ECCU Blog

Has it ever occurred to you that we need to be patient about learning patience? In terms of challenges and disappointments, no other season of my life has been as difficult as the past couple of years. But God, in his goodness, is faithful to strengthen our faith and deepen our knowledge of Him even in times of trial—especially in times of trial.

So, it is in this season of difficulty that I am—by God’s grace—growing more patient. Leader to leader, I’d like to share with you what I’m learning.

Deep patience comes only through trials. James 1:2-4 tells us to, “Consider it all joy, my brethren, when you encounter various trials, knowing that the testing of your faith produces endurance (perseverance). And let endurance have its perfect result, so that you may be perfect and complete, lacking in nothing.”

Through our trials we are sanctified, becoming more like Christ. There is joy in that! God uses life’s challenges to refine us, producing patience as we wait upon the Lord.

Deep patience sees God’s perfect timing in all things. Do you believe the Lord works all things for His purposes, and in His perfect time?  

Ecclesiastes 3 talks about how there is a season and time for everything:

• A time to seek: There are times when we eagerly build and gather (like building, growing, and expanding our ministry).
• A time to lose: In our earthly experience, nothing lasts forever. There is a time when God makes it clear that He has taught us all He intends in good times. Now a few years of famine and testing will be required.
• A time to keep: There are times when we need to hang on, to get everything we can out of a situation; to make the best of it. Times to do all we can to work through challenges. 
• A time to cast away: Then there are times when we just need to let go, to quit trying to hang on to every dime. This is the time to cut losses and move on, trusting God to restore, provide, and renew.

A time of difficulty is a time for patience. For waiting upon the Lord. Yes, we need to be busy in our labors, diligent in our efforts, and innovative in seeking godly, wise solutions. Yet our peace comes from patiently waiting and trusting in God’s perfect timing.

Deep patience sees God’s hand in everything. Nothing is outside of God’s power and control. Not even evil. Psalm 37:7 says, “Rest in the LORD and wait patiently for Him; Do not fret because of him who prospers in his way, Because of the man who carries out wicked schemes.”

Even if we are shocked by behavior, or wrongs done against us, we can be confident that God has not forsaken us. He is greater and higher than any earthly power.

God will make all things beautiful in his perfect time. I’ve been ready for this season of difficulty to be over for a long time now. But God reminds me, “Be patient. In due time, you will see my timing is perfect.” I believe God brings us through the trials in His time, not ours. But He does bring us through. Psalm 40 tells us, “I waited patiently for the LORD; And He inclined to me and heard my cry. He brought me up out of the pit of destruction, out of the miry clay, And He set my feet upon a rock making my footsteps firm. He put a new song in my mouth, a song of praise to our God; many will see and fear and will trust in the LORD.”

Are you learning to be patient about learning patience? What is God teaching you?

I’d like to add to Mark Jones’ last post on the importance of transparency in your ministry. If you dig a little deeper into the practicalities of transparency, you find an important discipline: Accountability. And accountability is what U.S. Senate Finance Committee member Charles Grassley is after.

After peering into the finances of some of the nation’s largest media-driven ministries, Senator Grassley has requested that a commission be formed to tackle the issues of concern. The cool part? Senator Grassley requested the Evangelical Council for Financial Accountability (ECFA) to spearhead this effort. 

The senator could have asked for a number of organizations to form a commission and make recommendations to him. That he asked ECFA to take the lead is a tribute to ECFA’s long standing reputation as an organization representing the highest levels of integrity and accountability among evangelical ministries members. ECFA has also set the standard for financial accountability even for non-ECFA members and other religious groups. 

In a January 5, 2011, letter to ECFA, Grassley asked ECFA for “input on how to address these issues and to help facilitate discussion on whether these issues can be addressed without legislation.” He said, “ECFA has a proven track record of accountability with its member organizations and is uniquely situated to work with representatives from the religious and broader nonprofit community.”

ECFA accepted the challenge and created the Commission on Accountability and Policy for Religious Organizations (ECFA.org/commission)  The commission will address some of the most challenging tax and policy issues involving religious organizations—issues that could potentially affect every house of worship and every member of the clergy in America. They include:

• Whether churches should file the same highly-detailed annual information return that other nonprofits must file (Form 990)
• Whether legislation is needed to curb reported abuses of the clergy housing allowance exclusion
• Whether the current prohibition against political campaign intervention by churches and other nonprofits should be repealed or modified

I’m privileged to be one of several ECFA-appointed commission members and am grateful for the opportunity. Personal and professional accountability and integrity are essential in ministry. I hope and expect that the work of the commission will raise the accountability bar for all religious organizations and further demonstrate why Congress and government agencies do not need to seek additional legislation or regulation that could hinder the freedoms we now enjoy. 

Are you an ECFA member? Post a comment and tell our readers how this relationship has bolstered your ministry’s accountability and integrity.

Back in late 2007, Senator Chuck Grassley wrote to six media-based ministries asking for responses to questions about ministry governance, expenses, and executive compensation. Interestingly, only two of the six ministries agreed to participate. While I’m sure the four ministries that didn’t respond believed it was the best decision, as someone “in the business” it troubles me that they may lack the transparency critical to operating a healthy ministry.

In the press release published by Senator Grassley on January 6, 2011, he provided detailed reviews of all six ministries. The reviews outlined the responses (or no responses) from the ministries, along with detailed investigative work on each of the ministries—especially those that had not responded. What was interesting to me was that even though these four ministries chose not to respond, much public information was available and gathered, allowing readers to draw their own conclusions.

