ECCU Blog

With 87% of the U.S. adult population now carrying mobile phones, (52% of them Internet-enabled smartphones), people are changing the way they buy things.

According to a survey recently released by the Federal Reserve Bank, 15% of mobile phone users have purchased something with their phone in the past 12 months. The most common “purchase” is online bill payment, which may include a donation to your ministry organization.

Smartphones are also changing the way people make their buying decisions. 42% of smartphone users have used their phone to comparison shop while they’re at a retail location. And 32% of these users have used it to check prices by scanning a barcode.

How does this increasing use of mobile technology affect the way donors interact with our ministry organizations? It sure prompts a question: How easy do you make it for someone to donate using their phone? In a recent blog, Make Your Ministry Website Mobile Friendly, I offered eight tips that directly influence whether a mobile phone user will donate to your ministry.

All the experts I follow see an evolution in the way we interact and pay for things and say the next two to five years will bring significant changes in how we handle our money. Many of these changes will be tied to the use of our phones.

What are you doing at your ministry to anticipate these changes? At my church, I’m thinking about printing a QR code in our program so people with smartphones can more easily go to our online giving page.

What ideas do you have?

Does your pastor receive fees directly from individuals or families for performing marriages, funerals, or baptism services? If so, are these fees for professional service considered taxable income to the minister?

The short answer is yes. This practice has probably been going on since ministers began performing these functions. Your church may even suggest an appropriate amount for the family to give the minister.

According to the IRS (Treasury Reg. Section 1.61-2(a) (1)), “marriage fees and other contributions received by a clergyman for services” are considered income for the minister. However, since the fees for these services are paid directly to the minister from the family, the income would be considered self-employment earnings and not employee wages. Thus, this income would need to be reported by the minister on Schedule C of their income tax filings. So the church is not required to account for or report this income to the minister.

However, if your church pays other staff for functions performed, such as coordinating weddings or funerals, leading music, operating sound/technical equipment, or doing custodial work, the church is responsible to report these earnings on a W-2, since these people would all be considered employees for income tax purposes. And remember, overtime rules apply for this work as well.

I find it best to remind our pastoral staff of this requirement to report any income received for professional services so they don’t get into trouble for underreporting their income.

As you’d expect, since I’m talking about taxes here, I must offer the following caveat: This post is provided by ECCU for educational purposes only. It is not intended to be legal, tax, or accounting advice. ECCU disclaims any liability arising out of your use of or any financial position taken in reliance on information provided in this post.

According to a new survey published by the Barna Group, 79% of evangelicals have donated money in the past year, compared to 53% of born again non –evangelicals. Of those evangelicals who give, 66% give to their churches and 28% give to other non-profit organizations.

 Evangelical Christians are also the faith group that donates the most: 26% donated $2,500 to $5,000, and 6% donated over $10,000. This compares with a national average of 7% and 1% respectively in these amount categories.

 So the survey says that evangelicals do in fact donate more than others. Does this surprise you? Would you expect this?

 If we follow Jesus’ teaching, we should be the giving the most, because we understand that we have the most to be thankful for in the gift of God’s forgiveness through Jesus’ sacrifice. Plus, we understand that we are to be shrewd stewards of the resources we’ve been given.

 A question we should all be asking: “Am I a generous giver regardless of what the survey says?”

The way a ministry builds its budget has significant impact on how successfully the ministry lives out its mission. For larger ministries, the need for budgets to be built strategically and aligned missionally is crucial. The question is how. How do you build this kind of budget? 

I know this question is on ministry leaders’ minds because so many of them signed up for ECCU’s recent Advanced Budgeting webinar. So I’m looking forward to presenting an educational session on advanced budgeting at the upcoming Christian Leadership Alliance (CLA) 2013 National Conference in Anaheim, California. And I’m thrilled to be co-presenting with Caryn Ryan, whose credentials couldn’t be more impressive.

Caryn is the managing member and founder of Missionwell LLC, a full-service accounting, finance, and virtual office solution that exclusively serves nonprofits. She has extensive experience in major industry settings like Amoco Corporation and nonprofit settings like World Vision International, where she served as CFO.

To set the stage for our session at CLA, I asked Caryn a few questions about budget building.

Mark: Caryn, what are some strategic steps budget planners of large organizations should take to ensure that the process heads in the right direction?

