Church Executive Digital Magazine Jan 2013

SAM S.RAINER IIIRAINER IIIRAINER III

SERVING FIRST, LEADING SECOND | 10

HELPING LEADERS BECOME BETTER STEWARDS JANUARY 2013

SPECIAL SECTION:

BUS MINISTRY | 16

MOBILE APPS:

CHURCHES REACHPEOPLE ON THE MOVE

SOCIAL MEDIA:

RELATIONSHIPSTHE PRIMARY FOCUS | 22

| 14

MAKING TAX-DEDUCTIBLE YEAR-END GIFTS 13By Frank SommervilleWhen is an end-of-year gift tax-deductible – and when it’s not?

CHURCH ON YOUR FINGERTIPS 14By Rez Gopez-SindacA mobile app expands your reach and impact.

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Church Executive ™ (Copyright 2013), Volume 12, Issue 1. Church Executive is published monthly by Power Trade Media LLC, a subsidiary of Friendship Publications Inc., 4742 N. 24th Street, Ste. 340, Phoenix, AZ 85016.

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Copyright 2013 by Power Trade Media, LLC. No advertisement or description or reference to a product or service will be deemed as an endorsement, and no warranty is made or implied by Power Trade Media, LLC. Information is obtained from sources the editors believe reliable, accurate and timely, but no warranty is made or implied, and Power Trade Media, LLC is not responsible for errors or omissions.

7 RON KEENER

8 NEWS UPDATE

9 SPEAKING VOLUMES By Ronald E. Keener

20 LEGAL ADVICE By David Middlebrook

25 FINANCIAL SOLUTIONS By Mark Winterroth

27 BUSINESS MANAGEMENT By Vonna Laue

29 Marketplace

FEATURES

DEPARTMENTS

SPECIAL SECTION:

JANUARY 2013

Helping Leaders Become Better Stewards.

25

BUS MINISTRY

13

THE CE INTERV IEW

SHOULD YOUR CHURCH START A BUS MINISTRY? 16By Ryan ThompsonIt’s a great outreach tool, but it requires leadership, labor and funds.

LESSONS LEARNED FROM 30 YEARS OF BUS MINISTRY 18By Jeffery J. FugateThere are countless Christian workers and soul winners that bus ministries have produced.

10

THE 10 COMMANDMENTS OF SOCIAL MEDIA 22By Ben StroupCreate new opportunities to engage people and build a community.

16

2013

By Rez Gopez-Sindac”I want to die here – old, leathered, scarred, and exhausted.” So says Sam Rainer III as he tries to articulate his deep love for the local church. Sure, the new senior pastor of Stevens Street Baptist Church grew up in a Christian home, yet his parents never pushed him into a minis-try career. In fact, they did the opposite.

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EDITORIAL ADVISORY PANELStephen BriggsAssociate Pastor of AdministrationFirst Baptist Church | Hendersonville, NC

Denise CraigChief Financial Offi cerAbba’s House | Hixson, TN

Mike KlockenbrinkChief of StaffLakeside Church | Folsom, CA

Dan MikesExecutive Vice PresidentBank of the West | San Ramon, CA

John C. Mrazek IIICEOBuilding Better Churches | Colorado Springs, CO

Sam S. Rainer IIISenior PastorFirst Baptist Church | Murray, KY

Mark SimmonsBusiness ManagerChrist Community Church | Milpitas, CA

Eric SpacekSenior ManagerGuideOne Insurance | West Des Moines, IA

Volume 12, No. 1

01/2013 | ChurCh exeCutive | 7

fuTuRe CHuRCH

david Murrow, the Alaskan who, a few years back, wrote the book Why Men Hate Church [www.Churchfor-Men.com], had some wisdom for the contemporary church.

in a recent blog, Murrow took on the role of prognosticator for how the church will look 50 years from now. if current trends in Christianity con-tinue, he says, we can expect great change in the church by 2062.

“i predict that the church will become both larger and smaller; less centralized and more efficient at meeting people’s needs. doctrinal dif-ferences will continue to shrink, and emphasis on mission will continue to grow,” he writes.

he says the church-on-the corner of “50 to 500 souls will become too expensive to staff and their aging buildings too difficult to maintain. these so-called ‘family churches’ are already losing members to mega-churches that offer superior preach-ing, music and programming. pastors are shunning their pulpits, preferring to plant new congregations. in their place we will see an explosion of sat-ellite campuses and microchurches.”

A friend of mine and former pas-

tor wrote the other day about his last church, with which i am familiar. it is a church of 50 people that had a million dollars in the bank after selling their property to the school district next door. instead of doing something mis-sional and creative with that money, they – you guessed it – built another church.

“i got to the point that controlling people and their constant maneuver-ing to prevent anything from chang-ing or happening drove me to utter frustration,” my friend wrote. “no job is perfect, but having 50 bosses who are not in contact with our Lord (and hiS church was really their church) was more than i could deal with after 42 years [not at the same church]. it was way too apparent that the highest and best good among existing con-gregations was ‘leave us alone to die.’ typically, the building was their idol and it was often their downfall.”

Murrow envisions the coming of microchurches of less than 50 people, led by a layperson (or couple) and meeting in private homes or in rented spaces. he doesn’t mean house churches as we know them now, but rather “they will be affiliates of a small number of cutting-edge megachurches led by amazingly tal-ented communicators.”

Murrow predicts that 200 mega-churches will dominate American Christianity in the next 50 years—“planting satellite campuses in thou-sands of cities and towns in America, delivering their teaching and music via video.”

he says 80 percent of churchgo-ers in America will receive teaching

from a pastor who’s not in the room with them. Saddleback Church is rout-ing its video to other buildings on the campus, but what is unique are the multiple musical formats. take your pick from traditional hymns, hard rock, country and western, or polyne-sian in the room of your choice.

As many churches have compel-ling messages, speakers and pro-gramming, Murrow says “the quality gap will drive many churches-on-the-corner out of business.”

You’re skeptical, you say. Murrow adds that “50 years ago no one could have predicted rock bands in the sanc-tuary, people wearing shorts and flip flops to church, or churches beaming their message to satellite campuses across town” [or to other states and countries, for that matter].

the churchgoers of 1962, he says, “would have scoffed at expres-so machines in church, youth mission trips and smoke machines in worship. Yet all those things are quickly becom-ing commonplace.”

