Church Executive July/Aug 2016 Digital Version by Power Trade Media

JULY / AUGUST • 2016

H E L P I N G L E A D E R S B E C O M E B E T T E R S T E WA R D S .

CLIFTON GUY

Mobilizing management software’s ministry power at the largest UMC in the nation

PLUS Can your church really afford a pastor? 10 How to identify your biggest cybersecurity risks 9 The do’s and don’ts of renting your church facility 13

FROM THE EDITOR

It’s all about impact Though ours is a uniquely management- and leadership-focused publication for church leaders, our editorial focus is largely driven by ministry potential — specifically, those topics that have the capacity to drive big results … or, without the right strategies in place, result in big problems for the Church. This driver is prominent in two important thought leader series making their debut in this issue of Church Executive: Pastor-Friendly Microphones: Vincent Gabriel Antonini, CTS, National Sales Support / Business Development Manager for DPA Microphones, will become a familiar name to you in the coming months. That’s because he passionately believes the pastor’s microphone is an absolutely critical component in any church’s audio system setup — and he’s constantly “in the trenches” to ensure church his company’s clients understand this, too. But, many churches don’t, he concedes … at least, not initially. “Throw in the fact that a lot of church facilities don’t have perfect acoustics — and also that some attendees might have hearing issues — and it’s imperative that this first step of [microphone] acquisition be a premium one,” he explains. “Everything that follows will either degrade or attempt to enhance this signal.” Furthermore, Antonini says, choosing a less-than-optimal mic for your pastor is “like putting the worst-quality tires on your highperformance racecar. You just wouldn’t do that,” he explains. In his very first “Pastor-Friendly Microphones” Series installment (Listen up! The pastor’s mic is a make-or-break audio element, on page 26), you’ll learn all the reasons why the quality of the pastor’s mic should never be compromised, and how a truly “pastor-friendly” microphone looks — and sounds. Cyber Exposures in the Church: This timely new series was borne of data from our most recent Church Executive Reader Survey. It shows a vast majority of you (86%) consider cyber liability and cyber risks important topics for your churches’ daily church operations. To help you navigate this top-of-mind concern, we were fortunate to enlist the expertise of ChurchWest Insurance Services, with Managing Partner Charlie Cutler’s thought leadership at the helm. As Cutler points out in the first series installment (Cybersecurity! What it is — and how to identify your own church’s biggest risks, on page 9), a sizable 3.4 percent of the 40,000 hacks made per day in 2015 were against religious organizations. churchexecutive.com

“As you might already know, a data breach occurs when sensitive information — such as banking information or intellectual property — is stolen digitally, using a computer,” he explains. “In addition to financial information, personal information is also often the target of these thieves. Names, social security numbers, addresses and phone numbers are all targets once a network has been hacked.” Make sure you check out his article, as Cutler offers some compelling real-life examples of data breaches affecting churches and religious organizations … and their fallout. These include: • A financial data breach that cost a church nearly $200,000 • A breach which forced a church to rebuild all its records from scratch after this vital information was held for ransom • A church whose website was hijacked by ISIS / ISIL. (You can imagine the ramifications.) The list goes on … and it isn’t pretty. And yes, it really can happen at your church. Fortunately, in this series installment — and in subsequent ones — Cutler will help you identify your biggest cyber exposures; develop strategies for reducing your cyber risks; and navigate the ins and outs of cyber liability coverage. We hope these new offerings (and all the carefully tailored content in this issue) are beneficial to you and to your ministry. All the best,

churchexecutive.com Volume 15, No. 4 4742 N. 24th St., Ste. 340 Phoenix, AZ 85016 • 800.541.2670 RaeAnn Slaybaugh Editor in Chief rslaybaugh@churchexecutive.com Steve Gamble Art Director sgamble@churchexecutive.com Judi Victor CEO & Publisher / Director of Sales jvfly@churchexecutive.com Mitch Larson Business Manager mlarson@churchexecutive.com Blair McCarty Senior Sales & Marketing Coordinator bmccarty@churchexecutive.com Hannah Riley Marketing and Sales Associate hriley@churchexecutive.com

EDITORIAL ADVISORY PANEL Stephen Briggs Associate Pastor of Administration First Baptist Church | Hendersonville, NC Denise Craig Chief Financial Officer Abba’s House | Hixson, TN Mike Klockenbrink Chief of Staff Lakeside Church | Folsom, CA Dan Mikes Executive Vice President Bank of the West | San Ramon, CA John C. Mrazek III Executive Pastor Pathways Church | Denver, CO Sam S. Rainer III Senior Pastor West Bradenton Baptist Church | Bradenton, FL Mark Simmons Business Manager Christ Community Church | Milpitas, CA Eric Spacek Senior Manager GuideOne Insurance | West Des Moines, IA

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LET’S CHAT: Email: rslaybaugh@churchexecutive.com Facebook: ChurchExecutiveMagazine Twitter: @churchexecutive.com

Church Executive™ Magazine is published bi-monthly by Power Trade Media, a division of The Producers, Inc., 4742 N. 24th Street, Ste. 340, Phoenix, AZ 85016. Subscription Rates: United States and Mexico $39 (USD) one year, Canada $42 (USD) one year (GST included), all other countries $75 one year, single issue United States $5 (USD), all other countries $6 (USD). All articles in Church Executive™ Magazine are copyrighted and may not be reproduced in whole or in part without the express written permission of the publisher. For reprints of 100 or more, contact Judi Victor at (602) 265-7600 ext. 125. Copyright 2016 by Power Trade Media. No advertisement or description or reference to a product or service will be deemed as an endorsement, and no warranty is made or implied by Power Trade Media. Information is obtained from sources the editors believe reliable, accurate and timely, but no warranty is made or implied, and Power Trade Media is not responsible for errors or omissions. Opinions expressed in Church Executive™ Magazine are not necessarily those of the publisher or sponsors or advertisers. Content addressing legal, tax and other technical issues is not intended as professional advice and cannot be relied on as such; readers should consult with their own professional advisors.

July / August 2016 • CHURCH EXECUTIVE

July / August 2016

CONTENTS 14

INTELLIGENT CHURCH GIVING

Never ask again: 3 technology-driven strategies for increasing church giving By Joel Mikell & Derek Hazelet

CREATING A CULTURE OF GENEROSITY

Using giving data for ministry By the echurch content team

CHURCH MANAGEMENT SOFTWARE (ChMS)

Dos and don’ts for engaging church volunteers

By Bill Gifford

LEGAL REALITIES Examining church bylaws By David O. Middlebrook

NEW! PASTOR-FRIENDLY MICROPHONES

ALTERNATIVE FACILITY OPTIONS

Listen up! The pastor’s mic is a make-or-break audio element By Jim Peckham

How a non-traditional building approach can avoid traditional construction challenges By Jim Peckham

At New Venture Christian Fellowship in Oceanside, CA, visual impact is standard — and transparent. By Daniel Keller

THE UNITED METHODIST CHURCH OF THE RESURRECTION / LEAWOOD, KS

SAVINGS IN NUMBERS

For Clifton Guy, IT director at the largest UMC in America, church management software is a Godsend. So, when it was time to upgrade, his ChMS selection approach was systematic, disciplined, and driven by the ever-expanding ministry needs of this massive — and growing! — church.

PASTOR COACHING

10 reasons why every leader needs a coach By Shawn Lovejoy

BASIC CHURCH FINANCE

By RaeAnn Slaybaugh

Comparing loan offers: how to do an apples-to-apples comparison and make the best long-term choice By Darren Thompson and Richard Koon

FEATURES

STREAMING MADE SIMPLE

NEVER AGAIN: BEYOND INSURANCE

By Andrew Ng

By Frank Sommerville, JD, CPA

Don’t risk a lot for a little! Focus on: risk retention By Michael J. Bemi

SERIES

NEW! CYBER EXPOSURES IN THE CHURCH

How to save money for your ministry on the products churches buy most By Glen Witsaman

CATAPULTING PAST CRITICAL MASS

PROTECTING YOUR CHURCH’S RIGHT TO RELIGIOUS EXPRESSION

PASTOR-FRIENDLY SOUND SYSTEMS

COVER STORY

Cybersecurity! What it is — and how to identify your own church’s biggest risks By Charlie Cutler

FINANCES & ADMINISTRATION FOR CHURCH LEADERS

CAPITAL PLANNING FOR CHURCHES

DEPARTMENTS From the Editor

Can your church really afford a pastor? Maybe not in the traditional sense… By Rev. Dr. Sara E. Day, CFP®

Ignore at your own risk — the perils and pitfalls of not heeding your capital specialist’s advice By Matthew C. Swain, RS

