How intentional is your church about planning the offering time during worship services? In a recent Church Executive blog, one pastor observes that while at most churches the majority of each service is planned very carefully, the offering often isn’t.
“Typically the offering is three minutes of random musings, some thoughtful prayer offered at the end of the announcements and the ushers come forward,” writes Ken Behr, executive pastor at Christ Fellowship in Palm Beach Gardens, Florida. He suggests that this represents a missed teaching opportunity.
“The offering can actually be a very powerful and rewarding time for all when it is carefully planned and intentionally delivered,” Behr says. “With the right amount in intentionality the time for the offering can become, Three minutes of stewardship.”
And while three minutes isn’t much time, he says it’s enough to introduce one key biblical principle, and over three months, that’s an entire sermon’s worth of teaching on stewardship.
How does your church handle the offering time?
One of the chores we have in the ministry finance area is tracking and reporting to the IRS payments totaling at least $600 in a calendar year to a single recipient.
Complying with this requirement can be confusing. I find that many nonprofit organizations are not aware they are subject to these IRS reporting requirements. So, let me help by providing some guidance on what we are required to do related to reporting IRS Form 1099-MISC:
- Use IRS Form 1099-MISC for reporting payments (disbursements) made to any individual or unincorporated business in the course of your ministry operation in excess of $600 for the calendar year. So whether you make a lump sum payment or payments spread over the year, as long as the total is $600 or greater, you are required to report.
- Wages paid to employees to whom you provide a W-2 are exempt from this reporting requirement. Payments to individuals classified as independent contractors are reported on Form 1099-MISC.
- Generally, payments to corporations are exempt from the reporting requirement. The primary exception to this are payments for medical and health care which are reported in box 6 on Form 1099-MISC. Attorney fees are also reported and included in box 7 on Form 1099-MISC.
- If your ministry makes benevolence payments, these do not need to be reported. However, any benevolence payments to employees are reported on Form W-2.
- Reimbursements or expenses for travel and business which comply with your accountable expense reimbursement plan are not subject to reporting. Using this type of plan, expenses are only reimbursed if they are substantiated with the amount, date and business purpose. Expenses not covered by the plan, are reported on Form W-2 for employees and Form 1099-MISC for nonemployees.
- When making payments to an individual or entity that is subject to this reporting, you will need to obtain a signed Form W-9 which includes a taxpayer identification number. I find that obtaining this before you remit the funds is critical in getting the information you need.
- Payments made by a payments card, such as a corporate credit or debit card are subject to reporting for services purchased as long as they meet the criteria already mentioned. Purchases for goods (products) are not subject to reporting.
- By January 31 of each year, you are required to provide a copy of Form 1099-MISC to the recipient. In addition, you are required to remit all your 1099-MISC forms along with Form 1096 by February 28 of each year.
- The accounting system you utilize should have the ability to track/report all your identified recipients for reporting. This makes it much easier when you do your annual reporting.
Complying with these guidelines can be time consuming but not reporting your Form 1099-MISCs makes your ministry subject to penalties. For additional information and assistance, the IRS has Instructions for Form 1099-MISC.
True confession: I am not in favor of online giving, at least for tithing. Haven’t always felt this way, though. For years I was frustrated with my church for not “keeping up with the times” and offering electronic giving. I even went as far as using it as an excuse for my lack of consistent giving because, really, who can remember to write a check before rushing out the door Sunday morning?
But then I had a change of heart. I remembered that giving is an act of worship, not something to cross off my to-do list while paying the bills. And Sunday mornings are for worship. Every part of the church service is designed with one purpose: to bring honor and glory to God—even, perhaps especially, in our tithes and offerings. Since when is convenience part of sacrifice?
Now, I know others who tithe electronically and are still intentional about making it worshipful. And I know worship is certainly not limited to Sunday morning church. And I certainly understand the upside of online giving (in fact, my post on May 18 talked about how the majority of people, regardless of age, prefer to donate online).
I’m simply saying that, perhaps, when it comes to giving back to God what is his, worship through giving is better suited in the context of a worship service rather than at a computer screen.
What do you think?
Who can afford to accrue fees and penalties these days? If national charitable solicitation is not performed properly, fees and penalties may be unavoidable. Join ECFA (Evangelical Council for Financial Accountability) on Wednesday, June 22, for “Charitable Solicitation Issues.” This webinar will discuss the statutes imposed by states to enforce compliance with initial and annual registration requirements.
Presenters include Karl Emerson, Esq., counsel for Montgomery McCracken, and Dick Travis, president of The Travis Group, LLC.
Click here for more information and to register.
Managing a ministry’s money has a lot to do with managing risk. A recent article on Worshipfacilities.com confirms that insurance is a vital aspect of ministry risk management.
“Churches have insurance needs that require the services of a specialist,” writes Martin Sinderman. “On the property side, church buildings are often uniquely constructed facilities…which insurers unfamiliar with churches can have difficulties valuing and underwriting. On the liability side, today’s churches are more and more involved in activities that present risks, such as childcare and counseling.”
For these and other reasons, Sinderman reports that “churches need to take the time to plan for what they truly require when it comes to coverage.” He says that poor insurance decisions can cost your ministry money through increased exposure to risk and higher insurance costs.
Charlie Cutler, managing partner of Cutler Church Insurance, a Southern California firm specializing in risk management for churches, agrees. “Risk management is essential to church management. We live in a litigious society, and churches are more susceptible to lawsuits than they realize. The church without protection is like the soldier without a shield—vulnerable to attacks from people who assume you are covered.”
Have you found that time spent identifying the right risk management resources for your ministry has been a good investment?