Just a few years ago, did you anticipate a café in your church and smoke machines as part of worship?

roN KEENEr

Got a question or comment? email

[email protected]

01/2013 | ChurCh exeCutive | 9

NEWS UPDATE

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Tim Spivey is lead planter of New Vintage Church in San Diego, CA. Tim is also an adjunct professor of religion at Pepperdine University and purveyor of New Vintage Leadership, a blog offering cutting-edge insights on leadership and theology. He is the author of numerous articles and the book Jesus, the Powerful Servant. @timspivey

San Diego school awarded $1.1 million in landmark federal religious land use jury verdict

MeeT Ce’S bloggerS

A federal jury has ruled in favor of the Academy of Our Lady of Peace (AOLP) in a precedent-setting reli-

gious land use and zoning case against the city of San Diego. The award of $1,111,622 is the largest jury verdict in the history of the Religious Land Use and Institutionalized Per-sons Act (RLUIPA). RLUIPA expert, attorney Dan Dal-ton, garnered the verdict on behalf of the school.

In May 2007, the 130-year old academy proposed a modernization plan to

remain competitive with other public and private high schools in the area, and originally received approval from the San Diego Development Services Department and the Planning Commis-sion in 2008. Less than a year later, the San Diego City Council rescinded the approval, forcing the academy to sue based on the city violating the RLUIPA law.

At issue in the case was the city’s designation of three homes on the academy’s campus as alleged historic buildings, despite there being hun-dreds of identical houses in the area. The academy had outgrown its current facilities and the homes could not be

repurposed or renovated to provide adequate classrooms for the school’s students.

So what does this mean to churches nationwide? First, it continues to solid-ify RLUIPA as a law protecting religious institutions against discrimination, lev-eling the playing field with industrial, residential and commercial zoning reg-ulations. Second, and more importantly, the victory also shows churches that it’s possible to fight City Hall.

The parties will return to court in early 2013 to hear the judge’s ruling on the permits the school is seeking in order to move forward with its modern-ization plan.

Church Executive continues to be a leading resource for the key leaders of America’s larger churches due in no small measure to its reputable editorial contributors and bloggers. Well known in their respective fields, they all bring cutting-edge perspec-

tives and expertise in critical areas of church business, including leadership, church administration, organizational development, financial and risk management, staff development, church growth and technology.

Ken behr is the senior director of ministry opera-tions at Christ Fellowship in Palm Beach Gardens, FL, and a former president of the Evangelical Council for Financial Accountability (ECFA). He has served on a number of nonprofit boards and as an adjunct professor at Geneva College in Pennsylvania and Florida Atlantic University in Florida. @kennethbehr.

Mike Klockenbrink is chief of staff at Lake-side Church in Folsom, CA. Mike worked for W.W. Grainger Industrial Supply for 16 years in many different capacities – branch man-ager, regional quality manager, district sales manager and regional operations manager. In January 2000, Mike quit climbing the corporate ladder and started climbing the Kingdom ladder. @sledgeman.

Paul Clark is pastor of ministry environments/opera-tions at Fairhaven Church, Centerville, OH. He has served in the areas of church administration and operations for 18 years. His passion is to translate great vision into organizational reality, sharing his thoughts and ideas at www.visionmeetsreality.org. @paultclark.

Sam S. rainer III serves as president of Rainer Research (rainerresearch.com), a firm dedicat-ed to providing answers for better church health. He also is the senior pastor at Stevens Street Baptist Church in Cookeville, TN. You can connect with Sam at his blog, samrainer.wordpress.com. @samrainer.

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SPEAKiNG volUmES

”Whether it is a change in worship style or a change in music, there are significant challenges facing worship leaders today,” says eileen Guenther in speaking about the collaboration between clergy and musicians. One of those challenges she speaks of in a new book Rivals or a Team? (Morningstar Music publishers) is how well the pastor and the worship leader get along.

Guenther, associate professor of church music at Wes-ley theological Seminary, Washington, d.C., responded to questions from Church Executive:

What is it about the relationship of pastor and musician that engenders conflict?

it often comes down to two issues: a matter of control and a lack of clarity about “who’s responsible for what.” in this regard there are two issues that surface most fre-quently. the first is choice of hymns, for example. if both parties are used to choosing them in previous employment situations and they don’t talk about the way they want to

handle it, there can be conflict at the very start. Another example is the need for clarity in terms of how

far ahead the clergy share the theme for a service (or which Scripture readings will be the main focus of the sermon). Musicians need a certain amount of time to choose (and perhaps order) as well as to rehearse music that will be relevant for a particular service – and finding out what the subject sermon is on Saturday afternoon before Sunday isn’t sufficient.

how can the two start out on the right track when either of them is new to the church?

the key issues in forming a relationship are building trust and respect. this would start in an obvious way — getting to know each other, learning what the other person values in terms of worship and music and discovering how each of them sees their relationship. this takes a commit-ment of time for regular meetings and personal investment in the relationship, but will pay huge dividends. initiating these discussions early on will pave the way for a healthy, mutually supportive relationship.

Are there key questions a pastor should ask the musician about music style and worship approach?

Absolutely! productive questions are basic: in your view, what is the goal of worship? What is the role of music within the service? What is the role of the choir in encour-aging congregational singing? how can we work together to enable the most powerful worship in this place? do you have “hot buttons” that i could avoid?

What should be the end goal of worship music?For me the goal of worship is “ushering the people of

God into the presence of God and sending them forth to do God’s work in the world.” Music makes a difference in the world and it makes a difference in worship. it is “portable theology,” and well-chosen music (especially the final hymn) can send people out of the sanctuary singing the message of the Scripture and the sermon.

church music isn’t all about rock music and loud drumming today. is the organ still the predominant instrument among America’s larger churches?

“Add, don’t subtract” is my motto. the organ is very much alive and gives vibrant musical leadership in many churches. it’s not unusual, however, to use piano or drums when the music calls for it. the broader the range of music, the broader the range of instruments! Add instruments to the mix, don’t take them away!

how do you look at music within the church?the opportunity to affect the spiritual lives of congre-

gations is one to be treasured. Music speaks to our hearts and our souls and, having heard it or sung it, changes us. For music and for its power in worship, i can only say, “thanks be to God!”

BY rOnALd e. keener

Music leader, pastor must talkMusic leader,

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ThE cE iNTErviEW

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his father is thom S. rainer, author, consultant, and president and CeO of LifeWay Christian resources of the Southern Baptist Con-vention. “My father encouraged me to pursue a career in the business world,” says rainer. “he would later tell me that leaders should not become pastors unless they can do nothing else.”

Yet, while successful in the corporate world, rainer came to realize that he could not do anything but be a pastor. “i am woefully inadequate to lead the bride of Christ. Yet there is not a day i wake up and do not have a desire to lead the church. i love it, all of it.”

rainer – who also is the president of rainer research, a consult-ing company – shares with Church Executive his journey from the “cubicle to the pulpit” and the transitions along the way.