INSURANCE ESSENTIALS

The do’s and don’ts of renting your church facility By Eric Spacek, JD, ARM

CHURCH EXECUTIVE • July / August 2016

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MISSION: ACCOMPLISHED

The United Methodist Church of the Resurrection / Leawood, Kansas

Catapulting past critical mass Clifton Guy, Director of Information Technology at The United Methodist Church of the Resurrection in Leawood, KS — the largest UMC in the nation — is a preacher’s kid. Two of his siblings are also pastors, as is his wife. “So, it’s kind of the ‘family business,’” he says. But, Clifton himself is a self-professed “technical guy,” with a real interest in computers since childhood. He earned his degree in computer engineering and embarked on a 10-year career in IT software development. He’s also an entrepreneur, having started two tech companies and served on the management team of two other startups. Coming from a family of pastors, Guy once considered himself the proverbial black sheep. Yet, it’s exactly this passion and experience that made him uniquely prepared to be the IT director at a very entrepreneurial, large and fast-growing church: Resurrection. Guy — who also has been part of the leadership team of The Church IT Network, with participants from many of the largest churches around the country — believes ChMS is a true ministry tool … and a major one, at that. “The church management system is where the real value-add is — that’s where the opportunity to really make an impact on ministry resides,” he emphasizes. “There’s this real opportunity to make ministry better by using software to either automate something, or to do something you can’t do with any amount of labor. The really exciting stuff is when we’re applying technology to the unique issues of the church.” So, Resurrection was in very good hands when it was time to upgrade its church management software platform. Here’s how Guy orchestrated an intensive, intelligent selection process … and what you need to know before making a similar investment at your own church. I understand Resurrection outgrew its existing ChMS, prompting leaders to look for a new option. What challenges were you encountering, specifically? Our previous ChMS was implemented in 1998, and I came on staff in 2003. In 2007, we determined that we needed to replace that system. I was involved in evaluating lots of options. A lot of the issues with previous ChMS had to do with the user interface; it didn’t really follow any of the traditional Microsoft user interface guidelines about how to use various kinds of controls on the screen. So, people who knew how to use Microsoft software had issues navigating the ChMS. It didn’t follow the paradigms they were used to. 6

CHURCH EXECUTIVE • July / August 2016

In general, it wasn’t designed to handle the hundreds of thousands — and in some aspects, millions — of records in our church database. It wasn’t efficient in running certain kinds of reports. With these challenges at the forefront, we did a very extensive, thorough and careful evaluation of alternatives. It took about three months and involved two things. First, we did extensive requirements-gathering. We developed a questionnaire and had meetings with staff throughout the organization, asking them all the same set of questions. This helped us to document, in detail, our requirements. The second aspect was networking with lots of vendors. We connected with their salespeople. Additionally, we established a set of five criteria by which we would judge the finalists. We invited those vendors to give extensive, in-person demos of their products for a small group of church staff we called “super-users.” Through that process, we narrowed down the list of choices to eight products. From there, we were able to narrow it to three, and then did some gap analysis on the functionalities those products delivered relative to our requirements. It was quite an extensive, thorough and careful evaluation. Ultimately, we settled on the Shelby Arena Premium product [ shelbysystems. com/products/arena ]. churchexecutive.com

MISSION: ACCOMPLISHED What functionalities made Arena the right choice for Resurrection? For us, one of the key issues was the architectural differences in the products. At the time, the business model of one of our three finalists was to host the system on their servers. So, any access to our data would be mediated by whatever reporting they provided, or by whatever APIs they might publish that we could then connect to in order to access the data. But, we knew we wanted to be able to run a Microsoft SQL Server in our own data center at the church. This would allow us to have the data present onsite, as well as the ability to use the entire range of powerful tools the SQL Server provides to drive insights out of that data. We just didn’t really want somebody else’s product to mediate our access to our own data. I’m told your team at Resurrection considered customized reports (driven by customized dashboards) another key functionality. Can you tell us what those look like — and what these tools can tell you about the church’s ministry efforts? We do some pretty cool stuff, and I could talk about it for hours. But, I’ll just give you a few examples. Some of these happen weekly; others happen annually or at different intervals. When we wanted to know if there’s a correlation between the duration of a household’s membership and their giving habits, we found out. This was because we can drill into the data. And, as it turns out, at Resurrection there isn’t a correlation! What we did find was a correlation between age and giving habits — specifically, the older people are, the more they give. And then, as they approach a certain age, their giving declines (somewhere around the upper 70’s, if I remember correctly). So, if somebody just joined our church recently, but they’re in their 60’s, they’re likely to give more than someone who’s been a member for 15 years and is in their 40’s. That’s just one example of the sort of thing we’re able to do because we can use all the software’s analytical tools directly against that data set. We also do some really interesting work around membership attendance data. It’s quite unusual for a church of our size to take worship attendance. In fact — though I’m not 100-percent sure — it’s possible that nobody as big as Resurrection does it. We use paper forms and an army of volunteers. For most churches, just the thought of the effort required to collect that data is so daunting that they dismiss it altogether. But, for us, attendance data is something we’ve always placed a high priority on, primarily because we can do lots of really interesting things with it. For example, if your family is a member, and you or someone else in the family doesn’t attend worship service for four weeks, we have a report that will inform our discipleship team. If we have your phone number, a volunteer will call and ask if everything is OK — if you or your family needs pastoral care. Frequently, we find there’s a new baby in the family, or people are just on vacation. If we can’t call, then we send an email. Failing that, we’ll send a paper letter to check in. That’s a good example of a ministry effort you can’t do without attendance data. Once a year (around August), we take a look at anybody we haven’t seen in worship for 13 weeks. These are the individuals who’ve basically dropped out for the summer. Then, we make a special effort to invite them to all our ministry offerings that kick off as the school year begins — activities for adults, kids and youth, special sermons series, and so on. All these are possible because, first, we have the data. Second, we have the powerful reporting capabilities to define exactly the set of people we’re interested in talking to, define the process, and then perform it.

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Does Resurrection’s multisite model make ChMS data accessibility a priority? If so, did it ultimately affect your selection? We’ve adopted a basic approach to multisite data that’s pretty similar to what lots of other large churches do: basically, we consider ourselves to be one church in multiple locations. Because of the data at hand, we can allocate giving by campus. We can get idea of whether the folks attending a particular campus are giving enough money to support the cost of that campus. We can also tell if one person, or a family, is consistently attending a particular campus — or a particular worship service, even, because we go all the way down to that level in our attendance tracking. And then, we can tell if they’ve actually changed campuses. That last part is really interesting to our executive management, especially if it seems like we’ve had dip in attendance. We want to know what’s driving that. We might drill into the data and discover we’ve got a new pastor at a particular campus. Then, over the course of the next several months, we see families shifting to that location. That stuff is fascinating to the executive management team when they’re trying to determine: Is there a problem at a particular location? Or, is it just that our people are choosing to attend a location that’s closer to their house? We’ve done that, too — looked at the people who move from one campus to another in relation to where they live. We just grab their addresses and put a bunch of push pins on a Google map. That ability is extremely helpful in interpreting the macro-data, which is just the head count and worship figures each week. Now, we have this much finer-grain data that helps us interpret it.

So, if you see that a family doesn’t necessarily live closer to their new chosen campus, you know something else is driving them there — and it gives you an opportunity to ask about it. That’s exactly right. They might prefer the campus pastor, or they might enjoy the worship bands better. They might like the children’s ministry. They might like the fact that it’s a smaller church. Or, it might be something else, stylistically or culturally. Your ChMS platform has even helped the church drive generosity and fundraising, right? Yeah. Again, we do some pretty amazing stuff in this regard. In fact, I’ve given a class on it at our annual leadership institute. I call it “the nerdy side” of financial stewardship. [laughs] At Resurrection, we conduct an annual fundraising pledge campaign for our yearly operating budget, as well as pledge campaigns for capital needs at various campuses. We start with what we call “the target” — we determine who we’re going to ask to make a pledge. We have a set of criteria: members who are 23 and up, who live in the Kansas City Metro area, and are active — in other words, they’ve attended worship at least July / August 2016 • CHURCH EXECUTIVE

MISSION: ACCOMPLISHED

once in the past year. We pull all the matching data from our database, and identify all the people who fit these criteria. Next, we identify “giving units.” Some households have more than one giving unit. For example, spouses sometimes choose to manage their giving separately. Each makes a separate income, and each makes separate contributions. So, even though it’s one household, it’s two giving units. Then, that’s the list of folks we’re going to ask to make a pledge. We do have some attrition due to death, relocation, marriage and so on. Then, we set the list and don’t add anyone to it. Throughout the campaign, we have a baseline for tracking how we’re doing. Once the pledge cards come in, we can see who has pledged and who hasn’t. Then, we can follow up. Now, this is a fairly traditional approach that lots of churches take. We take it farther because we segment the target by giving level. We look at the past 12 months — How much money has this giving unit given? — and put them in different segments. Now, when we get the pledges back, we can actually tell if, for example, we haven’t heard from 25 percent of the people in our top segment. Then, we do even more analysis on the pledges. We look at their pledge versus their pledge for the prior year. We also break down the data by whether or not this is a new pledge — if these folks have never made a pledge before — or if they’re renewing a pledge. And if they are renewing, is it for less money, for the same amount of money, or for more money? This is possible because of the analytical tools inherent to Arena and our SQL Server. As the church continues to grow, is your ChMS platform equipped to grow with you? I don’t think any church uses its software to its full capabilities. I’m sure we don’t, here. So, the question is more: Does the software automate the things we really need automated? And also: Does it allow us to do the kinds of analytics that we need to do? Because of a very careful selection process, we can answer ‘yes’ to both. In the future, will there be other products that potentially offer new features we haven’t considered or wanted before? Maybe. Probably. 8

CHURCH EXECUTIVE • July / August 2016

Will there be other systems that are more flexible in terms of how new software could be built or integrated? Maybe. Probably. But, because our software platform is based on a Microsoft SQL Server, it really isn’t limited in any way. Our church could grow to be much bigger than it is, and this platform would be capable of not only housing that quantity of data, but also reporting against it, all with reasonable speed. Certainly, the software and SQL Server we have in place is capable of supporting a very large church with millions of records in the database, like we have — or even more. Is there anything about the implementation or training process you would do differently? I do wish we could provide more ongoing training as a church. Like every growing organization, we have turnover; new people are constantly coming on the staff. Fortunately, Arena is fairly intuitive and self-explanatory. Even so, I wish we could accelerate their understanding and maybe show them some capabilities that would make their lives a bit better. It’s just that there are only so many hours in the day, and we haven’t prioritized ongoing training the way we did when we first did the software implementation. We really had a very smooth transition to Arena. For any church leader, I would highly recommend including training as an integral part of a major technology implementation. The part where we’ve been weak, as a church, is in ongoing training, not initial training. — Reporting by RaeAnn Slaybaugh

