and brings not only good financial results but spiritual results to the donor and the church that practices it. (yes churches tithe also)

• For the Stewards the challenge is educating the people in the discipline of tithing.

• Financial results of this effort can be seen dramatically in the example we used before.

• What would happen if the church Pastor starts a stewardship campaign that challenges the church to increase their giving by 1%?

Results• The estimated budget would be:

– 50 x ($35,000 x .80) x 4% = $56,000.

• This 1% increase reflects an increase of over 33% in the church income.

• This is the equivalent of holding 62 lunches, 14,000 cakes sold, 11.67 “Garage Sales”.

• Many people concentrate themselves in holding special activities to raise funds. When the results are not met or are not achieved they leave everyone dissapointed and frustrated.

• The bible gives us with certain clarity what God’s plan is. Tithing is a discipline that must be learned and can not be discarded in any church.

Note: Assumes that each lunch leaves earning of $225.00 and that all cakes were donated.

Note

Estimating Expenses

•Church Expenses can fall in one of three general categories.–Administrative–Payroll or Compensation–Ministry

•Lets study each of these categories

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Administrative Expenses• Administrative Expenses are those that are nedessary for

the basic operation of the church.

• These include:

– Rent or Mortgage

– Utilities, Water, Power, Sewer

– Office Expenses• Printing and Reproduction• Paper, Pencils etc.• Computers• Equipment• Training

– Professional fees - Accountant, CPA, Attorney

– Insurance

Payroll or Compensation

• The bible tells us that “the worker deserves his wages.” Luke 10:7, Mathew 10:10, 1 Corinthians 9:14, 1 Timothy 5:18.

• All church staff has a right to be properly compensated for his work. This reflects our thanks for the work he has performed in the Church.

• All church employees of the Christian Church (Disciples of Christ) have the right to belong and participate of the Pension Fund of the denomination.

• It is recommended that the Church motivates all staff members to participate in the retirement and health plans of the church and that they contribute 14% of the employees package to this plan.

What is fair compensation?

• Even when The Church is to be the example for the world (and not the opposite) there are secular tools that can help the Stewards answer that question.

• The Regional Office can assist in estimating what an adequate package is for a minister.

• People with access to the internet can visit sites such as www.monster.com and look for a position similar to the one in the church to see what those positions are paid in the area. For example we have determined that our church needs to hire an Administrative Assistant (aka secretary) We could search the internet for what those positions make in the area.

• Newspapers are an excellent source of information for the lay positions of the church.

• The stewardship Ministry must study and analize what a “fair” salary is in the area and what the Church is capable of paying.

But how do we pay the Pastor?

•No I am not suggesting that you go to monster.com to find your pastor!

•A typical pastoral compensation package includes the following:–Salary–Parsonage Allowance - (Pastoral

Residence)–Retirement–Health Care

Salary• This is one of the lines of compensation but not the only

line.

• In the United States a pastor is responsible for paying taxes over this line item.

• At the end of the year the Church will have to issue a W-2 to the pastor.

• On file you need to also have forms W-4 and file all 941 forms quarterly.

• IRS publication 517 has detailed information that your CPA and accountant need to be familiar with. www.irs.gov is an excellent resource of information on what is and is not deductible.

Parsonage Allowance• This is one of the areas of greater confussion on

pastoral compensation.• The pastor is not responsible for paying income tax

on parsonage allowance. • Note that the parsonage allowance must pass

demonstration tests. In other words you can’t just say 50% of the salary is parsonage. It needs to be stated and recorded in yearly minutes as to what the Pastor is declaring is parsonage costs are (in other words the cost of running the parsonage, rent, mortgage, utilities, maintenance) etc.

• These need to declaration must be recorded in the Boards minutes every year before the last meeting of the prior year. ex: by December 31, 2007 we must declare what we will pay in parsonage in 2008.

Parsonage allowance II

• Parsonage allowance is considered part of the pastoral compensation.

• IRS rules state that it can not exceed more than 50% of the total compensation. (with rare exceptions (NY, Los Angeles, CA etc).

• Example

Salary 15,000

“Parsonage” 12,000

Health Care 7,500

Retirement 3,780

Total 38,280

Health Care

•The care of the health of the pastor is a church responsibility.