So what’s the lesson learned? The importance of transparency in the work of ministry. Its not that we have to share every piece of information, like how much the custodian makes, but it is important that we operate in an environment where we show our stakeholders (as well as the world) how we are using the resources entrusted to us.

None of us got into ministry because we thought we would get rich or famous, but rather to impact the world for Christ. In the end, while God is certainly the only judge of our actions and motivations whose opinion we should care about, I do think we have a duty to operate with nothing to hide. I want my ministry practices to bring glory to God and not do anything to detract from that. What do you think?

On December 16, 2010, Congress passed a major tax bill impacting ministries and their staff—including a significant change in payroll processing effective January 1, 2011. According to the Evangelical Council for Financial Accountability (ECFA), here is a summary of the impact of the Social Security tax cut:

• Non-ministerial Social Security taxes.  For 2011 only, the OASDI portion of Social Security tax on employees is reduced from 6.2% to 4.2% on wages earned up to $106,800. The Medicare rate remains 1.45% for 2011.

What does this mean for churches? The change in the law does not save any money for the church but it does save dollars for employees. This 6.2% to 4.2% Social Security rate change only applies to non-ministerial employees (read on for the impact on ministers). The change does not apply to the employer (church) FICA tax rate of 6.2%. So for 2011 only, a church will withhold 4.2% Social Security tax and 1.45% Medicare tax (total of 5.65%) from non-ministerial employees (up to $106,800 of compensation) and the church will pay 6.2% Social Security tax and 2.9% Medicare tax (there is no maximum threshold on the Medicare tax).

More good news: this Social Security rate reduction does not have to be repaid when the church employee files their tax return—this is a one-year savings with no repayment.

Example:  Employee A receives $50,000 of FICA wages in 2011. A’s FICA tax for 2011 is $2,825. This is $1,000 less than it would have been without the payroll tax reduction ($50,000 x .02).

• Ministerial Social Security taxes.  The Self-Employment Contributions Act (SECA) imposes two taxes on self-employed individuals: a Social Security tax and a Medicare tax. These SECA taxes apply to net earnings from self-employment above a $400 minimum for the tax year. There is an annually-adjusted ceiling limitation on the amount subject to Social Security ($106,800 for 2011) but no limit on the Medicare tax.

For 2011 only, the self-employed Social Security tax rate is reduced from 12.4% to 10.4%. This parallels the two-percentage-point reduction in the Social Security portion of the employee’s FICA tax, from 6.2% to 4.2%.

So the SECA tax rate for 2011 on net earnings from self-employment up to $106,800 is 13.3% (10.4% Social Security tax and 2.9% Medicare tax).

Example: Taxpayer B has $50,000 of net earnings from self-employment in 2011. B’s SECA tax for 2011 is $6,650 ($5,200 Social Security tax and $1,450 Medicare tax). This is $1,000 less than it would have been without the payroll tax reduction ($50,000 x .02).

Another interesting point—the SECA tax deduction allowed on Line 27 of Form 1040 is not impacted by the reduction in the Social Security rate. For 2011, the one-half of self-employment deduction on Line 27 remains at 7.65%.

Ministers who have opted out of Social Security will not benefit from the payroll tax cut.

Have you adequately prepared for the Social Security tax rate changes? ECFA suggests you make the following preparations:

• Payroll processing for non-ministerial staff.  Churches will need to change their payroll processing for non-ministerial employees effective January 1, 2011 to reflect the new combined Social Security and Medicare withholding rate of 5.65% (the old rate was 7.65%).
• Voluntary withholding of income taxes for ministerial staff.  Your church may have a voluntary arrangement with ministerial staff for federal income tax withholding. Many ministers have enough federal income tax withheld to cover their Social Security tax obligation. If so, ministerial staff may wish to decrease their federal income tax withholding as of January 1, 2011 since they will owe 2% less SECA tax for 2011, on earnings of up to $106,800.

And don’t forget to communicate the rate change to your employees! Not such a bad announcement, since they will essentially receive a 2% bump-up in take-home pay.

What is the one area that we see derail more ministries than any other? I’m sure you’ve already guessed that it has little to do with macro economic conditions or the weather.

In good times and bad, the area that poses the greatest threat to ongoing success in ministry is a loss (or perceived loss) of integrity.

Here are three steps you can take to ensure that your ministry keeps—and strengthens—its financial integrity.

1. Create an involved finance committee. When I meet with churches, the norm is a conversation with the senior pastor and a bookkeeper—the best have a competent and involved team of people who work together to ensure checks and balances.
2. Hire an outside CPA. If your ministry has more than $500,000 in annual income, we recommend that you minimally have a CPA compilation every year, and I’d suggest a CPA review as well.
3. Communicate with your congregation or donors. Stay in regular contact with updates about the financial condition of the ministry. This not only ensures that they understand and can hold leadership accountable, but also makes it easier to ask for additional giving when it’s needed.

Of course, it helps to find a financial institution that is aligned with your values and works to preserve your financial integrity (Hey, I can’t resist…this is important!). Look for product offerings that reinforce your commitment to integrity (like ECCU’s Positive Pay, which ensures that every check your ministry writes is verified for the same amount when it hits your account), or services like our ministry banking assessments to keep your financial strategies on track.

Bottom line: Accountability is king. The more safety nets you have in place, the less likely you are to fall.

What does your ministry do to protect financial integrity? Please leave a comment and share your practices with our readers.