QUICK FACTS ABOUT RESURRECTION Year Established: 1990 Location of main campus: Leawood, KS Number of locations: 4 Number of staff (full- and part-time): 220 Combined weekend attendance: 11,300 2016 budget: $22 million churchexecutive.com

CYBER EXPOSURES IN THE CHURCH

Cybersecurity! What it is — and how to identify your own church’s biggest risks By Charlie Cutler Rarely does a day go by without a headline about data breaches. The victims we hear about include large financial institutions, international corporations, governmental agencies, Target, Home Depot, Sony, Citibank, NSA — the IRS and the list goes on. That’s nothing a church would need to worry about, right? I wish that were true. In 2015, a sizable 3.4 percent of the 40,000 hacks made per day were against religious organizations. (See chart, right) Data breaches are becoming increasingly problematic. As you might already know, a data breach occurs when sensitive information —such as banking information or intellectual property — is stolen digitally, using a computer. In addition to financial information, personal information is also often the target of these thieves. Names, social security numbers, addresses and phone numbers are all targets once a network has been hacked. To put this in perspective, let’s take a look at an example of how a data breach could potentially affect your ministry. In 2013, a children’s Christian theater in Southern California was targeted by malicious individuals attempting to test stolen credit cards. It started out as a great story — the ministry was receiving unsolicited donations on its website. What a fantastic blessing! Many of the staff wondered who was behind this campaign that would help spread the Gospel through their faithbased theater. Unfortunately, it soon became apparent that this wasn’t a benevolent viral campaign. In fact, it was someone testing stolen credit card numbers. Simply put, the bad guys would make a small donation using a stolen credit card number. If the charge went through, they would use that stolen number to rack up charges elsewhere. When the ministry learned what had happened, they were disappointed that the 947 donations were fraudulent. But the real shock was when those 947 charges were reversed. The ministry was responsible for not one $30 reversal fee, but 947! The resulting $28,410 bill could have forced this 20-year-old ministry — which had touched so many lives — to close its doors. Fortunately, however, Cyber Liability was included in the ministry’s insurance policy. With just a few calls from the insurance company to the bank, the charges were reversed. In the above scenario, the Christian theater was only part of a broader scheme. Victims of a financial data breach were having their stolen credit cards used in a fraudulent manner on the Christian theater’s website. As a result, the theater was on the hook for the financial cost of the transactions, whereas the owners of the credit cards were likely covered by their bank’s fraud protection practices. Here are some other ways that ministries (just like yours) have been victims of cyber theft: churchexecutive.com

A church’s online giving system was hacked, and someone gained access to their user names and passwords. The first day, $17,000 was taken. Each day after, approximately $3,000 more was stolen, until the thefts were discovered by the ministry. The grand total stolen was $181,709. A hacker was able to gain access to (and place malicious computer code on) a church’s shopping site. This allowed the hacker access to any new credit card information entered into the system. The church had to spend $15,000 to research the damage. In addition, it was required, by law, to offer its 1,800 customers professional ID protection. A church bookkeeper received a message on her screen that she had been the victim of a computer breach. As a result, she was locked out of the system. The message prompted her to call an unknown phone number to restore access to the computer. She allowed access to the hackers and immediately saw social security numbers show up on the screen. At that point, she knew something was wrong. Experts were hired to monitor credit for those affected.

Reprinted with permission from hackmageddon.com / “2015 Cyber Attacks Statistics” [ hackmageddon.com/2016/01/11/2015-cyber-attacks-statistics/ ]

A church received a notice that its records were frozen and held for ransom. The church didn’t pay the ransom, lost access to the records (which were not physically backed up), and is now rebuilding all of its records from scratch. An Australian-Syriac Catholic Church had its website hijacked by ISIS / ISIL. The terror group posted graphic images and videos of shootings and beheadings. Hackers logged into the church’s network and stole students’ personal information. They then used the information to obtain credit cards, running up high balances by claiming to be the students. Cyber risk isn’t just the risk of theft — it also extends to intellectual property issues, violation of privacy issues, and your online ministry. In the next segment of this three-part series, we’ll discuss the steps that your church should be taking to prevent cyber theft and cyber liability. Charlie Cutler is the Managing Partner of ChurchWest Insurance Services in Redlands, CA [ www.churchwest.com ], an insurance agency that specializes in insuring churches. ChurchWest currently insures more than 3,000 faith-based organizations. July / August 2016 • CHURCH EXECUTIVE

Can your church really afford a pastor? By Rev. Dr. Sara E. Day, CFP ®

Maybe not in the traditional sense… More and more churches are asking themselves if they can truly afford a pastor. As a result, discussions on clergy compensation, burdensome seminary debt, and alternative pastoral models are taking place in seminaries and denominational bodies across the country — and ultimately, this question (or a similar one) is at the core of those conversations.

CHURCH EXECUTIVE • July / August 2016

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ata released by the Pew Research Center on Religion and Public Life* affirms what has been known anecdotally for some time: The number of Americans who identify as Christian is decreasing. Since 2007, it has dropped by 7.8 percent, with the biggest drop being among mainline Protestants (4.8 percent) and Catholics (3.1 percent). For Evangelicals, the decrease is much less: .9 percent. These numbers tell us that American congregations are becoming smaller, which often leads to reduced financial resources. Add to this the burgeoning debt of many seminary graduates, and we have a growing number of available pastorates that are unable to offer pastors a living wage when faced with the financial realities of paying off large school loans. Though stories of wealthy pastors living lavishly abound in the media, in actuality, the number of pastors that fall into this category is very small. On the contrary, the vast majority of pastors and lay church workers are underpaid — especially when you consider their training and wide-ranging responsibilities. All these realities have led to a growing number of clergypersons who are serving in non-traditional pastorates. Along with the fundamental question of affordability, congregations might need to shift gears to discover alternatives that exist beyond the full-time pastor who is paid by a single source of income. As their circumstances change, churches that can open themselves to other possibilities and discern with God how best to use their resources can attract competent pastoral leaders while being good stewards of their financial assets. 3 PATTERNS OF PASTORAL MINISTRY Three patterns of pastoral ministry which have emerged over the course of the last 10 to 15 years are the bi-vocational, bi-ministerial and bicongregational pastorates. These are not necessarily new arrangements; they are, however, becoming the “new normal” for many more congregations as church membership fluctuates and decreases.

Bi-vocational. By recent estimates, approximately 25 percent to 50 percent of all clergy serving congregations in the U.S. are bi-vocational. Typically, they serve in a local congregation while receiving another income that is often from the secular world. In some cases, they are employed full-time in a position that provides them with health insurance and retirement benefits and work at their church 15 to 20 hours a week. Others might work 30 hours in their congregation and have a part-time position outside of the church. One blend of this model that pastors have enjoyed for many years is combining pastoring with teaching in a college or seminary as an adjunct instructor or professor. For many clergypersons, teaching in seminary is a natural extension of their pastoral role. It allows the seminary to offer students the benefits of studying with clergy who are actively pastoring and bring first-hand insights into the classroom. Bi-ministerial. A similar model gaining in popularity is the pastor who is bi-ministerial and works in another ministry, such as a chaplaincy churchexecutive.com

or a faith-based not-for-profit. Many seminaries are encouraging this avenue of ministry service for graduates because tremendous synergy can exist between the ministries, and they afford the pastor the opportunity to cultivate and exercise different gifts. Churches with a biministerial pastor might find they have access to increased community based mission activities because of their pastor’s connections in the notfor-profit world. Clergy might also experience greater flexibility between a pastoral position and one at a faith-based community organization during those times when they are called to preside at a funeral or be present for a member with a medical emergency. Bi-congregational. Itinerant preaching is how preachers made their living for many years in the U.S., often alternating between neighboring churches from Sunday to Sunday or preaching at two different churches each Sunday. The bi-congregational pastor is a variation on the full-time pastorate that is shared by two congregations in the same community. In this arrangement, the two churches share the expenses for the cost of their “full-time pastor.” In some ways, this is a more complex arrangement because, inevitably, the two congregations have very different needs, practices and cultures. One group might develop a stronger connection with the pastor. One way to address this is to make sure the two churches are affiliated with the same denominational body. This can mitigate potential preferences and conflicts. Another solution is to appoint a joint board or joint search committee consisting of leaders from each congregation. This group can conduct the pastoral search together and / or function as a pastoral relations committee to address any issues as they arise. As churches review alternative pastoral scenarios, it can be beneficial to consider creative payment arrangements that supplement what is likely to be reduced compensation. Churches can increase the amount of tax-advantaged compensation through retirement plan contributions, a housing allowance or an increased expense allowance. Other forms of compensation include a paid sabbatical or payment for continuing education. With each of these arrangements, clergy need to carefully work through the details of their compensation and establish clear boundaries and responsibilities, or they can find themselves functioning too much like a full-time pastor. Congregations have to be prepared to take on additional responsibilities that would have been handled by a full-time pastor and seek training to increase their leadership skills. Churches that view these changes as an opportunity to grow are most likely to successfully embrace these emerging choices to the traditional pastorate. Rev. Dr. Sara E. Day, CFP ® brings extensive experience in serving churches to her role as Director of Employer Relationship Management for MMBB Financial Services [ www.mmbb.org ]. In addition to fulfilling the service needs of MMBB employers and their staff in the Midwest for eight years, she served as senior pastor and director of campus ministry at the University Baptist Church in Columbus, OH. *Source: www.pewforum.org/2015/05/12/americas-changing-religious-landscape July / August 2016 • CHURCH EXECUTIVE