When and how did you know that you were called to pas-toral ministry?

i was raised in a pastor’s home, so i saw firsthand the rewards and challenges of leading a church. i also knew that i did not have the leadership grit and spiritual fortitude to shepherd a congregation. So i once told God i would do anything for him except be a pastor. rather than pursuing ministry, as a young professional, i desired to be the next great thing for business (i wasn’t).

i loved my corporate job, but i was not fulfilled. though i did not realize it, God was beginning my transition from the cubicle to the pulpit. in a random moment, my fiancé (now my wife) found an ad requesting a bi-vocational pastor. She told me about it, and we called the number. i started preaching at that church the following week. it was two hours away, but i fell in love with the people. Over the next couple of years, God grew the dead country church of six people with the terrible city-boy preacher. i thought God would keep me as a bi-vocational preacher, but he had different plans. After a couple of years, he called me to a full-time pastorate.

there was no one moment in which i felt God calling me to minis-try. rather, it was a process in which God used what appeared to be random opportunities to nudge me in his direction.

What are some of the things that you believe God used to prepare you for this calling?

the best preparation i received for the ministry was my local church. i started attending my sending church while in the corporate world for one reason: i really liked a young lady that was involved there. i grew spiritually as our relationship moved towards marriage.

While my motivation was less than spiritual for joining the church, God used it as a way to help me grow. it was in the local church that

BY rez GOpez-SindAC

Sen ior pastor | Stevens Street Bapt is t Church | Cookev i l le , tn

SAm S. rAiNEr iii

”i want to die here – old, leathered, scarred, and exhausted.” So says Sam rainer iii as he tries to articulate his deep love for the local church. Sure, the new senior pastor of Stevens Street Baptist church grew up in a christian home, yet his parents never pushed him into a ministry career. in fact, they did the opposite.

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my mentoring pastor helped me discern God’s calling. the local church provided me preaching opportunities to iron out a lot of wrinkles in how i communicate.

Growing up in a pastor’s home, my father and mother helped disciple me in the local church. Much of my early life was spent in the local church – literally every day after school. When God called me to pastor, it did not surprise anyone except me. Without the foundation of my local church, however, i would not have recognized God’s calling on my life.

You’ve gone through some transitions in ministry in the recent past. how do you know when it’s time to leave and when it’s time to welcome a new journey?

transitions in ministry require both a push and a pull factor. the push factor is something God uses to begin removing your passion in a particular position. For instance, an associate pastor may begin to feel the call to preach weekly, and his current position may not allow for him to preach.

the push away from a position or place is usually the first way in which God begins to prepare an individual for a transition. Without a pull factor, however, the call to transi-tion is incomplete.

it’s not enough simply to want to leave a place. in addition to a push away, God must also pull you towards a place. the pull factor becomes an open door for another ministry position, a deep desire for a specific geographic place, a heart for a particular people, or a new opportunity within a current place of ministry. i believe in most cases, both a push and a pull factor should be present to justify a ministry transition.

how do you prepare yourself and the staff you’re leaving to help keep relationships healthy and the transition as smoothly as possible?

transparency and time are two ways to help keep relationships healthy with the staff you are leaving. First, transparency is key. Most of the time your staff will recog-nize a change in your leadership. they will know something is up as you are working through a transition. Be transpar-ent with them.

Obviously, leaders must be careful not to reveal too much information too early. But most of your staff will feel it when God begins to remove your heart from a place. Walking your staff though both your push and pull factors will help them understand how and why God called you to a different place. Second, spend time with them as you leave. Make it a priority to have one-on-one meetings with your direct reports. Once your team knows you are leaving, stop leading them with a vision and focus on being a good friend to them.

When accepting a call to a new congregation, how do you handle the expectations of its leadership

and members?in the same way transparency and time are critical to

maintain healthy relationships with the people you are leav-ing, they are also important to the people in your new place of ministry. First, be open and transparent about your lead-ership style with the leadership in your new congregation. Set their expectations correctly. don’t over promise to get the job, then under deliver once on the field – that causes long-term leadership damage. don’t be afraid to point out some of your idiosyncrasies. everyone has foibles. And people pick up on them quickly. Show levity by admitting them to others in a tactful way. if you tend to ramble, tell people, “i like to think out loud.”

Communication will be easier if leaders recognize their own quirks. Second, spend time with your team and learn to love them. Some people in the church are easy to love. For others, it takes a little more time and spiritual commit-ment. But all the people in your new place of ministry need to see your leadership as loving.

What are some of the challenges you face when it comes to leading and developing staff.

i love thinking about the future. So much so that >>

rainer: You cannot lead what you do not live.

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ThE cE iNTErviEW

it’s tough for me to enjoy the moment. i can get so bogged down in planning for the future that i miss the impor-tance of spontaneous interaction. developing and leading staff is more than an outline for a successful 10-year plan. Being a good leader involves a willingness to interact with staff and key leaders on a regular

basis, even without a formal appoint-ment.

You have a young family, a new church to lead; you are the president of a consulting firm and you are finishing your PhD program – how do you juggle all these important roles?

i keep a disciplined schedule, and

i prioritize my time every day. i am intentional about being with my family in the morning because i know my evenings are often full. i also have a great wife who is a huge support. My wife has the same calling that i have. She desires to be a pastor’s wife. if that were not the case, then i would be miserable in my ministry position.

What makes you excited about your work as president of rainer research, and how does it help you as a church leader?

As a senior pastor, it is entirely too easy to stay in the church bubble. With mission work, programs and Bible studies happening every day, i could easily justify spending all my time with my congregation. rainer research enables me to see what the broader church world is doing across the nation. it excites me to see what other denominations are doing. i get great ideas for my own church by learning from other churches. And i stay abreast of cultural changes in my community by getting outside my own church circle.

What do you think are the critical factors that make or break church health and effectiveness?

effective church leaders live what they lead. if a pastor wants a church to reach outward, then that pastor will lead the outward movement by example. if a pastor wants a church to have a heart for cross-cultural missions, then that pastor should demonstrate a love for people of a different culture. if a church leader wants the congregation to emphasize a particular spiritual discipline (like Scripture memory), then the church leader should be involved with that spiritual discipline. the most effective church leaders will be healthy person-ally in areas where they want their church to be healthy. As one of my mentors often reminds me, you can-not lead what you do not live.

[www.StevensStreet.org; www.rainerresearch.com]

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every December some member approaches the pastoral staff with the promise of a large gift. Since one of the donor’s main motives seems to be a tax deduction, this article will address the tax rules that govern whether the gift is tax deductible.

A tax deductible gift is an unconditional, complete transfer of property from a donor to a church. the church must assume control over the cash or property from the donor. While donors can designate a particular ministry or department within the church, the donor cannot designate the gift to any specific individual, including a staff member.

