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?
As a church treasurer, I often find myself immersed in tax and legal issues that affect church finances. When I came across this one, I thought I’d better give our readers a quick update.
One response to economic changes of the past few years has been increased concern at some ministries about the safety of their deposits. Increasing the federal deposit insurance limit to $250,000 helped ease some of that concern. Recently passed legislation may ease that tension a bit more.
Effective with the July 21, 2010 signing of the Dodd – Frank Act (or the “financial reform bill” as it’s more commonly known), non-interest-bearing credit union accounts now have unlimited insurance. That’s right…unlimited insurance. For ECCU members, this insurance coverage, which is provided by the National Credit Union Administration (NCUA), applies to any analyzed checking accounts. Coverage will be in place until January 1, 2013, unless extended by Congress.
Here are just two of many implications of this change:
- If your ministry maintains your operating accounts with ECCU as analyzed checking accounts, all the funds in those accounts will be insured. (This coverage is in addition to the $250,000 deposit insurance already available for other accounts.)
- By utilizing our Ministry Bonus Sweep Account, you can maximize return of excess funds while keeping checking balances separately insured.
We’ll be giving you more details about this legislation and how it can benefit your ministry on our website, but I wanted to give you the opportunity to be thinking about it now.