The spiritual benefits of capital planning By Dan Hotchkiss Each year, thousands of people come to Mater Dolorosa in search of spiritual enrichment. Mater Dolorosa — a Passionist retreat center in the San Gabriel foothills, in the city of Sierra Madre near Los Angeles — is a sacred place whose spiritual work depends on some decidedly material things. Missionstyle buildings, a stunning outdoor Stations of the Cross, and many other physical improvements set the stage for lives to be changed in faith. To help preserve the beauty and soul-changing power of the places in their care, Mater Dolorosa’s board and staff rely on a professionally prepared capital plan.

he plan enables Mater Dolorosa to set aside enough each year to indefinitely fund expected maintenance. Like many other institutions, Mater Dolorosa once took a much more casual approach to maintenance funding. Ron Brown, a long-time board member, recalls: “They had a couple hundred thousand in the bank and thought they were doing fine. But they were not fine. There was no real plan. It took some time for people to see how much we actually needed to be putting into our reserve fund.” Starting around 10 years ago, that began to change. After much discussion, Mater Dolorosa’s management and board decided to invest in a capital plan conducted by Association Reserves, a company with a 30-year history of doing similar plans (known as Reserve Studies) for condominium associations. Matthew Swain, RS, the company’s national representative for Worship Facilities, inspected each of Mater Dolorosa’s buildings and outdoor assets, estimating the useful lifespan of each component, the number of years remaining, and the cost of renovation or replacement. The plan lists each significant component of the Mater Dolorosa buildings, outdoor improvements, and major equipment. For each component, the plan indicates how much Mater Dolorosa should have in its maintenance fund, and how much it should set aside each year, to be prepared for the eventual cost of renovation or replacement.

CHURCH EXECUTIVE • July / August 2016

The eastern section of the main building, for example, has a tile roof that measures about 10,600 square feet and was installed in 1995. The 2015 capital plan reports that the roof should last about five more years. At that point, it will need to be renovated at a cost of around $74,200. To be prepared for this, the plan advises Mater Dolorosa to hold $63,600 — or 30/35 of $74,200 this year — in its maintenance reserve fund, and to add another 1/35th of the expected cost (or $2,120) each year in order to stay fully funded. And that’s just one roof! Adding up all the numbers for each of some 200 components yields a truly frightening grand total. In Mater Dolorosa’s case, the fully funded balance — as of July 1, 2015 — was about $2 million, with a recommended annual contribution amount of $230,000. Mater Dolorosa has fully funded its maintenance reserve for a decade now; but, as Ron Brown recalls, such clear-eyed estimates came as a shock when they were first presented. “Without a capital plan, an organization could find itself pushing ahead on a new capital expenditure when, in fact, it can’t afford the property it has already.” Elizabeth Velarde, administrator for Mater Dolorosa, agrees and says a professional capital plan represents a significant expenditure in an otherwise stringent budget. “But it has proven many times over to be a worthwhile management tool for retreat center staff,” she adds. “We have a site inspection-based study conducted every several years, with no-sitevisit updates performed annually in between. Association Reserves has made that possible with attractive update packages.” Having an outside, professional opinion has made it easier for the retreat center to set aside adequate funds. Certified Reserve Specialist Matthew Swain, RS, points out that many churches find it more comfortable to ignore ongoing deterioration than face the daunting shortfalls a capital plan could reveal. Church leaders might assume that future capital fund drives will pay for maintenance costs, or worry that having too much money in the bank might hamper capital fundraising. But, as Brown points out, “major donors are sophisticated” — and they increasingly expect to see a plan for the care and sustainability of the facility. A professionally done capital plan reassures donors that their gifts will be well used. “Last year, we completed a major renovation of our Stations of the Cross, which was made possible by a million-dollar fund drive,” Velarde says. “So, having maintenance funds set aside didn’t hamper our fundraising efforts for this very important capital project.” Dan Hotchkiss is a freelance writer and consults with congregations and other mission-driven groups from his home near Boston. He is the author of Governance and Ministry: Rethinking Board Leadership, which has helped hundreds of churches, synagogues, and non-profit organizations to streamline their structure and become more mission-focused and effective.

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THE DO’S AND DON’TS OF RENTING YOUR CHURCH FACILITY By Eric Spacek, JD, ARM

From weddings and banquets, to meetings and basketball practice, chances are your church receives rental requests on a regular basis. Opening your church’s doors to outside organizations is another way to extend your ministry into your community — but it might also open the door for safety and liability issues, such as property damage, theft, or tumbles on slippery surfaces. With smart planning, trusted use policies and a thorough review process, it’s possible to protect your place of worship and be a good neighbor. Keep these considerations in mind when renting your facility:

• Do church members get priority if two groups want the space at the same time? • Must someone from the church be present when an outside group uses the facility? • Must childcare providers be selected and screened by your church? • How will damage, injury or theft be handled? DON’T make decisions alone. Form a team of church leaders, plus legal and financial counsel, to approve or deny rental requests depending on the organization, the type of event, and potential legal and tax implications. The approvals team should document their decisions. DO ask questions. Before giving a group the green light to use your church’s space, do your homework. Find out what specific type of event the group is hosting, approximately how many people will attend, which room(s) the group needs, and how exactly participants will use the space. When possible, check venue references at places where the group has held past events. DON’T skimp on insurance. Make sure that any group that rents space in your church has insurance coverage limits that are equal to or higher than your church’s insurance policy limits, and confirm that the group names your church as an additional insured on their policies. Secure proof that your church has been named as an additional insured on their insurance.

DO set ground rules. Saying “yes” or “no” to use requests is much easier when you have streamlined guidelines in place — guidelines influenced by legal and financial advisors. Create a go-to facility use policy that includes, but is not limited to, the following factors: • W ill you allow members of the public or outside organizations to rent your facility, or limit it to church or ministry uses? Note that opening your facility to the public can have potential tax and/or legal liability implications. • Which rooms in your church (the sanctuary, fellowship hall, classrooms, kitchen and nursery, for instance) are open to users, and which aren’t? • What will you charge for rental fees and related expenses? Will church members pay less than nonmembers? • Who is responsible for setup and cleanup? • Will you allow sales during events? churchexecutive.com

DO get everything in writing. Have approved groups sign a Facility Use Agreement that outlines essential details: costs, time of use, and your expectations. Additionally, make sure the agreement includes a release from liability — a “hold harmless” clause that indemnifies your church in the event of injuries or damage and requires proof of insurance. Review your Facility Use Agreement annually to ensure it aligns with your church’s use policies and mission. DON’T ignore facility maintenance. As the “lessor” of space, you have an obligation to provide a safe facility. Limit risk by keeping your facility in tip-top shape inside and out. Remove tripping hazards, secure valuables, and mark and clear slippery surfaces. It’s a good idea to conduct pre- and post-event building walkthroughs and assessments. It’s always better to be safe than sorry — and sometimes it makes better sense to say “no” to rental requests. By making building use policies a priority and implementing these six strategies, you can gain peace of mind and help minimize risk for everyone involved. Eric Spacek, JD, ARM is the Director of Risk Management and Loss Control at GuideOne Insurance [ www.guideone.com ] in West Des Moines, IA. Before joining GuideOne, he served as Minister of Operations for a large Methodist church in Raleigh, NC, and was a liability litigation trial attorney in Washington, D.C. July / August 2016 • CHURCH EXECUTIVE

Intelligent Church Giving

Never ask

AGAIN 3 technology-driven strategies for increasing church giving By Joel Mikell & Derek Hazelet

You didn’t get into ministry because you enjoy asking people for money from the platform. And yet, sometimes that seems like the only option in order to fully fund the work your church is doing. If you’re facing this dilemma, you’re not alone. There are hundreds of other church leaders dealing with the same challenge. Some church leaders are in the middle of a summer giving slump and wondering how they can make it through the rest of the year. Other church leaders are looking for ways to fulfill the commitments for their capital campaign, but the gifts aren’t coming in as easily as the pledges that were made on Commitment Sunday. Regardless of the situation, you’re probably searching for any other way to increase generosity without having to make another announcement about it. 3 technology-driven strategies for increasing church giving At RSI, we’ve been working to help church leaders overcome these challenges by adapting the various communication tools and strategies used by today’s leading non-profit organizations. Here are three discoveries that your church can use to increase generosity without having to make another ask from the platform: #1: Allow church members to manage their giving the same way they manage all their other finances. Many church leaders assume that e-giving is just for Millennials. But, according to a recent study by Vanco Payments [ vancopayments.com/faith-based-resources ], 60 percent of all churchgoers — both young and old — prefer to give electronically. Allowing people to give online is an essential first step. 14

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But, what if your church is already offering online giving? Is there anything else you can do? Yes, there is. As the popularity of online giving has continued to rise, we’ve been exploring how churches can enhance the online giving experience. We’ve developed a specific tool to enhance the campaign pledge management and fulfillment process. This tool gives church members a personal platform to manage their giving. It also allows church leaders to manage your efforts by integrating with your current systems so that you can monitor and measure holistically, in a way that wasn’t possible before. We live in an increasingly paperless society, where people manage their bank accounts, bills and investment portfolios online. Today’s church members don’t just want their church to provide the ability to manage their giving online — they expect it. #2: Enhance your engagement and discipleship process through relevant and consistent communication across every platform. If giving is a spiritual decision before a financial one, then guiding people towards deeper levels of generosity requires an intentional process that engages people through personal and relevant interactions. However, many churches are communicating with every person the same way with their digital efforts, blasting the entire congregation with the same message. Technology has made it easier than ever to create this one-on-one experience. By segmenting your email communication efforts to target various groups within your church, you’re able to provide the appropriate churchexecutive.com

“Many church leaders assume that e-giving is just for Millennials. But, according to a recent study... 60 percent of all churchgoers — both young and old — prefer to give electronically.”