No foreign entitythe donor cannot require that the funds be paid to another tax-exempt organization. the

donor cannot designate a foreign entity to receive the funds, including foreign religious organiza-tions and churches.

the church must timely issue a receipt to the donor. For gifts of $250 or more, the receipt must identify the donor(s), church, date of the gift and, for cash gifts, the amount of the gift. every receipt must state whether the donor received any goods or services in exchange for the gift. the donor must have the qualifying receipt in their possession when they file their tax return, usually April 15 each year.

if a noncash gift, the qualifying receipt must contain a detailed description of the item donated. if the value exceeds $500, the donor must file Form 8283 with his or her tax return. except for nonpublicly traded stock, if the value of the gift exceeds $5,000, the church must sign the Form 8283 and a qualifying appraisal must be attached. Form 8382 is not a sub-stitute for a qualifying receipt. if the church signed Form 8283, it must file Form 8282 if it disposes of the gifted property within three years of the gift.

Complications possibleMany donors give real estate because they can avoid income taxes that would arise

if they sold the property. they may deduct the fair market value of the real estate. Some-times the donor sells the real estate to the organization at a deeply discounted price. the donor realizes cash from the church and the church pays a reduced price. the difference between the appraised value and the actual cash paid is tax deductible. the organization must issue a qualifying receipt that does not report the dollar amount that is tax deductible. For example, the letter might state: “thank you for the donation of 12 acres located at 123 Main Street. Other than the $250,000 paid to you, no goods or services were provided other than general intangible religious benefits.”

Another complication arises when a vendor seeks to apply the bargain sale rules to their goods or services. First, the donation of services is never tax deductible. Second, the donation of most tangible personal property is limited to the lower of the fair market value of the item or donor’s basis in the donated property. As a result, the vendor cannot use the bargain sale rules to create a tax deduction without recognizing income.

Making tax- deductible, year-endWhen is an end-of-year gift tax-deductible — and when it’s not?

Frank Sommerville, JD, CPA, is a partner in the law firm of Weycer, Kaplan, Pulaski & Zuber, P.C., Dallas and Houston, TX. [www.wkpz.org]

By FrAnk SOMMerville

14 | ChurCh exeCutive | 01/2013

do you wish your church had its own app so that your attenders can stay connected and engaged throughout the week and even when they can’t physi-cally come to church?

Sometimes all it takes is a bribe your staff can’t resist – at least that’s the case for Maryland Community Church (MCC) in terre haute, in.

Associate pastor Scott telle explains: “Our senior pastor showed me the app elevation Church (Charlotte, nC) had just put out. he told me if i could find a way for MCC to make the same type of tool available for our congregation that he’d treat me to a steak dinner.”

the steak was delicious, says telle. And the app is nothing short of amaz-ing. “it gets our church literally into the hands of each of our attenders so they could share the experience with others.”

Launched in July 2011, the MCC mobile app allows church attenders to:

downloading the app to your phone and using your phone to access these services is easy enough for most people. But when it comes to making sure the app is working right, free of bugs and

stays updated, it’s best to leave the work to the experts.MCC used Subsplash Studio, maker of the Church App. “technology

is moving way too fast for a typical church staff to keep up with all the lat-est releases of phones and tablets,” says telle. “Companies like this hold the responsibility of keeping your app working and makes the process much more realistic.”

Making life easier for churchesin 2009, Subsplash Studio created the first app of its kind for Mars hills

Church in Seattle. Soon after, many churches started calling, asking if they could get their own app. thus, the Church App was born.

“We decided to develop a platform that would enable churches and ministries to have their own customized apps developed,” says Chris Sharpe, marketing lead at Subsplash.

“We take care of all of the code, publishing, consulting, tech support, analytics, bug fixes, OS updates, and we have developed an online Content Management System that makes it incredibly easy for churches to control their own apps,” Sharpe adds.

What this means is your church is in control of the layout, features, con-

Church on your fiNGErTiPSA mobile app expands your reach and impact.

BY rez GOpez-SindAC

tent and artwork you choose to put inside your app, and changes are seen in real time. Sharpe says a priority for Subsplash is to make experiencing Gospel content as good as it can be on a mobile device. “We really care about making good software that people want to use because with apps, if it’s not done right, people may lose interest very quickly.”

Sharpe adds that with mobile, it is really important to make sure your church has a plan moving forward. he says that if you were to create your own app, not only would you have to worry about mak-ing sure the code and design is done right the first time, but you would have to make sure you had a way to manage your app, keep it updated and deal with bug fixes.

“this can become very costly for churches looking to do their own app; that’s why we’ve tried to make sure it’s a fully loaded solution from day one,” says Sharpe.

it’s all about quality and content, he adds. if your app doesn’t work right or look good, people will disengage or delete it quickly. if there is no reason for people to use the app, then it is a waste of time and resources. Sharpe says churches that have great success with their apps have fresh content weekly and sometimes daily and have a lot of other resources such as blogs, calendars, online giving and ser-mon notes that people may want to gain access from anywhere.

Closing the gapOne church that did build its own app

is Gateway Church in Southlake, tx. Levi Jennings, director of web and technology development, supervised the development of the app from wireframe to production.

Jennings says the Gateway Church

■ Listen to and watch previous sermons.■ Share sermons with twitter, Facebook or email.■ read the Bible (includes Life Journal plan).■ read MCC pastor blogs.■ Give from their phone or ipad.■ See current announcements.

App is a tool that can help enhance the user’s spiritual life and provide ready access to the church community and resources anytime, anywhere. Launched in June 2012, the app allows members to connect with small groups, set reminders for church events, watch live streaming services and archived sermons, post prayer requests, manage their tithes and offerings, and much more.

to monitor the app’s effectiveness, Jennings says Gateway monitors statistics such as downloads and updates of the app, audio and video file views, prayer requests and giving information. Also, there are feed-back and support options both in the app and on its supporting website to serve the membership.

Jennings says the app is yet one more way Gate-way gets to know people’s stories and faith journeys. For example, Gateway recruited a retired member to join the church’s prayer ministry because of her active engagement in the “prayer wall,” praying for others and encouraging them with Scripture verses.

Another story belongs to a Gateway member who was in the hospital twice in five weeks with pneumonia. he and his wife watched the sermons on their phone and wrote, “the app closes the gap on connectivity issues.”

Jennings says tweets from members in Missouri, San diego and as far away as india express excitement of the app in keeping them connected to Gateway.

to churches looking to build their own mobile apps, Jennings advises them to have a very clear understanding of the functionality they want and to plan with the end user in mind.

“test, test, and test some more!” says Jennings. “establish a structured testing system to hit all key points in the app and everything in between. this will ensure consistent and thorough testing of each build. A simple spreadsheet can help you track changes, improvements and persistent issues as you progress.”

Playing catch-upFor Christ Chapel Bible Church, Fort Worth, tx, the road to developing a richer, more

robust app must start soon. Currently, church members can watch sermons and have access to Bible studies from their smart phones through the church app from truthcasting. But Suzin hines, creative director, knows Christ Chapel can do so much more.

