I wonder how many ministries had to replace their air conditioning systems during this summer of record-breaking heat. Maybe yours is one of them.
Did you have enough liquid funds to cover that expense, or did you have to come up with those funds another way? Maybe a special fundraising effort, a loan from your financial institution, or “borrowing” funds from another area of ministry?
Even if we do all the scheduled maintenance, things like AC systems and roofs and parking lots and carpeting eventually need to be repaired or replaced. Unfortunately, these expenses create an emergency for many ministry organizations because they don’t have funds set aside for them.
This is why you need a replacement reserve fund. It’s simply good stewardship of capital assets to have an account that’s specifically earmarked for the upkeep of your property, building, and contents.
Are you unsure how to calculate the appropriate replacement reserves? Here’s a good starting point:
- List all the items your ministry must maintain or eventually replace.
- Identify how long each item was expected to last when it was new (useful life in years).
- Determine the remaining life of each item (again in years).
- Determine how much it would cost to replace each item today.
By conducting this type of inventory, you can calculate how much should be in your replacement reserve fund today and how much to add to it each year. Better yet, you’ll avoid jeopardizing important ministry to pay for unexpected facilities expenses.
Need some help? We created a replacement reserves calculator tool that performs these calculations for you. (There’s no charge to use it.)
Have unexpected facilities expenses negatively impacted your ministry? Or have you been able to avoid situations like that because you have had a replacement reserve fund? Post a comment and tell us your story.
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 firstname.lastname@example.org.
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.
Matt Branaugh at Managing Your Church tweeted last week about a new resource that looks like it’s worth a look. The Essential Guide to Money for Church Boards ($19.95) is an eBook written by church legal and tax expert Richard Hammar. Topics covered include:
- Internal Controls
- Severance Packages
- Discretionary Funds
- Designated Contributions
- Housing Allowance
- Compensation Planning
- Excess Benefits
- Retirement Gifts
- Property Issues
What resources have you found helpful to help your board members better understand their role in overseeing the church’s finances?
A good budget can help your ministry plan for and stay focused on its highest priorities. Two new webinar recordings now available from ECCU present practical ideas to help you budget better.
Budgeting 101 is for ministries with annual revenues up to $2 million. It covers:
- Different budget approaches
- The importance of aligning your budget with your mission
- Specific steps for creating, approving, and implementing a budget
- How and why to monitor budgets carefully
Vonna Laue, audit partner with CapinCrouse LLP, presents withIngrid Robinson, founder/CEO of LenShaw Financial Services, andMark Jones, ECCU vice president and senior banking consultant.
Advanced Budgeting, for ministries with annual revenues of more than $2 million, goes beyond the principles of basic budgeting to examine the greater complexities of budgeting for larger ministries. It covers:
- Why and how to align money and mission
- The importance of accurately projecting revenue and how to do it
- How to use your budget to stay on mission
Arthur Wilson, CFO of The Park Ministries (Charlotte,North Carolina), presents with Billy Burnett, executive vice president and CFO with Joni andFriendsInternationalDisabilityCenter, andMark Jones, ECCU vice president and senior banking consultant.
These webinar recordings are free. To watch them, follow this link.