Evaluate your strategy and optimize your efforts to lead people towards deeper levels of generosity. Download our free resource: www.RSIstewardship.com/NeverAskAgain

“next step” for every person in the pew. This enables you to bridge the gap between Sundays and engage each person in a way that’s relevant to him or her. It also ensures that you’re communicating a cohesive message across every channel, from digital to direct mail, so that people understand the vision, mission and priorities of your campaign. #3: Ensure every person is noticed and every gift is recognized with automated follow-up and real-time notifications for your staff. Every person in the church deserves to be noticed, to have a human touch, and to connect in a meaningful way to a community that can help them grow. But, the reality is that your staff can’t manage all those one-to-one interactions once you reach a certain size. The good news is, technology exists to ensure every person is noticed and every gift is recognized. For example, you can automate a response that thanks a first-time giver. You can also receive real-time alerts based on customized variables, including when donations lapse or when church members make a significant gift. This technology allows you create a basis for an ongoing relationship and ensures no one gets looked over or left behind — all without adding additional work for you or your team. churchexecutive.com

What if you never had to ask again? Technology will never completely solve all the challenges you face when it comes to increasing generosity, but it can make a significant difference with the right tools and strategies in place. It can also alleviate a lot of the pressure to make another announcement from stage asking people to give. Are you ready to take the first step in leveraging technology to increase giving? We’ve created a free resource to help you evaluate your efforts and optimize your ability to lead people towards deeper levels of commitment: RSIstewardship.com/NeverAskAgain. Joel Mikell is president at RSI Stewardship [ www.rsistewardship.com ]. Follow him on Twitter [ @joelmikell ] or find him on Facebook [ www.facebook. com/joel.mikell ]. Derek Hazelet is senior vice president at RSI Stewardship. Find him on Twitter [ @dhazelet ] or LinkedIn [ www.linkedin.com/in/derekhazelet ].

July / August 2016 • CHURCH EXECUTIVE

Using giving data for ministry If you were asked when your church gives, how would you answer? If you’re still relying on passing the plate [ http://echurchgiving.com/ mobile-church-giving-benefits/ ] to make your church’s budget, you know exactly when they give. They give during the Sunday morning, 10-minute offering window. Sure, there’s a small minority of highly organized folks who sit down and write out their check(s) and either bring them to church to drop in the plate or mail them to the church. But for the majority of your church, if they’re giving at all, it’s when they’re being prompted by ushers and offering music. So, what happens when people aren’t really using checks (or the postal service, for that matter) anymore? What if they aren’t in church that week? What if they didn’t bring cash with them to the service? When are those individuals giving? Looking beyond Sunday giving Churches are using technology to see beyond the Sunday morning service. Digital giving solutions [ http://blog.echurchgiving.com/online-

CHURCH EXECUTIVE • July / August 2016

giving-for-churches/ ] enable people to give at times and in ways that are more intuitive to their lifestyle. And isn’t that a good thing? Because we want people to be able to give when the moment strikes them, whether it’s during a small-group discussion on generosity or while watching a Netflix documentary on hunger. Equipping your church with the tools that expand their ability to respond to convictions and prompts to give at the moments they happen is the best thing for them — and for you. When you put the ability to give into their hands through mobile giving, it can make a huge difference. When do people give? Take look at this giving diagram (see below) from echurch. It pulls together all the giving that happens during the week using the Pushpay app, and it paints quite an interesting picture. Giving doesn’t just happen inside the Sunday window; it happens throughout the week during business hours, with 11 a.m. and 2 p.m.–3 p.m. seeing the heaviest giving traffic.

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Stop for a second and really let this sink in: If you look at the rest of the week combined — most people, if given a choice, won’t give on a Sunday. For whatever reason, it makes more sense for them to give during the week. What if you’re wrong to keep accepting the idea that most giving happens on Sunday morning? What if people are just as willing to give when you’re not reminding them? What if you’re actually hurting your budget by making Sunday the center of your giving? When people are taught and encouraged to be generous [http:// go.echurchgiving.com/teach-your-church-give/ ] and then given the tools to make it happen, you’ll start to see a real change. You’ll see people give when they couldn’t be at church because of vacations, illness or other responsibilities. You’ll see people continuing to give, even though they had to move to different cities. You’ll discover people giving because they’ve discovered your ministry online. Pastor Steve Murray from Real Life Church in Covington, WA, uses Pushpay as the church’s giving platform. He has this to say about giving: “Sunday morning is no longer the main place that people give. With Pushpay, people can give wherever they’re at; so, we’re seeing people give while they’re on vacation, people giving on a Sunday when they’re not at church, or people simply giving on their phone before the buckets even get around to them. Our young people are starting to give more and from different places, and it’s really exciting to see.”

Here’s where technology can come into play and really help you see the facts and figures. We’re living in a time when technology has evolved at an amazing rate; the latest version of a computer or smartphone is outdated in a matter of months, not years. In the church, however, we are often behind when it comes to technology. Whether it’s fear of change or an overwhelming number of options to choose from, decisions about technology seem to paralyze church leaders into indecision. Yet, technology can be an extremely beneficial element to your ministry — particularly when it comes to generosity. Did you know that the percentage of people using their smartphones to shop on Amazon cracked the 70-percent mark in December 2015? Facebook sees similar mobile use. In fact, in April 2016, Facebook reported in its earnings report that 79 percent of its advertising revenue came through mobile ads. There are even articles being published on the importance of mobile giving for churches — such as “3 Reasons Why Your Church Needs to Consider Mobile Giving for Offering & Tithes” — citing some very important metrics. At the end of the day, when it comes to trends like this, the numbers don’t lie. The point of sharing these metrics is that the world today regularly interacts via smartphone, and that number is only growing as smartphones become more and more integrated into our daily lives. If your church isn’t taking advantage of this trend, you’re not only missing out on connecting

“Giving doesn’t just happen inside the Sunday window; it happens throughout the week during business hours, with 11 a.m. and 2 p.m.–3 p.m. seeing the heaviest giving traffic.” Percentage of people who give Few church metrics come with so much baggage as those centered around giving. We simply don’t know how far to delve into the generosity (or lack thereof) of our congregations. Often, this uncertainty is borne of a very honest — and well-intentioned — desire not to prejudice ourselves for or against people based upon how much they give. But, it’s a mistake not to measure giving. In 21st-century North America, generosity gives us a bird’s-eye view into the human heart like no other church metric. Johnny Hunt, longtime pastor of First Baptist Church of Woodstock, GA, explains it like this: “You’re never more like Jesus than when you give.” If Jesus is the spiritual-maturity barometer of a discipled Christian, then generosity has to be a critical part of the equation. That’s why you want a giving metric that measures the breadth of giving across your church membership. If your congregation as a whole isn’t giving — or if giving is relegated to a relative few — you can guess you have people who need additional discipleship in the area of generosity. “It’s incredibly valuable to know that we have 40 committed families, and we have 30 committed givers. That tells us we probably have 25 percent of our church [that] has not been discipled in that area or doesn’t have the means [to give],” said Bradon Cox, managing editor of Pastors.com and founding pastor of Grace Hills Church in northwest Arkansas. Depending upon how your church tracks giving, this shouldn’t be tough to figure, either. Whoever manages your accounting can simply isolate all your members’ giving records and count up the number of people who have given in the past month. Divide that number by your church’s total number of givers. churchexecutive.com

more with your community, but you’re also missing out on the valuable metrics that come with it. These metrics can help measure the percentage of members who give, determine how effective and useful your current technology is, and help you make educated decisions about how well your technology serves your ministry. Unbelievable metrics can be accessed when using a mobile solution like echurch custom mobile apps that are powered by Pushpay’s mobile giving platform. If you’re using this technology, giving metrics — such as the percentage of members who give — are a snap to do. You’ll have this number (and more) at your fingertips. You’ll even be able to zero in on specific segments of your membership’s giving patterns. Want to know what percentage of your young families are giving? No problem. Want to know how many of your church’s new members over the past year have become givers? Done. Want to know the percentage of members in leadership positions who gave last month? It’s easy. Whatever the situation, access to data is invaluable — and the ability to have eyes on this information can do amazing things for any ministry. Mobile giving is the most advanced tool to accomplish this. Additionally, it has the ability to unlock generosity from your community while giving you tools to plan for the future. Written by the echurch content team [ http://echurchgiving.com ]. echurch is the principal supplier of Pushpay [ https://pushpay.com ] to churches.

July / August 2016 • CHURCH EXECUTIVE

Church Management Software (ChMS)

Dos and don’ts for engaging church volunteers

Do find out who isn’t yet signed up to be a volunteer. Get a list of active church members who are not assigned to one of the volunteer groups you created in your ChMS. Get to know them; ask what their skills are and what they’re interested in doing for the church.