“We have to come up with a new app,” says hines. “Anything created in the last year will offer more flexibility.”

the goal, she says, is to build upon the initial creation so “we can keep up with the times.” CE

01/2013 | ChurCh exeCutive | 15

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BY rYAn thOMpSOn

Should your church start a bus ministry?

“And the lord said unto the servant, Go out into the highways and hedges, and compel them to come in, that my house may be filled (Luke 14:23 KJV).”

the bus ministry may be the greatest evangelistic tool in the history of the local church. in the past 50 years, hundreds of millions of people have come to churches across America, riding in church buses and vans, to hear the Gospel message.

i firmly believe that a bus or van ministry should be an integral part of every church’s outreach program. Like any great endeavor, the bus ministry brings unique chal-lenges to a church.

A few thoughts for those considering this outreach:

Count the costmANPoWEr. Before you begin, recruit the neces-

sary volunteers to staff this ministry. every bus or van route needs a driver and captain. You may also need additional workers, vehicle mechanics and a secretary to take care of the paperwork, insurance and legal needs required by your state.

the bulk of the work for this ministry will be done on

it’s a great outreach tool, but it requires leadership, labor and funds.

SPEciAlSEcTioN BuS MiniStrY

Bus riders arrive at North valley Baptist church on Easter Sunday in beautiful outfits provided by the church members. Photos courtesy of Mike Moyer.

01/2013 | ChurCh exeCutive | 17

the weekends. in our church, an army of workers head out every Saturday morning, canvassing our community and inviting people to ride our buses to church. then, on Sunday morning, 25 buses travel back to those areas to pick up those who want to come to church.

moNEY. Set an annual budget for this ministry. You will need to decide if you should purchase or rent the needed vehicles. Our church has been involved in bus ministry for the past 37 years. For most of that time, we have owned and operated our fleet. however, there was a brief time when it became cost prohibitive to do this, and it was advantageous to rent our vehicles each week.

Your bus ministry will incur additional costs in gas, maintenance, insurance, promotions and giveaways for the riders throughout the year. raise the funds need-ed and be prepared for these expenses so

that your church can stay committed to this ministry for many years.

Lead the laborersMost likely, you will rely on volun-

teers to do this ministry – most of whom have never been involved in anything like it. invest your time and resources to teach them how to serve in this capac-ity safely, efficiently and effectively. in our church, we have hosted annual bus clinics featuring a guest speaker to help train our workers. in addition, we have a brief meeting every Saturday morning. We cover policies, discuss upcoming campaigns and address issues that arise. this weekly meeting is vital for our volun-teers to stay on the same page so that we can keep the ministry running safely and smoothly from week to week.

Reap the rewardsEArThlY rEWArDS. there is

nothing like seeing the smile on the face of a young child as he or she experiences church for the very first time. Many of our riders come from underprivileged homes. Some live in dysfunctional families and have faced unimaginable hurt in their young lives. to teach them a Bible story, give them some food, or maybe give a toy at Christmas brings a joy that can-not be described. every week, we have riders tell us that Sunday morning is the highlight of their week.

ETErNAl rEWArDS. A cumula-tive total of more than 1.1 million people have attended our church on the buses, hearing the Bible preached for the first time. thousands of those have trusted

Christ as their personal Savior through the years. these people probably would have never come to our church and may have never heard of Christ had there been no bus ministry in their city. there are now pastors, missionaries and faithful followers of Jesus scattered all around the world that were reached for Christ on our buses. We have seen countless eternal rewards by being involved in the bus ministry.

i can tell you from experience that the bus ministry is an invaluable part of our church. Our church would not be what it is today, and our eternal impact would have been significantly reduced, had we not stayed involved in this worthwhile work. if your church is involved in an outreach like this, i encourage you to stay faithful! if you don’t have a bus ministry, i would encourage you to prayerfully con-sider how your church may increase its outreach into the “highways and hedges to compel them to come in!” CE

Ryan Thompson is the administrative pastor at North Valley Baptist

Church in Santa Clara, CA. He is the author of Making a Difference, a bus

ministry book available through North Valley Publications.

Members of north valley Baptist Church pose for the annual “picture Sunday.” the church’s bus fleet can be seen lined up in the background. Below, right: every Sunday, 25 buses pick up those who want to come to church.

18 | ChurCh exeCutive | 01/2013

As i write this article i look at our bus ministry attendance report from last week. it read: total number of riders - 1,421. total number saved - 55. total number of workers - 205.

now, what have i learned in these 30 years i have been in bus minis-try?

BUS miNiSTrY iS ThE moST ProDUcTivE Tool iN fUlfilliNG ThE GrEAT commiSSioN. each week, as we go into the highways and hedges to bring in those who will come to hear the word of God, we are doing the work that God has called us to do – to win people to Christ, lead them to follow the Lord in believers baptism and disciple them with the word of God. time or space would not permit me to tell the stories of the pastors, missionaries, full-time Christian workers and soul winners that the bus ministry has produced through all these years.

BUS miNiSTrY rEqUirES PlANNiNG, orGANiZATioN AND lEADErShiP. As we read of the work of Jesus and his disciples, we quick-ly notice that their work was planned and organized, and Jesus provided leadership. One important thing to note is the number of times Jesus taught his disciples away from the multitudes – a “staff meeting” of sorts.

Jesus gave his disciples simple instructions, such as how to feed a multitude of hungry people, as well as instructions on doctrine and the focus of their work. Jesus constantly reminded his disciples to keep their eyes open to the harvest and the need for workers in the harvest.

looK AT ThE BUS miNiSTrY NoT AS AN ExPENSE BUT AN iNcomE ProviDEr. You may say, “We cannot afford to have a bus ministry.” the truth is, you cannot be an obedient church unless you are in some way going into the harvest field and bringing the lost to Christ and to church. perhaps you cannot afford a fleet of buses, but the mandate to win souls is plain and evident in the Scriptures. Further, you cannot ignore that we are instructed to reach out to the poor, the unfortunate and the “least” among us and bring them to Christ.

Some years ago a pastor told me that i would go financially broke try-ing to run buses and bringing in boys and girls to church. the truth is, God has so blessed our bus ministry it would take me a long time to tell you of

Lessons learned from 30 years of bus ministryThere are countless stories of christian workersand soul winners that bus ministries have produced.

BY JeFFerY J. FuGAte

SPEciAlSEcTioN BuS MiniStrY

A bus ministry worker at clays mill road Baptist church, lexington, KY, helps children get back on the bus after Sunday school to go back home.