•Health Care is considered a benefit.•The Pastor if he is retired from a

company or Armed Forces or is covered under a family members coverage may be given this portion as part of Salary. (he would be responsible for taxes).

Retirement

•Many Pastors reach retirement without adequate coverage.

•The recommended benefit is 14% of total compensation (salary + parsonage).

•The Pension Fund of the Christian Church can assist in preparing the proper forms for your Pastor.

•This should NOT be an optional coverage.

Summary for Pastoral Compensation

• The Church should watch the area of pastoral compensation very diligently.

• We need to remember that even when the law says that the pastor is an “employee” he is the one responsible before God to lead the Church.

• The table below is an example of the elements of pastoral compensation.

• It is important that Parsonage Allowance be taken as an Action of the board before their last meeting of the year.

Salary 15,000

“Parsonage” 12,000

Health Care 7,500

Retirement 3,780

Total 38,280

Ministry Expenses

• Every year each ministry should prepare two documents:

– A work plan for the entire year. (What they are going to do)

– The second item is a budget. (How much is it going to cost to do what we envisioned doing?)

• The yearly work plan is discussed with the pastor to seek guidance an vision.

• The budget is also discussed with the Stewardship Ministry in a meeting called for that purpose.

Ministry Expenses II

• The Stewardship Ministry works (Dialogue, discuss, chat, pray) with the chair of the Ministry to do whatever can be done to satisfy the needs of the ministry.

• Once all the budgets are collected the Church Budget is built.

• This building of the budget brings for the first time the parts we talked before; Compensation, Administration, Ministry.

• How then do we make it balance?

How to Balance your Budget

• What does balancing the budget mean? The simplest answer is that you can’t spend what you do not have.

• Even then Churches have a difficult time with this area.

• The Pastor with the Stewardship Ministry have to adjust priorities of the Church so that the budget is brought into balance.

Balancing the Budget II

• If you have to cut in any area, then the Stewardship Chair and the Pastor call the Chair of the ministry that has to be cut and you have a private conversation on why and how much.

• There is nothing worse than finding that your plans for next year have been cut the night the budget is presented to the congregation.

• Sometimes if the meeting is held as a cabinet (everybody together) you will see ministries that have not suffered cuts adjust their budgets to fulfill a need elsewhere.

• Sometimes ministries offer to “raise funds” to cover the budget. Be careful this could affect tithing and may not be a sound practice in the long run. Resist this temptation.

Proportions

• What makes a tripod stable? All the legs are the same length.

• When we talk about the church budget what proportion needs to exist between the three main components?

• That is a question that every church needs to individually answers. Experience has taught me that a well balanced budget is that one that balances the amount spent in the three areas of Administration, Compensation and Ministry.

• Obviously the base rule you can’t spend what you don’t have always has to be kept in mind.

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But what comes first?

• But I rejoiced in the Lord greatly, that now at the last your care of me has flourished again. Although you indeed did think, but you lacked opportunity.

Philipians 4:10

• Pastoral Care should be our number one priority.

• It is our main ministry of the congregation and as such it should be our greatest priority.

• There is no more important mission than caring for our Ministers.

Saving for the FutureSaving for the Future

35 They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh, to be kept in the cities for food. 36 This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine."

Genesis 41:35-36

Saving for the future

• Some churches save by accident. All churches should have a policy regarding reserves.

• Reserve funds are used in case of emergency.• It is a healthy practice to budget an amount for

the reserve fund in the operational budget.• Every month, sunday, bi-weekly a designated

amount should be reserved and placed aside.

Reserve Funds

•Reserve funds should be placed in a separate account from the operational checkbook. (if you don’t see it you will not spend it).

•The Church should keep a separate savings account and checking account.

•The saving account is the “parking” place for funds that will be needed in a short term basis. (3-6 months).

Short Term Investments

• In the parable of the Talents, the master was happy with the servant that multiplied his talents.

• As Stewards of God’s treasure we are responsible for making this treasure grow.

• There are investment vehicles within the General Church for funds 2-5 years through Church Extension.

How to make your talents How to make your talents grow.grow.

19 "After a long time the master of those servants returned and settled accounts with them. 20 The man who had received the five talents brought the other five. 'Master,' he said, 'you entrusted me with five talents. See, I have gained five more.' 21 "His master replied, 'Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master's happiness!'