By Bill Gifford Don’t waste anyone’s time. Volunteering often takes away from other responsibilities, so use volunteers’ time wisely. With everyone’s packed schedules, a donation of time is just as valuable (if not more) than a donation of money. So, communicate clearly when and where volunteers need to be and exactly what they will be doing. Texting is a great tool for communicating last-minute updates, weather cancellations, and reminders. Do use your ChMS to get organized. Create categories and groups so your volunteers are in organized lists. Then, when you need help, you know exactly who to ask.

Don’t guilt people into volunteering. That’s a situation where everybody loses. Do tell stories that are inspiring. Show volunteers how their efforts will make a meaningful and significant contribution. Don’t assume everyone prefers to communicate the same way you do. Some people prefer emails; some prefer text messages. Others aren’t comfortable with technology and prefer phone calls and traditional mail. If you reach out to them via their preferred method, volunteers will be more likely to get your message and respond. Do leverage your time with group communications. [ iconcmo.com/ blog/2013/04/05/group-communication-text-and-email ] Having your volunteers organized into groups will make it easy to communicate to everyone via text message, email, phone lists or traditional mail.

Don’t burn out your volunteers. [ iconcmo.com/blog/2012/10/22/ prevent-volunteer-burnout ] Have your volunteer coordinator touch base regularly to make sure your volunteers aren’t over-committing themselves. Things change over time. Maybe a new mom doesn’t have the extra time and energy to volunteer at VBS this summer. Or, maybe a longtime church member just retired from his job and is looking for new volunteer opportunities. Do recognize which tasks can be done by volunteers and which ought to be done by paid staff. If you have a lot of volunteers, you probably need a fulltime volunteer coordinator on staff to organize everything. Don’t assume people will come to you! Be sure to ask for help in specific, actionable ways. For example, ask, “Can you please hand out bulletins on June 17?” rather than sending an email blast to the entire congregation asking, “Can anyone usher sometime?” Contact people individually — especially for volunteer roles that represent a bigger time commitment, such as treasurer or Sunday school teacher. 18

CHURCH EXECUTIVE • July / August 2016

Don’t forget to thank your volunteers! Let them know they are appreciated and how important they are to the church. As I mentioned before, share stories to let them know how they made a difference. For maximum impact, send a personalized note or make a phone call. Do ask for feedback. Communication needs to go both ways. People like to be able to give feedback on things; it makes them feel more involved and valued. You can even ask them to share their inspiring stories with others. Bill Gifford is the president of Icon Systems in Moorhead, MN. For more than 20 years, Icon Systems has been developing software that will meet the needs of any religious organization — from church plants to denominational offices. [ www.iconcmo.com ] churchexecutive.com

Examining church bylaws By David O. Middlebrook

The purpose of bylaws is to reflect how your church operates, as well as to provide protection and structure. The bylaws contain a detailed framework of operations, and what seems important to the church in this season might not be in the next. So, you need to have a framework that can change. Bylaws contain the church’s internal rules and set forth the guidelines for operation. The bylaws could be described as a “rulebook.”

But, what goes in the bylaws? Generally, bylaws should contain the following: Name and Principal Office: The church’s name is obviously important since it will be used in contracts, intellectual property filings, registrations and business transactions. By filing the name as a corporation, it might also protect the name from being taken by another church. A principal location does not mean that the church cannot be moved or that it cannot establish multiple campuses, but it does at least provide some framework to establish its intended location. Statement of Faith: A Statement of Faith sets a church apart from other corporations by articulating beliefs or teachings with regard to religious matters. Putting the church’s basic beliefs or teachings into the bylaws helps create orthodoxy, reducing the likelihood of future dispute, and serves as a safeguard for the church. Autonomy: If your church is autonomous — that is, not under direct management or authority from a higher corporate organization or another church — it should be made clear in the bylaws. This provision has proven to be important for some churches who believed they were part of a voluntary association but later learn that the association did not consider the church free to disaffiliate from its authority.

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Purposes: Having a section that describes the church’s intentions is important because it helps fulfill IRS expectations. The purpose section needs to firmly establish that the church has been created to engage in religious worship as well as other similar activities. Powers and Restrictions: This is a governmental compliance section used to reaffirm that the church is allowed to do anything allowed under applicable law. We usually insert language expected by the IRS or demonstrates the church understands its requirement to follow certain laws. Membership: It is important for your bylaws to outline the following facts about your members: Does the church have members? If so, how does a person become a member? Who is responsible for verifying membership? Do members get to vote on church business matters? If so, generally describe what those matters are and the process and procedures for voting.

July / August 2016 • CHURCH EXECUTIVE

When can a member be removed as a member, and how? And, if a member has been removed, how can he or she be reinstated? Management: Leadership for daily church affairs needs to be clearly stated. Almost every church must have a Board of Directors or Trustees; however, this group may be called other names such as “Board of Elders” or “Leadership Team.” Officers: The bylaws should address how officers are chosen and removed.

Books and Records: There needs to be requirements on who maintains the church’s books and records. While not required, the language should call upon the church to have an annual financial audit by a CPA. Indemnification: In just about every jurisdiction, the church corporation has the authority to protect its officers and directors from liability claims based upon actions they took on the church’s behalf. We recommend adding an indemnification provision outlining this protection in your bylaws.

Independent Compensation Committee: The IRS expects to see the Independent Compensation Committee as a standing committee charged with reviewing and recommending the compensation for the church’s highest-paid employees.

Alternative Dispute Resolution: It is usually not in the best interests of the church to be involved in lawsuits. To avoid public disputes and reputational harm, we recommend including a faith-based mediation and arbitration alternative provision within the bylaws.

Transactions and Policies: We usually have a section clearly reaffirming the church’s general business practices, in language consistent with IRS guidelines.

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Intel Churchligent Giving Presen ted by: RSI Stewar dship

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How do I change our Bylaws? If your church’s bylaws do not reflect how you operate — or perhaps you have learned they are not sufficient from a state law, federal tax compliance, or good governance perspective — where do you go from here? The first step is to locate the current bylaws. You then must determine the procedures for amendments. You are generally required to follow the procedure articulated in your current documents until they are amended. What about a Constitution? Absent a requirement from a denominational authority requiring a church to maintain a constitution, we generally recommend that churches do not maintain the constitution as a third document. There are two reasons

for this recommendation. First, state law only recognizes and defines the articles of incorporation and the bylaws. Second, the more documents that you have in place, the more likely they will not align. If that happens, members might be confused as to which document is controlling. This confusion can lead to discord and possible legal problems for the church. The materials in this article are provided for informational purposes only and do not constitute legal advice. This article is intended, but not promised or guaranteed to be current, complete or up-to-date and should in no way be taken as an indication of future results. Transmission of the information in this article is not intended to create — and the receipt does not constitute — an attorney-client relationship between sender and receiver.

David O. Middlebrook is a founding shareholder of Anthony & Middlebrook and the Church Law Group [ www.amlawteam.com ] in Grapevine, TX. His clients include high-profile charitable and religious organizations, both domestic and international.

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3/1/16EXECUTIVE 5:36 PM July / August 2016 • CHURCH

Listen up!

The pastor’s mic is a make-or-break audio element By Vincent Gabriel Antonini, CTS When it comes to budget concerns, the pastor’s mic shouldn’t be up for discussion. Providing a premium spoken word experience comes with a price tag. When capturing speech, a great microphone will sound as if there is no microphone at all — only a transparent, accurate reproduction of the speaker. Considering the fact that many church facilities have imperfect acoustics — and some attendees may have hearing issues — it’s imperative that this first step (acquisition) is a premium one. Everything that follows will either degrade or attempt to enhance this signal. Unfortunately, many churches don’t place appropriate emphasis on the pastor’s mic. The first step is understanding how a truly “pastor-friendly” mic looks — and sounds. First: what’s your pastor’s preaching style? The Walker. They’re comfortable using their hands, and they walk around to “get in the zone.” For them, a wireless headset mic is a great fit. Whether they’re at the pulpit or roaming, this mic is closer to the sound source: their mouths. The DPA d:fine headset and all DPA mics — also available in directional and omnidirectional models — easily interface with an array of adaptors for all third-party wireless systems. So, you can use your premium mic with all wireless systems worldwide, with extreme intelligibility at the source. The DPA necklace mic also works well for Photo courtesy of Walkers, because it simply attaches around the Compass Bible Church neck with the same premium capsule the d:fine (Aliso Viejo, CA) headset uses, delivering the same clarity. Finally, a lavalier mic (which clips to the pastor’s lapel) can be a good choice. The Hugger. They prefer to stay at the podium while preaching and use the mic as their center point. Sometimes, they constantly reposition the microphone, which can negatively alter sound and damage the mic over time. For them, I recommend podium mics that are available in many lengths, choosing the correct one will produce consistent sound among multiple users. Uniformity around the mic capsule is also very desirable, as it lets them turn their heads slightly — or look down and up to their PowerPoints — without sounding off-mic. Without this uniformity, intelligibility and sound reinforcement suffer as the The DPA SC4098 podium microphone sound level goes up and down. A highly directional mic, the DPA SC4098 supercardiod mic is well-accustomed to an even, uniform sound while also reducing off-axis sound. This also results in more speech gain-beforefeedback, which everyone can appreciate. 22