01/2013 | ChurCh exeCutive | 19

the financial and personal blessings we continue to receive. i could tell you of those who serve in our church – wonderful families rearing their own children for the Lord who were reached through the bus ministry.

i could tell you of the business-man who visited our church on a Sunday and, seeing the faithful work of our bus workers, gave our church a check for $1 million! i am not say-ing that every church will receive a million dollars for working in the bus ministry – i am saying that i have learned that God provides as we care for the poor and those in need.

BUS miNiSTrY rEqUirES WiSDom. One big reason many do not participate in or operate a bus ministry is because the work is hard. the bus ministry can be a source of contention if it is not operated with care and wisdom. One example is the wisdom of organization. Just as we have nurseries and children churches for the little ones in our church, we must reach the young people of our cities in an effective and wise manner.

Currently we run special church services just for the young people who ride our buses. these ser-vices are designed with these young people in mind – from the songs that are used to the messages that are preached. they need to be reminded of simple doctrinal truths and simple behavioral principles.

i trust these words will inspire more churches to get involved in the most effective and productive soul-winning ministry in America. CE

Jeffery J. Fugate is the senior pastor of Clays Mill Road Baptist

Church in Lexington, KY. The church’s bus ministry

runs 24 bus routes, bringing more than 600 people to church

each Sunday. Dr. Fugate can be reached at

[email protected].

Kids excitedly get off the bus to go to their Sunday school class.

lEGAl ADvicE

20 | ChurCh exeCutive | 01/2013 01/2013 | ChurCh exeCutive | 21

Getting staff incorrect ‘class’

deciding whether an individual worker is an employee or independent contractor is an increasingly important decision and deserves every church and ministry’s full attention. it is often tempting for churches and ministries to classify workers as independent contractors so as to avoid paying employment and payroll taxes and providing employee benefits and otherwise minimize costs.

however, this is a very short-sided view that may cause some very real financial harm and liability exposure to your church or ministry if care is not exercised.

Misclassifying a worker as an independent contrac-tor can cause liability for failing to withhold and to pay the employer’s share of payroll taxes; exposure for fail-ing to include the individuals in employee benefits plans; the tax disqualification of retirement plans; and back wages, add-on damages, and penalties for failing to comply with wage-hour requirements. Also, even tougher

penalties are being contemplated by state and federal agencies.

Classify correctlySo, how can your church or ministry avoid misclassifi-

cation? First, begin with the realization that there is a pre-sumption by the internal revenue Service (irS) and other agencies that everyone working for an employer (such as your church or ministry) is an employee. this presumption can be overcome by the right facts establishing a worker is not an employee; however, the default position is that a worker is an employee and the burden is on the church or ministry to overcome this presumption.

unfortunately, a bright-line rule for making the fact-based determination of when someone becomes an independent contractor is not available. it just is not possible given the sometimes complicated nature of the analysis, including multi-tiered tests subject to differing interpretations and the fact that different agencies apply differing rules.

For instance, the department of Labor (dOL) and internal revenue Service (irS) apply slightly different crite-ria. But, there is a general framework of analysis that can greatly assist your church or ministry in making the correct classification. in addition to working through this general analysis, it is important to ultimately check with an experi-enced attorney who can not only help with the analysis, but also draft the appropriate legal agreement to document the classification and nature of the relationship depending on the context of the relationship.

Steps in classifying wellin regards to the general framework of analysis to fol-

low when classifying workers, the first step is to follow the dOL’s analysis by considering the “economic realities test,” which encompasses several factors. Courts sometimes apply different factors or weigh similar factors differently in evaluating whether an individual has been properly classified as an independent contractor, but the “economics realities test” is probably the best general test we have at this time. the following factors are examined as part of this test:

BY dAvid MiddLeBrOOk

20 | ChurCh exeCutive | 01/2013 01/2013 | ChurCh exeCutive | 21

2

3

4

5

6

1

no one factor is necessarily determinative. the ultimate question is whether as a cumulative matter they demonstrate that, in reality, the workers are economically dependent upon the organization for their livelihoods and, if so, then they are employees; but, if the factors dem-onstrate a fair amount of independence from the orga-nization, then it is more likely an independent contractor relationship exists.

economic realities testSecond, as indicated above, the irS does have its own

analytical framework, which is thankfully not necessarily contrary to dOL’s analysis. the irS framework can also be considered in concert with the dOL’s “economic realities test.” Before examining irS’ current analytical framework, note that irS used to advocate for a “twenty Factor test.”

however, Congress and the labor and business indus-tries all pressed the irS to simplify the test and make it more user-friendly. As a result, the “twenty Factor test” was transformed into an analytical framework that has 11 main tests organized into three main groups: (1) behavioral control, (2) financial control and (3) the type of relationship of the parties.

there are also separate tax Court and Supreme Court tests that have been used, but such analysis is beyond the scope of this article. Fortunately, there is a lot of overlap and commonality among the various tests.

So what should your church or ministry do once it realizes that the organization has made a mistake in the classification of a worker and/or has been contacted by the irS? don’t panic. Contact experienced legal counsel. experienced legal counsel can guide the organization through a worker classification audit and help determine whether the irS classification is correct and whether the organization qualifies for relief under what is known as irS Section 530 relief.

David Middlebrook is a partner with Anthony and Middlebrook of The Church Law Group, Grapevine,

TX. [www.ChurchLawGroup.com]

under the dOL “eCOnOMiCS reALitieS teSt,” YOur ChurCh Or MiniStrY ShOuLd COnSider:

the degree to which the person’s work is controlled by the organization;

the individual’s investment in facilities and equipment, if any;

the individual’s opportunities for profit or loss, if any;

the amount of any initiative, judgment or foresight the person uses in open-market competition;

the permanency of the relationship; and

Whether, and to what extent, the individual’s work is an integral part of the organization’s business or activities.

22 | ChurCh exeCutive | 01/2013

Although ever-changing, social media is an effective channel of commu-nication that many church leaders use to connect with their congregation and the larger community in which it exists. Still, many resist twitter, Facebook, Linkedin or even starting a blog, citing as reasons lack of time, knowledge, training and direct application.

Ministry begins when we connect with people. And people are increas-ingly choosing social media as their preferred method of interaction.

Social media is no longer optional. Church leaders need to adapt to new means of communication if they wish to be heard and to continue to be relevant.

of social media

The

commandments

create new opportunities to expand your reach and build a community.

