After the economic crisis that began in 2008 triggered the Great Recession, news media reported countless stories of the impact on individual churches. Few of those stories included trends, because the data simply wasn’t available. Today, the numbers are in, and some of them are surprising.
The School of Philanthropy at Indiana University recently published the findings of a survey they conducted with more than 3000 churches. How did the Great Recession impact churches and how have congregations responded? Here are some key findings.
- U.S.congregations are generally improving financially. However, those with older attendees and those whose clergy are uninformed about congregational giving are experiencing the greatest challenges.
- Despite overall positive trends in fundraising receipts, pledges, and budgeting in 2011, the majority of congregations’ revenues have not kept pace with inflation in recent years.
- Changes in average congregational gift size and the number of donors are the main drivers of fundraising success.
- Congregations are increasing their budgets in the areas of missions and revenue-generating activity.
- Congregations have more work to do in the area of educating congregations on financial planning and charitable giving.
- The majority of congregations employ some type of electronic giving.
Are these findings consistent with what has happened at your church? If you have been successful in one of these areas, to what would attribute your success?
At my church, we weathered the Great Recession well, not that any one of us can take any credit. I do, however, believe that maintaining adequate cash reserves before the recession hit was one critical reason we were able to stay focused on our mission and vision. And by being transparent and letting our congregation know that we would live on what was given, we were able to build trust in a time of uncertainty.
What did your church or ministry do that helped it get through the Great Recession?
According to the IRS, the recent sequestration which has gone into effect is imposing automatic cuts to the Small Business Health Care Tax Credit claimed by many small ministries. As a result, the portion of your claim will be reduced by 8.7%. The sequestration reduction rate will be applied until the end of the fiscal year (Sept. 30, 2013) or intervening Congressional action, at which time the sequestration rate is subject to change. Check the IRS’s notice for more information.
It’s time again for the federal government to announce next year’s rates and limits for various federal programs. Some of those most applicable to ministries and their employees are:
- The IRS limit for elective deferral (contribution) limit for employees who participate in 401(k) or 403(b) plans will increase from $17,000 to $17,500. Read the full announcement from the IRS.
- The IRS limit for employees aged 50 and over who participate in 401(k) or 403(b) plans will remain unchanged at $5,500.
- The federal per diem rates for reimbursing staff for lodging, meals, and incidentals are listed by city or zip code at the U.S. General Services Administration website.
- Vehicle mileage reimbursement rates will continue at $0.55.5 per mile; the rate is expected to be revisited mid-2013.
- The foreign earned income exclusion rises to $97,500 from $95,100.
Notable tax changes that are set to expire or change in 2013 (unless they’re changed) include:
- Employee contributions to FSAs (flexible spending accounts) will be limited to $2500 annually.
- The reduced FICA payroll tax withholding of 4.2% on employees, which has been in effect for the past two years, is set to expire. The new rate will revert to 6.2%.
- Medicare tax rates are set to increase by 0.9% for all eligible earnings in January 2013 for higher income taxpayers.
As always, consult the IRS website for up-to-date information and changes.
Jesus said it is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God.
So how can you effectively disciple people who have significant financial resources in matters of generosity and stewardship? How can you engage their hearts and help them catch a vision for your church’s mission?
ECCU is hosting a Generis luncheon seminar, How to Disciple, Encourage, and Engage the Wealthy People in Your Church, on Thursday, October 18 from 11:00 a.m. to 1:30 p.m. Those who attend will learn from experts like Richard Watts, author of Fables of Fortune: What Rich People Have That You Don’t Want, and Generis Vice President Gerald Farley. They will discuss:
- Who the wealthy are in your congregation.
- Why they often stay hidden.
- What they need that they don’t already have.
- How to encourage wealthy people to invest more of their financial resources in ministry.
ECCU will host this free event for senior pastors and executive staff, which includes lunch, at its headquarters in Brea, California. To register, contact Sheri Kohlmann at 714.420.5092 or email@example.com.
Where can you learn about important ministry financial issues like the impact of ethics on accounting? How do you stay informed on legislative issues affecting ministries? What about fundraising best practices or the challenging task of aligning your ministry’s money and mission?
And where can you network with a couple hundred other ministry leaders while learning about these important topics?
The place to go is the 2012 Financial Forum for Ministries. For the fifth consecutive year, ECCU is teaming up with CapinCrouse LLP to offer this event in three California locations—Brea, San Diego, and Livermore.
This year’s presenters definitely know whereof they speak. One example is John Thornton, professor and Leung Endowed Chair of Accounting and Ethical Auditing at Azusa Pacific University, who will talk about the impact of ethics on accounting. John will present at all four Forums (presenters and topics will vary by location).
There’s no cost to attend these events, which include lunch and allow you to earn up to 4.5 CPE credits1 and 0.4 NACBA CEUs2.
If you’d like to see and hear what the Financial Forum for Ministries has to offer, check out these videos from last year’s Brea Forum:
In future posts I’ll introduce you to some of this year’s Forum presenters.
1CapinCrouse LLP is registered with the National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors through its website: www.learningmarket.org.
2CapinCrouse LLP is a National Registered Continuing Education Provider (NRCEP) with the National Association of Church Business Administration (NACBA). This program is a premier comprehensive continuing education program related to administration in the local church. It is designed to enhance the ongoing professional development of NACBA members and other ministry professionals, through the offering of quality learning experiences. 0.1 Continuing Education Units (CEUs) will be granted to persons who properly register and attend one contact hour of a minimum of 50 minutes of lecture, presentation, or discussion on approved topics.