CHURCH EXECUTIVE • July / August 2016

The DPA SC4098 podium mic is linear both on- and off-axis, which produces a very natural sound. Why is this important? If there’s an unwanted sound on stage (like a loud A/C unit). No matter where the pastor moves, a premium microphone should not shift frequency as the unwanted sound enters the microphone at different angles. It should sound the same as how our ears perceive sound. An inferior microphone shifts the frequency of the unwanted sound as the pastor moves. Operators usually try to equalize out the unwanted sound — but they’re really changing the desired sound (pastor). This linearity transfers pure, unaltered sound. That’s what you want — especially when multiple mics are added to a production. The Unpredictable Preacher. They use PowerPoint presentations, show a video, or both. One minute, they’re at the pulpit; the next, they’re walking into the congregation! They move a lot — looking back or DPA necklace microphone up at the PowerPoint, sipping their coffee … (Photo courtesy Here again, our SC4098 podium microphone is a of Addisville great fit. I’ve seen pastors walk five or six feet away Reformed Church from the pulpit and still be understood. in Addisville, PA) Another option is a wireless directional headset, or lavalier lapel mic, or both. Yes, maybe this preacher needs two mics. When he’s in the moment, your sound team should be equipped to technically follow the production. The case for “sound” stewardship Microphones come at a variety of price points, but a truly pastor-friendly mic costs a little more: approximately $500 and $800. Here’s why. It performs as advertised. Does the product do what it claims? When you buy a premium product, you’re likely to be happy with its performance on Day One. DPA works quite a bit with film, theatre, broadcast, recording studios and high-end live symphony, Jazz and pop music — and many churches worldwide. We specialize in intelligibility and musicality. You get premium service and support. Day 2 support and educational support is too often overlooked and rapidly disappearing from our industry. Ask what the support structure looks like “after the honeymoon.” With a premium product, you should get positive answers when you ask: What’s the company warranty? Will you back our church if we break a part? If so, how quickly can we get that part? When it arrives, can I get some support on how to install? Natural sound = happy worshipers. With a premium microphone and distribution system, everyone hears natural, pleasant sound. It makes our ears and our brains smile, and our hearts light. Studies show that when sound is properly produced and distributed, we’re happier. When improperly created, you want to leave, and you probably don’t know why — this is called listening fatigue. For worshipers with hearing loss, this is particularly vexing. Think of sound like a rainbow of sound waves. When it reaches you, you’ll see glorious separate colors, if those colors aren’t mixed. If they are mixed — before the sound hits your ear — speech gets muddled. Suddenly, the pastor sounds thin or bass-heavy (not linear) — not like himself / herself. With a truly pastor-friendly mic, pastors should always sound like they do when they’re standing three feet from you: natural. Getting the right mic for the right task requires true stewardship. You really do get what you pay for. Remember: There’s no right way to do the wrong thing. Vincent Gabriel Antonini, CTS, is National Sales Support/Business Development Manager for DPA Microphones in USA [ www.dpamicrophones.com ].

churchexecutive.com

How a non-traditional building approach can avoid traditional construction challenges By Jim Peckham Most church leaders will tell you that making a decision to build a new facility — or to expand their current campus — is among the most difficult challenges they face. Concerns about managing the process, stewardship of funding, and keeping church members happy with the results all contribute to the worry.

Decisions about materials & design Traditionally, churches have been built on long-term material, typically brick or stone. While these durable building materials have advantages, there are also some drawbacks. Beginning with material cost and building cost, these traditional materials can cause costs to exceed budget. Further, if building requirements change in the future, these materials can be difficult to modify or replace. Today, there are some non-traditional options that give the attractive architectural appearance that most congregations expect, but without the cost and limitations of traditional materials. Some of these non-traditional options include metal wall systems, insulated “sandwich” panels and exterior insulation and finishing systems (EIFS). Advantages of these alternative materials include lower material cost and installation cost. Further, as buildings are expanded or repurposed, the non-traditional materials can be matched or replaced for less cost.

Our Lady Queen of Peace Catholic Church (Wichita Falls, TX)

Historically, church building decisions have followed a traditional process when developing building plans and selecting materials. The sense that it’s safer to choose a traditional process has often controlled the thinking of the decision-makers. While often achieving successful results through the traditional approach, today’s technology, material choices and contractor capabilities give options that might reduce building cost and construction time, and provide a more efficient structure for the life of the building. Here are a few suggestions that can help guide the decision process, from the traditional approach to a “non-traditional” approach for your church building — and along the way, create a more efficient process and deliver better results. Consider the design-build approach Traditionally, church facilities have been built with a design-bidbuild approach. This method starts with the selection of an architect who develops plans that are put out for bids. General contractors submit estimated bids, and the job is awarded to the best-qualified bidder. Unfortunately, the qualification process begins and ends with whoever has the lowest price. Too often, the lowest cost has risk because, to provide the low bid, compromises are made on material and labor. To avoid problems, the architect and the building committee must monitor the construction process. Today, many churches are opting to use a design-build approach wherein a building committee interviews viable contractors to identify contractors who best fit their building project. Evaluation criteria include experience on similar jobs, proposed budget, and reputation with past customers. While lowest cost is still important to the selection, the designbuild process includes more criteria and allows the church to select the contractor which best fits the church’s building plans. Other advantages of the design-build approach include the connection between all members of the building team, including building committee members, the architect, subcontractor and the general contractor. churchexecutive.com

Completed last April, Our Lady Queen of Peace added a 20,000-square-foot parish hall using a non-traditional building approach from Varco Pruden. Leaders prioritized aesthetic consistency with the existing facility.

Decisions about immediate & future needs Often, when a church plans a new structure, there is a challenge of balancing current needs versus future needs. Budgets usually control how the building will be designed and the amount of space that can be built. Traditionally, the approach was to build “all the building that the church can afford.” Hopefully, as the congregation grew, the facility could be adapted. This approach has drawbacks, both on the front end in obtaining financing and, as the church evolves, having appropriate space available for the various needs of the congregation. Taking a non-traditional approach can give building planners some flexibility with both the initial building planning and implementing a phased growth strategy as the need evolves. Combining a design-build approach with the use of building systems provides options to plan for the long-term needs while building only the space that is currently required. This approach helps stewardship of funding and allows expansion to be planned to occur when the space is needed. Jim Peckham is Manager of Marketing for Memphis-based Varco Pruden Buildings [ www.vp.com ], a division of BlueScope Buildings North America, Inc. Varco Pruden markets its products through a network of more than 1,000 authorized builders within the United States and Canada. July / August 2016 • CHURCH EXECUTIVE

SOUND SYSTEMS

What’s behind the

curtain? A

By Daniel Keller

At New Venture Christian Fellowship in Oceanside, CA, visual impact is standard — and transparent. 24

CHURCH EXECUTIVE • July / August 2016

t times, the 1,800-seat sanctuary has been transformed into a day at the beach, complete with a “white sand” carpet (courtesy of expertly applied LED house lighting) and the Pacific Ocean roaring in the distance (thanks to some pretty advanced projection technology and know-how from the tech team). The ocean “roars” around you … largely because just the right audio elements are in place. But, it wasn’t always such an immersive experience. Rick Boring — Senior Systems Consultant for Olympia, WA-based CCI Solutions (the firm which oversaw the extensive audio/video/lighting renovation of church’s 1,800-seat sanctuary in 2013) — recalls a different time. Much of the circa-1994 audio, video and lighting equipment had reached the end of its useful life. Projectors died, mid-service. Lights went out unexpectedly. So, when Boring and his team were enlisted, they focused on helping church leaders deliver a more stimulating, high-tech, contemporary worship experience — with systems far more complex than a more traditional house of worship — as well as the selection of audio, video and lighting components that would stand the test of time. And, to ensure things ran smoothly, Boring and his team prioritized seamless connectivity between these systems. For example, the seamless networked audio elements (including speakers) could not interfere with the sanctuary’s new video screens and theatrical lighting. This objective didn’t allow sufficient height to hang a line array speaker setup. In other words, the speakers could not be assembled in a straight vertical line and angled — either physically or via beam-steering — so that each box covers a section of successive rows. churchexecutive.com

“No matter where we tried to hide a line array, we [would] be blocking sightlines to the screen for somebody,” Boring explains. Instead, he and his team installed four Renkus-Heinz ST9-94R three-way self-powered speakers, with built-in amplifiers to facilitate fewer wires, less heat and better sound. He and his team arranged the speakers in an “exploded cluster” — a very widely arrayed horizontal array — and added five delayed ST7M-94R mid/high self-powered speakers. These were placed further back in the audience, and time-delayed to match the sound of the main speakers. “With [these] speakers, when you’re in the pattern, it’s very consistent,” Boring explains. “The pattern drop-off is very accurate, and we’re only putting sound where it’s needed.” To put this in perspective, consider light as an analogy. The coverage pattern of these speakers is very tightly focused and defined — step outside the “spotlight,” and you hear almost nothing. Why this is important? Because keeping sound focused on the audience — and preventing it from hitting (and reflecting off of) walls, windows and other hard surfaces — reduces reverberation, the enemy of intelligibility. The subwoofers posed another challenge. Boring didn’t want to ground stack the subs on each side of the stage, which would result in excessive low frequency buildup for the performers onstage — a very uncomfortable environment at best. Instead, Boring opted for a cardioid sub array, with four DR18-2R 115V self-powered dual 18-inch subs hanging over the stage firing toward the congregation, and another two dual 18-inch subs firing backward toward churchexecutive.com

the stage. This subcardioid configuration creates a “null” zone, reducing bass buildup onstage while providing more than enough low end for the congregation. “It created a great pattern with rejection on the stage and super-consistent low-end across the congregation,” he points out. Focusing on the message, not the methods The worship style at New Venture Christian Fellowship is visually oriented, to put it mildly. Pastor Shawn Mitchell uses lots of sermon illustrations and visual aids — even some living, breathing ones! — to help the message come alive on Sunday. When the visual worship experience is this important, transparency — and discretion — surrounding the technology driving that experience is critical. This, in effect, was Boring’s mantra when overhauling the space’s audio, video and lighting systems. When Boring discussed this same project with Sound & Communications Magazine in 2013, he explained it like this: “When we do installations, I want the improved sound, video and lighting to help people enter into great worship, but don’t want them to necessarily concisely attribute the difference to an improved sound and video system. I want it to be transparent. “This is how technology in a house of worship should be: largely transparent,” he added. “People will notice the end effects of the technology, but not how the effects were achieved.” Daniel Keller is CEO of Get It In Writing, Inc.® [ www.getitinwriting.net ]. July / August 2016 • CHURCH EXECUTIVE