BY Ben StrOup

7 bookS foR SoCiaL Media beGiNNeRS

1. Groundswell by Charlene Li and Josh Bernoff (Harvard Business School, 2008)

2. Content Rules by Ann Handley and C.C. Chapman (Wiley, 2010)

3. Tribes by Seth Godin (Portfolio, 2008)

4. The New Rules of Marketing and PR by David Meerman Scott (Wiley, 2010)

5. The Mesh by Lisa Gansky (Portfolio, 2010)

6. The Thank You Economy by Gary Vaynerchuk (HarperBusiness, 2011)

7. Trust Agents by Chris Brogan (Wiley, 2010)

01/2013 | ChurCh exeCutive | 23

two important observations:Social media is not a fad,

passing trend or distraction. it is a genuine way through which people engage and influence one another. Communication at its core is more about the target audience than the preferences of the messenger. When the roles are reversed, the end result is noise, clutter and spam.

it is the responsibility of the church leader to remove barri-ers to communication. Just as missionaries first learn the language and customs of the people they are trying to reach, church leaders must become familiar with the language and practice of social media so they can have the opportunity to be part of the conversation.

how can churches effective-ly use social media as a way to increase ministry impact? Consider these 10 things as you build a social media strategy for your church:

1. ENcoUrAGE USEr-GEN-ErATED coNTENT. Social media represents a shift in how content is created and distributed. “every person is a publisher” shouldn’t be a point of criticism. it should be embraced, recognizing that every-one brings their network of influence to the table. empower the people in

your pew to multiply the impact of your weekend experience, mission projects and community outreach.

2. mAKE iT ShArEABlE. When content is posted, some thought should be given to how people will be able to share this. if you make it difficult many people won’t even try. But if rating systems such as “Likes,” “tweet this,” and “Share this” are built into how you distribute content, it will make it much easier for someone to expose your church to their broader social network.

3. KEEP rElATioNShiPS ThE PrimArY focUS. Social media is not about efficiency or recreating direct mail metrics in the digital space. it’s one per-son connecting to another person. Be in different places online because people consume and interact with online content differently. take advantage of each of those platforms and their unique capabilities. But never forget that the tools are a conduit to long-term engagement and cultivation of interest, volunteers and financial support.

4. ProviDE vAlUE. don’t just put out stuff to fill “dead space.” Offer con-tent that is explicitly and implicitly beneficial to the person you’re trying to reach. it’s easy to think about what’s best for the organization when the focus is on how content can help people take the next step in their faith journey and feel more connected to your church community.

5. crEATE ExcEllENT coNTENT. take the time to be thoughtful. Con-tent is king and is the only currency that will survive in the economy of digital influence. You will be judged by how compelling, engaging and interactive your content is.

6. USE SociAl mEDiA STrATEGicAllY, NoT cASUAllY. take the time to establish goals for each digital platform. define key influencers within your church – both lay and staff – to create multiple “windows” into your community. employ someone to be responsible for the overall goals and objectives of this initiative and do what’s necessary to keep up to speed with digital consumption habits. Be intentional.

7. KEEP iT ShorT AND SimPlE. the digital space is not the place for your magnum opus. recognize that people don’t spend as much time reading online as they do traditional channels. keep the content short, helpful, practical and consistent. that’s what keeps people coming back for more.

8. mEASUrE – AND mEASUrE AGAiN. there are some excellent >>

We’ve been finding success with content marketing across the social media platforms by repurposing our video sermon messages. Our media team creates “60-Second Sermons” that are share-friendly because they are edited in a way that understands the context of the viewer who will be stumbling upon the micro-message in a discovery state of browsing.

These bite-sized nuggets of truth for spiritual browsers end up being viewed on a friend’s Facebook wall, via email or even as a link in a tweet

much more than full-length sermons that are found in the same places. One of the key aspects of our 60-second sermon edits is to get the viewer inter-ested enough in that week’s teaching that they’ll click over to watch the entire message or check out Liquid Church’s multi-site campuses or church online.

Kenny JuangMedia/Innovation pastorLiquid Church, Morristown, NJwww.liquidchurch.com

At Long Hollow, we feel like social media allows us to engage our community without forcing them to change their browsing habits or behavior. It allows us to connect with them where they’re already gathering with their friends, family and cowork-ers.

Eric MurrellInteractive Communications and Technology directorLong Hollow Baptist Church,Hendersonville, TNwww.longhollow.com

How CHuRCHeS aRe uSiNG SoCiaL Media

24 | ChurCh exeCutive | 01/2013 24 | ChurCh exeCutive | 01/2013 01/2013 | ChurCh exeCutive | 25

analytics tools that will help you chart your progress. Of course, the ultimate measure of engagement comes through how your investment in the digital space is creating interpersonal, offline relationships through the trust-building that takes place when you accurately employ a content strategy. people are checking out your church on twitter, Facebook and the Web way before they visit your church.

9. mArKET YoUr SociAl mEDiA PrESENcE. tell people that you’re online and where you are active. With a consistent flow of good content and a clear understanding of who you’re trying to engage with the various tools and platforms, you can have enough information to get started and keep things moving forward. You’ll have to make adjustments along the way, but that’s expected and inher-ent in the process of relationships anyway.

10. BE PATiENT. Social media has a lower barrier of entry in that it isn’t expensive to get started. though, the true cost is “sweat equity.” if you want immediate results, then you’ll be disappointed. it usually takes four to six

months to begin to see the fruit of your labor. if you’re committed to building influence in the digital space and recognizing its multiplying effect, you’ll see that the initial investment is far less than the expected benefit.

Church leaders who embrace social media will create new opportunities to engage with others, expand their reach, and ultimately build community in a much more systematic and sustainable approach. the question is not if your church will venture into social media, but when. the real learning begins when we put down books, articles, podcasts and seminars about social media and start doing social media. CE

Ben Stroup is a writer, blogger and consultant who helps individuals and organizations navigate the new

rules of conversation to achieve maximum impact. [www.BenStroup.com] [Blog: thecontentmatrix.com]

24 | ChurCh exeCutive | 01/2013 01/2013 | ChurCh exeCutive | 25

fiNANciAl SolUTioNS

there are many reasons why an organization might have a financial audit. Whether it’s to comply with debt cov-enants, satisfy an accreditation or membership require-ment, or provide an accountability tool and best practice, most people would agree that the audit process can seem painful. however, an audit provides significant value.

the first step is to find an auditor who is competent and experienced at working with churches. the benefit and result will be your confidence that the engagement team understands your operations and can provide valuable input. remember that you are choosing a ministry partner, not just a professional who will provide a signed audit opinion at the end of the engagement.

Once you have selected an auditor and signed an engagement letter, here are several practical suggestions

to minimize the “pain” of an audit.commUNicATE DEADliNES. Any deadlines that

must be met, such as audit committee and board meet-ings, bank submissions or grant deadlines, need to be communicated early in the process. there are many pieces to the audit puzzle and several of those are not seen by the church. Once an auditor walks out of your door, his or her work is only partially complete. A mutual understanding of expectations will minimize unpleasant surprises later.