Mathew 25:19-21

How do you invest your talent

• Churches should use available ways to make their savings accounts or reserve funds grow.

• Permanent Funds can be established. These types of funds establish that only the interest will be used and not the principal.

• Subject to Withdrawal funds also exist as a way to receive a steady income from moneys received. These funds may eat into the corpus that established them.

• The interest from these funds can be used to cover ministerial expenses in the church. They can server as another source of income to the church.

Church Extension

• Sometimes we may think of Church Extension as the general unit of the church where you borrow money.

• However Church Extension is also a form of investment for Churches and also for Church Members.

• Church Extension offers investment opportunities for individuals (IRA, Money Market etc.).

• Church Extension is typically used for short term investments.

Christian Church Foundation

• The general unit of the church in charge of long term investments is the Christian Church Foundation.

• Investments in the foundation are done at a longer term, 5 to 10 years.

• The Foundation works through its investment committee a group of specialists in this field. Their mission is to help Disciples make a difference in the future of the church.

Funding the CovenantFunding the Covenant

The Covenant of the Christian Church (Disciples of Christ)

Funding the Mission

•All Churches belonging to the Christian Church Disciples of Christ should contribute to Disciples Mission Fund.

•The suggested model of this covenant is that congregations contribute the “tithe of the tithe” to Disciples Mission Fund.

•In addition there are six special offerings that churches can contribute to for specific areas of ministry.

Special Offerings I

• Week of CompassionWeek of Compassion - This offering prvides help in emergency situations throughout the world.

• EasterEaster – This offering is designated for the General Ministries of the Church. The National Office for Hispanic Ministries benefits from this offering.

• PentecostPentecost – This offering is designated for the development and establishment of new congregations. This offeing is divided between the Regions and the New Church Ministry at the national level.

Special Offerings II

• ReconciliationReconciliation - This offering is dedicated to the fight against racism.

• ThanksgivingThanksgiving - This offering is designated for Disciples related Seminaries and Universities.

• ChristmasChristmas – The Christmas offering is designated to regional ministries.

Christmas Offering Materials

Other Ministries

•Churches can designate a portion of their offering to specific ministries related with the denomination, regional ministries or educational institution related to the church.

•The Hispanic and Bilingual Fellowship in their 2006 Assembly passed a resolution 0636 called the Tithe of the Tithe.

•Based on Numbers 18:26• “Speak to the Levites and say to them: 'When you receive

from the Israelites the tithe I give you as your inheritance, you must present a tenth of that tithe as the LORD's offering.”

Numbers 18:26

How do hispanics do it?

• Hispanic Congregations share their offering in three equal portions. – Disciples Mission Fund, – Central Pastoral Office for Hispanic Ministries and – Local Hispanic Convention.

• This covers all of the expressions of the “Obra Hispana”

• The resolution also encourages congregations to use the resources of the Financial Units of the Christian Church (Disciples of Christ) for investment and pastoral care through participation in the Pension Fund.

• Also congregations are encouraged to participate in all special offerings of the Christian Church.

Conclusion• Stewardship is one of the most serious ministries of

the church it should not be taken lightly.• Most pastors that face legal problems face them due

to ignorance of the law. Unfortunately that is not an excuse for complying with the law.

• A blanaced Stewardship Ministry knows and has expertise in the tax laws both at national and local levels and avoids these problems for both the Church and the Pastor of the congregation.

• Even though the Pastor is the spiritual leader of a congregation he is not the Financial leader of the Church. That job falls squarely on the sholders of the Chair of the Stewardship Ministry.

Additional Information

• This presentation along with others are available for your use and download in www.mayordomia.net

• The Electronic Portal predicar.org from Rev. Pablo Jimenez is another useful site with stewardship information. Rev. Pablo A. Jimenez is the past National Pastor for Hispanic Ministries his website is www.predicar.org

• Christian Church Foundation - www.disciples.org/ccf

• Church Finance Council - www.disciples.org/cfc

• Church Extension - www.churchextension.org

QuestionsQuestions

At this time we have a few minutes to answer questions that you may have.

If there are no questions thank you for your attendance and your attention during this

presentation

¡Que Dios les bendiga siempre!