Removing the Mysteries about Church Finance. Jerry L. Johnson

the end of the following month. This would be our working capital.

      There was some fear among the deacons that the congregation would bolt, leave the church, burn the pews, or even behave drastically when they learned the full dimension of the situation. I disagreed and held to sharing information of the true plight. This was not my first church where the congregation was expected to support church operations with their tithes and offerings but were given pitiful little information as to the true condition of the finances.

      Lift the Lantern – Pretty or not, this is the way it is, folks, warts and all. Now let’s put our shoulders to it and change it. When you have a problem, lift the lantern and put some light on the problem. It always looks worse at night; morning light is a great problem reducer.

       Informing the Congregation

      I stood before them and explained where the church was financially, and asked, “Has anyone of you ever personally had financial trouble? Did you get up one morning and decide that you were going to get yourself in deep financial trouble?” They were very quiet. “Of course, you didn’t. It happens by degrees.”

      I told them the little story about dropping the swamp frog in hot water and watch him fly out; but when he is introduced to a bucket of cool water, he will acclimate as the water gradually heats. “That’s how it gradually came about but now I will show you how we will overcome this.” The pebble in your shoe gives you greater awareness of your foot. There is usually more than one layer to a problem and the first thing you see is generally only the tip. While the congregation did not recognize it as such, this was an example of 1Dr. Schein’s Basic Assumption, where something is accepted without question, because this is the way it has always been done.

       Turnaround Plan

      Then I outlined the turnaround plan to them and asked for their continued support. They showed their approval with a lot of hand clapping. The deacons were greatly relieved. I had not mentioned the pastor’s role in the mess or his future role. I wasn’t clear yet about his past role or his future role… well, that was out of my hands, and no mention was made of it.

      Based on the attendance, we agreed to ask the congregation for a $100 each over the following month over and above their normal giving. They responded magnificently! At the end of the year, when the average weekly tithe was figured, the $20,000 was only an accelerated tithe, and not an additional amount though in a few cases it was. However, that was fine, because it came in a cluster at a most critical time.

      You will see how the $20,000 was such a great help. Since the monthly tithes were averaging $27,500 adding 73% to the offering in one month made a huge difference. This allowed me to negotiate better deals with a few vendors and catch up with others. The important point is this would not have been possible had not the congregation become involved. The congregation liked that. They could handle the truth. Through that simple act, the congregation became part of the solution.

      Learning Point – Keeping the congregation in the information loop is a powerful tool. Fears that are not confronted will grow; one of the meanest is “If I tell them the whole truth, what they will think of me?” They will think you are honest, confident, resourceful.

      Most church goer's are familiar with 2 Chronicles 7:14, "If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways, then will I hear from heaven, and forgive their sin, and will heal their land." The Lord wants to help you (us), providing our self-help doesn't get in the way. He gave very specific instructions to get this church out of the hole they were in. Hebrews 4:16, "Let us therefore come boldly unto the throne of grace, that we may obtain mercy and find grace to help in time of need."

      The mission statement on the wall in the business office of one church stated it this way: "The business office serves with integrity, transparency, and foresight in our stewardship of church resources.” Integrity, transparency, and foresight are hard to beat anywhere, church, business, state office, your own home.

      _________

      1 Schein

      SECTION 3 - REVIEW

      1. What causes organizational change?

      2. To effect improvements, why would the whole church need to be involved?

      3. Describe symptoms vs problems.

      4. What is the transformational power of information?

      5. Which exerts the most power for change: Internal pressure or external pressure?

      6. How do you define the right problem without getting bogged in symptoms and side issues?

      SECTION 4 – HOW TO LOOK AT MONEY

      LESSON OBJECTIVE – Money is a tool for the church

      WHAT YOU WILL LEARN

      1. Three ways to understand money

      2. How to figure margin

      3. Difference between finance and accounting

      4. How to compute breakeven, and why it is important

      As a basic point, in the American tax structure the main difference between a non-profit organization and a for-profit organization is the non-profit does not pay tax. For the previous ten years or more, this church had been paying taxes: sales and excise tax. It went unnoticed.

      I started contacting various vendors about the sales tax they had collected from the church. A couple of vendors quickly reversed what they were doing and gave the church a small refund. The biggest offender was the electric power company and one of the telephone services the church used. I contacted them by phone and fax (they required a fax) requesting our tax status be reviewed and a refund paid. The power company had been charging tax since forever, even though the church was listed as a 501(c)(3)1. This was one of those “God looks out for you” kinds of things. I estimated they owed the church over $25,000 but could not provide documentation that many years back, and they could not document it either. They agreed they owed the church well over $10,000, enough to take care of the electric bill for three months during the summer when giving was at a low point. The telephone company came up with a refund over $500.

      When I took this bit of news to the congregation on Wednesday night, they were elated. Their hearts lifted. There was hope. The amount sounded like it was a lot bigger than it was, but it was enough to inspire. After all, who gets money back from the power company? It was bigger than it sounded, and I will show you how that was so.

      Here’s one of the examples where working together, we turned nickels into quarters and more. When God says he will multiply, that is not a throwaway line.

      Don’t put limits on what he can do. Just take what Jesus told the multitudes in Matthew 13:8 "But other fell into good ground, and brought forth fruit, some an hundredfold, some sixtyfold, some thirtyfold."

      A hundredfold increase; now that’s an increase! The first thing is believing it is possible. Belief is not a passive concept, however, so believing a hundredfold increase is possible while sitting on your hands seems to be contradictory. Before I tell you the rest of the story, it’s time for another lesson on money.

       Three Aspects of Money

      People are always asking, “Well, where DID the money go?” It can be a mystery if you don’t have the answer, like where did all the time go? There are three aspects of money whether the money goes into a church or into Ford Motor Company: Accounting, Finance, and Economics. Each has to do with the use of money, in different but complimentary ways. A church cannot make proper use of the contributions it receives if the church leaders are unaware of this.

       Accounting

      It does what the name implies, provides an accounting for when, how and from where the money comes. It is also a record of how it is spent. Picture putting the money into various buckets when it is received; for example,