Church Business Administration Training Day 3

Legal and Tax Issues

Day 3 brought part 2 of Legal and Tax --- all things judicial!! Wow...huge responsibilities to avoid litigation. It's interesting that 70% of the world's lawyers are in the USA!!! Isn't that stunning! Actually, if we were to adopt the UK's system, we would see a dramatic drop in suits. In the UK if you bring suit, and you lose, you must pay both party's legal bills! Our current 'sue happy' society confirms that we are on the wrong track and too consumed with litigation. Scripture warns us against it. We need to be smart so that we are not exposed. If a church were charged with 'gross negligence', your insurance will not cover the litigation. I thought that was alarming. What are some procedures to put into place so that we're less exposed to lawsuits? One item that our instructor, Rick Veit, Esq., said would be important to adopt is an 'Arbitration Clause'. This document forces parties to 'sit down and talk about the issues' rather than civil lawsuits that divide. Imagine that, the Biblical principle of sitting down with your brother when there is a problem---sounds like a good plan!!! Churches should be incorporated for protection. We need to be proactive when using volunteers. We should be screening ALL volunteers. Especially those that are working with our children. An eye opener was the fact that the majority of those who molest children are under the age of 18! So we should be screening everyone, no matter who they are to protect our children. We were given a vehicle operator questionnaire. This should be completed and then investigated to be sure that those that are going to be driving for the church are safe drivers. We are responsible if we have not done our homework on those we trust with driving responsibilities and some tragedy happens! A mindset of being proactive is crucial. Employee handbooks should be up to date and consistently given to all employees (even if you only have one employee!). In the front of the handbook it should state that this is not a contract and that all employees are 'at will'. Employment files should contain: tax forms, contracts, job offer letter, resume, and reviews. Consistent reviews should be performed. They should be conducted honestly, being careful to represent the actual performance of the employee. I-9's (immigration forms) are to be kept in a separate file. When needing to dismiss an employee, your termination checklist should include: why the employee is being terminated, was it for a violation of their contract or by-laws/constitution, do you have supporting evidence, has the church violated any anti-discrimination laws, has the employee received advance warning, did you give the employee the opportunity to reform their behavior, is the reason for dismissal consistent with the performance evaluation. In regard to activities at the church, are you exercising reasonable care in the supervision of church activities? Keep in mind who decides 'reasonable'---a jury! You don't want that. Therefore, have preventative measures in place. Some examples are: adequate numbers of QUALIFIED adults at church sponsored activities, have a 'two adult' rule when in immediate contact with children, institute a 6-month rule (they must be a member for 6 months before deciding their involvement), parental consent forms, written policies, adequate security (especially when dealing with children). We discussed who is responsible for reporting any suspicion of child abuse. You should have a policy in place for reporting child abuse. You should have a 'Church Computer' policy. As we move closer and closer to Jesus' return, these issues will become more and more difficult. It is our duty to proceed in a manor that honors God when contemplating the issues of law and how they affect the Church!

Church Business Administration Training Day 1

Theology and Ethics of Church Business Administration

Our first day started out a bit heavy. The presenter, Professor Tom James, was very good. We were challenged to think deeply for most of the day! We talked about the priority of grace, sin as multi-faceted corruption, the knowledge that God loves us, and that we need to act responsibly in absolute dependence of our Creator. Act always as if responding to God's prior action upon you--if we act on our own resources we'll fail. We were challenged to creatively administrate in our churches. What would that look like? My suggestion would be to wait and pray---not feeling rushed to a decision. A priority of intimacy with our Savior is imperative! And in our work, a thick skin is necessary. The Professor quoted Martin Luther King Jr.'s 'Testament of Hope' that can be such an encouragement to us today in the world's current condition. There is hope through the love of God. We need a spirituality of business because we need a way of orienting our administrative practices, a way of opening the mundane to the presence of the Spirit! How could this happen? Slowing down, making it habitual to spend intentional time in prayer, don't feel the need to rush to a decision. Prayer is crucial to the opening up to the Spirit of God, not only in the utterance of petition....but the practice of learning to hear and listen. Don't we want to see more of the LORD? He wants to be seen in and through us, even the mundane!!!

Church Business Administration Training Day 2

Legal and Tax Matters

Now before most of you tune this section out....don't!!! It wasn't a 'snoozer'!! It was enlightening, eye-opening, and affirming. As sick as it may sound, IT WAS A FUN DAY! Today's emphasis was tax matters pertaining to the church. It is CRUCIAL that our churches are compliant. It jeopardizes the Body as a whole when churches struggle with compliance when it comes to tax matters. Our speaker today was Rick Veit, Esq. He was awesome and his heart for doing ministry correctly was very evident. He comes from a family of pastors and knows the importance of handling the tax issues we face with integrity. He completely admits that most accounting firms are unfamiliar with compliance for churches and pastors. He lead us toward Richard Hammar's published works--Church & Clergy Tax Guide as well as his monthly periodical, Church Law & Tax Report. We discussed all the federal reporting requirements. Who can be considered a 'minister' in order to claim a housing allowance? Do they meet the majority of these requirements: Ordained/licensed, performs religious worship, administers the sacraments, manages responsibilities in the church, considered to be a religious leader. We discussed self-employed vs. employee. One interesting fact is that you are less likely for audit if you are an 'employee' rather than an outside contractor (self-employed). We defined income. Love gifts are income...Christmas gifts are income....retirement gifts are a 'fuzzy' area! Forgiven debts are income. Non-accountable reimbursements of business expenses are income. There needs to be an accountable plan established for the reimbursement of business expenses. We discussed at length the Housing and Parsonage allowances. The IDEAL clergy tax reporting arrangement would be: considered an employee, withholding of income tax as well as self-employment tax, accountable reimbursement plan for business expenses, housing allowance properly designated by a church board, and adequate retirement contributions. Rick would be an excellent resource to our churches. He would gladly come and teach to any seminary the proper management of church tax and legal requirements.