ECCU Blog

Cash reserves. If you’re like me, your eyes glaze over when these two words are used together. It’s certainly not the most exciting topic. But, what we have found through the current economic downturn is that cash reserves are more important than ever for ministries.

Why do ministries need cash reserves? Consider these actual situations:

• Over the winter, I must have gotten calls from 50 churches that were panicked by their outrageous heating bills—two to five times normal.
• Churches in places like Charlotte, North Carolina, and Atlanta, Georgia, that almost never see snow had to cancel all services some weekends, and therefore took in virtually no offerings.
• The earthquake in Haiti created massive need. Many churches wished they could help but didn’t have the extra cash to do it.
• July was the hottest month on record. Three churches I work with had to replace multiple HVAC units.

These are just a few recent examples of situations where adequate reserves could have allowed ministries to move forward instead of only wishing they could, or prevented them from having to pull funds from ministry to pay unexpected bills.

Building cash reserves is actually not as daunting as it may sound. Our ministry development officers can help evaluate how much you need and then help you implement a plan to get started raising those funds.

Also, by increasing reserves and communicating what you’re doing to your congregation or constituents, you will be increasing your financial integrity with your givers by demonstrating good stewardship. How do you build reserves?

Several months back, the California Credit Union League partnered with the Nevada Credit Union League to produce a series of commercials titled Credit Unions Work. The ad campaign highlighted the benefits of banking with credit unions instead of banks. Some of the benefits they articulated include:

Credit Unions = Nonprofit. Banks = For Profit.

While banks can do a great job serving customers, their overarching goal is to generate a profit for their shareholders. As nonprofit organizations, credit unions seek only to benefit their own members, because…

Members own the credit union.

Members who deposit money with credit unions are considered shareholders, so it really is about making transactions easier, building strong relationships, reducing costs, and putting their funds back into the community rather than increasing profits.                                                                          

ECCU is unique.

Here at ECCU, improving the member experience isn’t enough. It can’t be, because ECCU members are part of an exclusive group—Evangelical Christian ministries. That means that ECCU exists to make ministries more effective at pursuing their missions, which in one way or another is about advancing the kingdom. The ultimate goal isn’t building earthly treasures; it’s increasing eternal value.

This means ECCU offers financial services and expertise so that ministries can concentrate on building God’s kingdom. To see some of the ways we come alongside our member ministries, visit our stories of effective ministry videos page.

Member comments:

“One of the greatest things I can say about ECCU—it is a ministry. And it’s a business place, but it’s a place that’s led by the Lord.”

Philip Mensalvas, Church Administrator, Calvary Chapel Westgrove

“I would say to any other ministry, that before they take the Lord’s money to some secular bank, they really should give serious consideration to working with Evangelical Christian Credit Union. I know I can’t find another financial institution that would do what ECCU’s doing for ICR, because I’ve tried.”

Eileen Turner Spragins, CFO, Institute for Creation Research

“ECCU—the biggest thing—is that they believed in the mission God was calling us to. They haven’t just been this bank over there. They’ve been right here. I wouldn’t call them a bank. They’re a ministry partner.”

Susan Kennedy, Stewardship Director, The Rock Church

“…a common heart to serve people in the name of Christ. On a financial basis, ECCU is an extension of our ministry.”

Matthew Storer, President, Vision Trust

Have you experienced ECCU’s desire to help ministries be more effective so that kingdom work can thrive? Leave us a comment and let us know!

How do you plan on complying with the new Affordable Care Act provisions? Don’t worry, you’ve got some time to consider it, but it doesn’t hurt to start looking into options now.

Enacted on March 23 of this year, the Affordable Care Act requires all employers to start reporting the value of health insurance. Here’s a brief excerpt from a related IRS article: 

Starting in tax year 2011, the Affordable Care Act requires employers, including all nonprofits to report the value of the health insurance coverage they provide employees on each employee’s annual Form W-2. This reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers. The amount reported does not affect tax liability, as the value of the employer contribution to health coverage continues to be excludible from an employee’s income and it is not taxable.

If you use an outside payroll service, they will most likely contact you regarding what you will need to provide so that the required information can be included in your payroll data. If, however, you process your payroll in-house, you will have the fun task of figuring out how to fulfill this new requirement on your own.

We have until January 2012 to include this information on the W-2s we provide our staff, but it’s never too early to start thinking about it.

Do you have any easy ideas for making this transition at your ministry? Share them! I’d love to hear your comments!

I’ve sat in the executive pastor seat. I know how challenging (even seemingly impossible) it can be to get the rest of the staff, especially your lead pastor, to value the same priorities that you do when it comes to church revenues and expenses.

That’s one of the reasons we developed the four financial priorities model at ECCU.

We talk with hundreds of ministries every year, from church plants with a few hundred people to some of the largest and most sophisticated ministries in the country. Some are growing rapidly, others are fighting to survive. What we’ve found as we look at the common denominators is that ultimately, all ministries really should have four financial priorities:

1. Ensure Financial Integrity. Without this one, the other three are useless, even dangerous.
2. Maintain Adequate Liquidity. Churches that had this in place over the past two years have continued to thrive while those that didn’t are often struggling or even out of existence.
3. Maximize Cash Flow. All about maximizing giving while also controlling expenses.
4. Leverage Assets. Ensuring you are being the best possible steward of the resources God has blessed you with—people, property, and cash.

As with any priorities, the order of these four can change based on the current church situation, but frequent review and discussion can ensure that your church is putting the proper emphasis on good stewardship of the resources God has entrusted to you through your givers.

Over the coming weeks, I’ll unpack each priority in more detail and also share about an exciting tool that we’ve developed to help your church with the process of managing your financial priorities.

I like to scour the Web for posts or articles that might help ministry leaders make wise decisions. Since I work for a credit union, I usually find myself on finance-oriented websites or blogs. But this week I found something compelling on Paul Clark’s blog that I thought churches (I know, I owe non-church ministries a post, too) might want to read.

In his post Church Giving – Rules Have Changed, Paul piggybacks off Ben Stoup’s Spring 2010 NACBA Ledger article, which presented a shift in how church attendees assess the effectiveness of how their tithes are being utilized. According to Stoup, church attendees want to see the results that are being produced through their giving. They want to see ministry impact.

Paul uses this insight to springboard into a “scorecard” that may help churches determine whether or not their church is healthy. It also provides a means of showing congregations what their dollars are doing. Paul’s metrics are insightful, and sure to provoke conversation among church leaders.

So…why does a financial institution like ECCU care? Because our goal is the same as yours—to produce Kingdom impact. Item #10 in Paul Clark’s list is “[Church] budgetary needs are being met.” We work with ministries to ensure that their finances are sound, whether that relates to an upcoming loan renewal or ensuring a ministry has an appropriate level of cash reserves.

At ECCU, it has never been about profit. It’s about making ministries more effective. We play a small role in that, and we’re glad men (like Paul) and women across the world are looking at the bigger picture, because we love serving alongside those ministries.

What do you think of Paul Clark’s list? Is your church measuring any of these items? Are you planning to?