Caryn: The most successful budgets have senior executives driving them. If the budget is a finance/accounting department effort only, it’s going to be less successful. Beyond alignment with the strategic plan, it’s helpful to have clear goals or business imperatives for the budget for the coming year. Examples might be absorbing new activity without affecting fixed costs, taking a deeper dive into the effectiveness of specific programs, freeing up funds to establish an operating reserve account of $XX without disrupting operations, or even starting a critical program when funding is at 60%.

Mark: Many ministries experience tension when it comes to aligning money and mission. What are some guiding principles or best practices to assure that a ministry’s budget reflects priorities?

Caryn: Aligning money with mission sounds easy, but is surprisingly hard to do! Start by listing out your strategic objectives/priorities, then translate them into strategic goals. Next, lay out multi-year strategies to achieve the goals. This is where the budget starts to come in. Each strategy (program or activity) requires direct resources, whether people and/or program dollars. Identify the direct resource (people and/or dollars) for each strategy at the level required in the budget year to achieve the longer-term goal.

Now the fun begins! Start a conversation to help answer these and other questions:

• Are resources available to fund all strategies?
• Do goals need to be adjusted?
• Are fixed costs and overhead affordable?
• Do programs or activities seem to move the organization towards its goals quickly enough?

The heart of the budget is to move the organization toward its goals efficiently.

Mark: What are some keys to assuring that a budget serves the organization well after it is approved?

Caryn: The simplest way to keep a budget alive is to consistently report actual results compared to the budget. Color coding variances can highlight the ones that are significant and require attention. Focus staff and teams on those variances. Also, keep in mind a budget doesn’t have to be completely financial. For instance, you can budget the non-financial elements of your balanced scorecard and report against those variances, too.

Budgets die after approval if they are not used as accountability tools!

If the organization doesn’t have a system of accountability, that should start with the board. The board negotiates with the president/executive director on what elements he or she will be held accountable. This may mean employing a flexible budget/agreement on what is and is not controllable in the year, or a range of acceptable outcomes around key line items. Pay increases, bonuses, and other rewards should be linked to achieving budget goals.

Another part of the accountability spectrum is staff—paid or unpaid, outsourced or direct employees. Once strategies have been funded in the budget, then people can be linked to the strategies. Typically, this is expressed as a percentage of a person’s time against an annual performance goal. The budget stays alive for the individual through their team meetings and meetings with supervisors as they compare actual performance to objectives aligned with the budget.

By Lorraine Mazza

Lorraine Mazza is managing director of development with Joni & Friends International Disability Center. She’ll participate in an educational session on giving that ECCU is presenting at the Christian Leadership Alliance 2013 National Conference in Anaheim, California.

“Don’t think only about your own affairs, but be interested in others, too, and what they are doing. Your attitude should be the same that Christ Jesus had.” (Philippians 2:4–5)

I have been asked so often about the guiding principles for working with major donors and how our ministry has been blessed with success in this area. I always respond in the same way: “Keep it personal.” Let me explain.

As Christians, we live in and are influenced by the secular world. Our high-tech, high-speed lives have often been created at the expense of true personal relationships. Much of what was once considered social graces has been replaced by expediency, creating the oxymoron “virtual personal relationship.” In the business world, companies must turn a profit. If it saves money, it’s “good.” Consequently, mechanical voices have replaced that all important first human touch with customers. Acknowledgements by email have replaced personal thank-you notes. Too many times the end (profit) justifies the means at the expense of personal contact.

For the Christian nonprofit, this rapidly widening cultural shift creates opportunity. We live in a world where a simple and consistent policy of building a personal relationship has become a distinct competitive advantage. As Christian fundraisers, we have committed our lives to a Savior that requires a personal relationship with Him and requires that we reach out in a personal way to others. The art of the personal relationship shouldn’t be left out of the development department. We should be the champions of personal relationships.

Fundraising, especially among major donors, cannot succeed unless it is fully integrated into the ministry culture from the top down and accepted as ministry itself, providing a service to the donor.

All fundraising is ultimately about personal relationships and about ministry to our donors and donor prospects. We cannot minister and bless these people unless we have developed some kind of personal relationship with them. To “keep it personal,” we must know our donors. Why did they give to our ministry? What is it about our ministry that drew them to us? The only way to answer these questions is to personally ask them. That means seeing people in person, calling them on the phone (without asking for money), or acknowledging them with a handwritten note. It means we ask for their prayer requests and pray for them. When we do this, we bless our supporters and all those our ministries serve.

Our desire is to honor God in everything we do. The secular world often seeks to be served by asking, “What are you going to do for me?” But the Bible tells us to put others first and ask, “How may I serve you?”