PrEPArE ThroUGhoUT ThE YEAr. Auditors will provide lists of items to prepare prior to their visits. these are not merely suggestions. if they are not completed prior to the auditors’ arrival, the process will be off to a rocky start. A little-known secret of the auditing profession is that an item that takes you four hours to prepare may only take an auditor 20 minutes to test. if you’re not completely ready when your auditors arrive onsite, they will catch up to you very quickly.

Also keep in mind that the list you’re given is not com-prehensive. the items you prepare will lead to additional questions that can’t be anticipated before the audit begins. if new reports are requested, both you and the auditors may want to make note so the items can be added to the preparation list in the following year.

Also, certain reconciliations are difficult to do once a year. everyone realizes you shouldn’t reconcile the bank statement once a year, and the same is true of other functions as well. Consider reconciling the donor system to the general ledger contribution accounts monthly and comparing the quarterly Form 941 to the salary accounts each quarter.

Also, if you know that a purchase will be capitalized as an asset (like a new vehicle), you might consider filing a copy of the invoice in a folder so you don’t have to pull it again later. Many ministries we work with have an “audit” file that they place information in throughout the year.

fiNiSh STroNG. the adage of “out of sight, out of mind” is true even for an audit. it is important that as much of the audit process be completed as possible while the auditors are onsite. Once they leave, they will be working on other audits and you will feel like you are done with >>

BY vOnnA LAue

why you shouldn’t dread an audit

26 | ChurCh exeCutive | 01/2013 01/2013 | ChurCh exeCutive | 27

fiNANciAl SolUTioNS

the process. if there are open items, make sure you agree to completion deadlines so that time doesn’t drag on. When financial statements aren’t completed within a reasonable time frame, this is probably the single biggest reason why. Fortunately, it can be avoided with a little plan-ning and communication.

imPlEmENT SUGGESTioNS. For a ministry, the value of the audit isn’t just an audit report validating last year’s numbers. the most valuable part is often the management comment letter providing suggestions for improvements and highlighting any areas of control defi-ciency or other concerns. to realize the full value of an audit, your church should strive to implement each of the auditor’s recommendations or have a valid reason why another response makes sense.

if leadership and the board take these comments seri-ously, they will set the tone at the top and communicate the importance of doing things right. implementing the auditor’s recommendation may also help improve the audit process in future years.

if you have been apprehensive about an audit or dissatisfied with your current audit process, consider these suggestions. they may move you from dreading an audit like you would a root canal to thinking of it as an annual checkup and cleaning.

Vonna Laue is a partner in the CPA firm of CapinCrouse LLP, Brea, CA. She is the author of Essential Guide to

Church Finance. [www.CapinCrouse.com]

26 | ChurCh exeCutive | 01/2013 01/2013 | ChurCh exeCutive | 27

BUSiNESS mANAGEmENT

Whether it’s a first-time build or new phase of expan-sion, embarking on a project elicits both excitement and apprehension even for the most seasoned church profes-sional. thankfully, many common pitfalls can be easily avoided with the help of some careful navigation and plan-ning on the front end.

WhEN ESTABliShiNG A BUilDiNG commiTTEE, ExPErTiSE coUNTS. no matter how large or small the project scope, lenders appreciate a strong leadership team. Before you begin your journey, form a panel of lay professionals with diversified backgrounds, such as finance, real estate, construction, accounting, law and property development. A group of professionals will not only provide depth and experience to realizing your vision, but show potential lenders the level of talent that resides within your ministry. Be mindful, however, not to include the contractor or any other project-related vendor on the decision team. Although well-intended, this action can be

easily perceived as a conflict of interest through the eyes of the church body or financing source.

ASK qUESTioNS AND KNoW YoUr limiTS. Can you imagine a first-time homebuyer shopping without knowing his or her budget limitations? Significant deci-sions require careful and deliberate planning. All too often a church will make a mistake by engaging an architect without ever consulting with a lender as to how much they can realistically afford. By adopting a “financing first” approach, your team can make strategic planning deci-sions based on actual lending standards.

For years, many inexperienced church lenders have suggested debt levels to borrowers that are too high. Although the additional dollars may appear to be a blessing on the surface, the end result, however, can be expensive with irreversible side effects. this is where lender selection is essential. Look for a knowledgeable lender who can evaluate your current financial picture and provide you with clearly defined borrowing levels based on their extensive experience in the marketplace. Ask them about their approach. do they have a proven track record? Are their qualification standards clearly defined? do they have flexibility in loan structure or offer long-term rates?

DETAilS, DETAilS, DETAilS. When evaluating a loan request, a lender will expect to see a detailed budget that includes a balancing of all funding sources against the total cost of the project. understanding this concept is critical and may even require several discussions with your representative. Said differently, if the project cost exceeds your cash on hand, be sure your financing is safely in place before ever breaking ground. Signing your name to a project is a big step and should not be taken lightly. By not having the means to fulfill an obligation, it can jeopardize your organization’s good name and could easily result in reputational damage or even litigation with the builder.

Most lenders also require a 25 percent minimum cash equity contribution of total project costs, so plan accord-ingly. While a capital campaign can provide supplemental assistance to a ministry’s bottom line, pledge receipts that are specifically raised for a project will have to be deposited with the lender at loan closing to balance the sources and uses of funding for the project.

prior to approaching a lender for a loan commitment, the church management team should have an understand-ing of what level of debt the operating budget can sustain. Leadership should ask the question: Will we be able to manage our obligation from our operating budget >>

BY MArk WinterrOth

Preparing to borrow

28 | ChurCh exeCutive | 01/2013 01/2013 | ChurCh exeCutive | 29

BUSiNESS mANAGEmENT

once the capital campaign is over? in other words, how dependent is the church on the existing campaign to service the debt in place? relying on future growth projections and anticipated pledges is certainly conven-tional thinking; however, there should also be contingency plans.

AlloW ENoUGh TimE. underwriting, appraisal, environmental, title work, permits and documentation – these components all consume valuable time in the building and financing process. As an example, a standard church appraisal may take as long as four to six weeks to complete. in order to keep your project timeline on track, consider jumpstarting your application process and apply to lenders at least three months before your projected start date. Your lender decision should be made at least 60 days before breaking ground.

PUT YoUr BEST fooT forWArD. When submit-ting an application, be prepared to include at least three years of accurate financial statements, a detailed budget,

critical timeline, and outline of all project-related informa-tion. Capital campaign details, both present and past, will also be required. Lenders will also want to become familiar with the church’s management team. A detailed and well-organized package demonstrates thoughtful-ness to the lender and saves time during the evaluation process. As the old saying goes, “you only have one chance to make a first impression” – so do your best to make it count.

Mark Winterroth is vice president and relationship manager in the religious institution

division at San Francisco-based Bank of the West. [www.bankofthewest.com]

28 | ChurCh exeCutive | 01/2013 01/2013 | ChurCh exeCutive | 2901/2013 | ChurCh exeCutive | 29

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