Sliced Turkey Breast

The stewardship of savings How to save money for your ministry on the products churches buy most

Original Product Bought Wholesale

Similar Product On entegra’s Program

Domino (Sysco Classics) 25 LB Granulated Sugar

Domino 25 LB Granulated Sugar

SAVINGS

9.6%

Jennie-O Turkey Store Extra Lean Sliced Turkey Breast

35.5%

Original Product Bought Wholesale

Similar Product On entegra’s Program

Non-entegra vendor Chocolate Chip Cookie Dough

Otis Spunkmeyer Chocolate Chip Cookie Dough

Tater Tots

Original Product Bought Wholesale

Similar Product On entegra’s Program

Non-entegra vendor LiquidEgg Blend

Michael’s Food’s Scramble Egg Breakfast Blend

SAVINGS CHURCH EXECUTIVE • July / August 2016

45%

33%

Original Product Bought Wholesale

Similar Product On entegra’s Program

Non-entegra vendor Potato Tater Barrels

Oreida Potato Tater Tots

SAVINGS

Pineapple

Similar Product On entegra’s Program

Non-entegra vendor Classic Pineapple Chunks in Juice

Dole Pineapple Chunks in Juice

SAVINGS

Apple Juice

19.3%

Original Product Bought Wholesale

Similar Product On entegra’s Program

Non-entegra vendor 4-oz. Apple Juice Cup

Suncup (entegra’s contracted partner) 4-oz. 100% Apple Juice Cup

SAVINGS

Bacon

21%

Original Product Bought Wholesale

20.4%

Original Product Bought Wholesale

Similar Product On entegra’s Program

Non-entegra vendor Sliced Layflat Bacon

Farmland Center Sliced Layflat Bacon

SAVINGS

Liquid Eggs

Non-entegra vendor Sliced Roasted Turkey Breast

SAVINGS

Sample market basket Here are the top products bought by church ministries for camps, church facilities, schools and healthcare environments:

Sugar

Similar Product On entegra’s Program

SAVINGS

By Glen Witsaman

For a faith-based organization, a procurement services company provides a system for buying products and services that will reduce costs. Through their association with large, multi-facility clients — as well as with hundreds of manufacturer and distribution partners — these companies can provide value to smaller clients by sharing the discounts brought by the volume. Lower costs can be seen from the moment you sign on. Even better, you might not even need to change the products you buy to realize the savings. While prices vary from region to region, the discount opportunities on everyday products can be vast. On this page are some comparisons of items bought by entegra’s faith-based clients before becoming our program participants and the percentage cost savings* for comparable on-program products. Often, the savings can be seen on the exact same products, from the exact same manufacturer, as in the case with Domino Granulated Sugar (see below).

Original Product Bought Wholesale

15%

*Specific prices vary depending on the facility’s location, where state taxes and shipping play a role.

Glen Witsaman is National Director of Business Development, Leisure & FaithBased segments at entegra Procurement Services, a non-fee-based purchasing company that provides customized procurement and distribution services for food and related supplies to many industries, including hospitals, schools, restaurants and church groups in the United States and Canada. churchexecutive.com

#3: Coaching gives us permission. Many times, as leaders, we have a sense deep down of what the issues are. We have a sense of what God wants us to do. We just need to hear someone else say we’re not crazy for thinking what we’re thinking! We need courage to move forward. I call that giving leaders permission. #4: Coaching talks us off the ledge. There have been many days when I have called a coach because I thought the sky was about to fall. Things were not good. Things were about to crumble. The “stuff” was hitting the fan. My mind was stuck on the worst-case scenario. However, a few minutes with a trusted coach or mentor helped me step off the ledge. A coach can (and will) do the same for you.

By Shawn Lovejoy

REASONS WHY

every leader needs a coach

#5: Coaching inspires us. Not one time in a coaching conversation did I ever come away discouraged. I went into almost every coaching conversation that way — but, that was never how I left the conversation. I can honestly say that I have been most inspired to think and dream bigger, and to pursue the vision God has placed on my heart on the heels of coaching conversations. Coaching has that kind of power! Good coaches inspire their players. #6: Coaching offers outside perspective. We all have blind spots. We all have a certain lens through which we see the world and the organizations we lead. We all have certain ways of thinking. The challenges in front of us often become like forgotten cracks in a mirror; we don’t see them after a certain period of time. Coaching addresses all of that with a new, fresh perspective! #7: Coaching challenges us. Iron sharpens iron. Do you know how? Heat and friction! We need both. We need to be pushed. We need to be held accountable. We need to execute. We need to read. We need to learn. We need to get and stay healthy. Coaches are like personal trainers. They challenge us to make us better! #8: Coaching grows the leadership capacity of myself and the organization I lead. I doubt I’ve had very many original clever thoughts; most of what I know, I learned from someone else! When I spend time with someone who’s been further down the road than I am now, it raises the lid of my leadership — and, therefore, the lid on my organization.

“I just don’t have the time or money for coaching right now.” I hear it all the time. However, my follow-up questions are always the same: When will it slow down long enough? and What will it cost you if you don’t have a coach? The bottom line is this: I just believe every leader needs a coach! And there are 10 reasons behind this belief. #1: Coaching is Biblical. God reminds us over again in Scripture about the importance of seeking counsel and getting advice from wise people around us. Proverbs 19:20 is a great example: “Get all the advice and instruction you can, so you will be wise the rest of your life.” Proverbs 20:18 says, “Plans succeed through good counsel; don’t go to war without wise advice.” #2: Coaching protects us. I’m proud of the fact that in 20 years of vocational ministry, I never had a train wreck. The ministries I led never went off the rails. Because I’m so smart? No. Because I stayed in relationship with Godly, wise coaches in my life. It helped keep me sane, centered, married and protected! I sought counsel before every major decision, so it made my decisions better. churchexecutive.com

#9: Coaching confronts isolation and loneliness. Sure, we can attend conferences and download content — but where can we sit down and talk through whatever’s keeping me up at night? What we need more than anything else is relationship. We need a friend who knows us well enough to speak the truth in love and challenge us regarding the nature and health of our relationships! #10: Coaching gives us an advantage. Learning, growing leaders win. Period! Isolated leaders? They stop learning and stop growing. Sooner or later, the organizations they lead do the same. Don’t allow that to be you. The wisest man who ever lived, inspired by the Holy Spirit, once said: “Walk with the wise, and you will become wise” (Proverbs 13:20). That, my friend, is good advice. So, go. Get a coach. Get the advantage! Shawn Lovejoy is founder & CEO of CourageToLead.com, where he and his team coach leaders, pastors pastors, and helps them all conquer what keeps them up at night. Previously, Lovejoy served as founding and lead pastor of Mountain Lake Church in Cumming, GA, and directional leader of churchplanters.com and the annual Velocity Conference. He has written several books, including The Measure of Our Success: An Impassioned Plea to Pastors (Baker Books, 2012) and Be Mean About the Vision: Preserving and Protecting What Matters (Thomas Nelson, 2016).

July / August 2016 • CHURCH EXECUTIVE

Protecting your church’s right to religious expression By Frank Sommerville, JD, CPA

Since the beginning of the United States, marriage has always been subject to detailed rules. Religious organizations treated weddings as a religious ceremony, defining marriage rules by their theology. Since the state government cannot force every citizen to participate in a religious wedding ceremony presided over by a religious official, states created alternative wedding rules that were religiously neutral. The states allowed wedding ceremonies to the presided over by a civil official, usually a judge or justice of the peace. Weddings also create marriages. The states created rules for making and dissolving marriages. These rules are also independent from any religiously based rules for making and dissolving marriages. Since marriage was a fundamental building block for society, federal, state and local governments created incentives for its citizens to marry and rules governing its dissolution. The two wedding and marriage systems (religious and state) coexisted for the first 200 years the United States existed. The systems were compatible because the state recognized that the religious rules did not apply to them and the religious community agreed to comply with the state rules that did not conflict with their sincerely held religious beliefs. The systems began diverging in 1966 when California adopted the first nofault divorce. The state would no longer follow the religious community rules for divorce. While some religious communities refused to recognize divorces based on the no-fault rules, most religious communities accepted divorces granted by the state. The next major divergence of the two systems occurred June 2015. The United States Supreme Court determined that states could no longer define marriage as one man and one woman because it deprived certain 28

CHURCH EXECUTIVE • July / August 2016

individuals of the incentives created to reward married individuals. The old system violated the equal protection clause in the United States Constitution because it deprived individuals of the marriage incentives unless the marriage was a heterosexual marriage. The Supreme Court decision requires all government agencies to recognize same-sex marriages on the same basis as it has recognized heterosexual marriages. The result is that participants in same-sex marriages must receive the same treatment and benefits as a heterosexual marriage when it comes to the government. The United States Supreme Court decision did not address the religious aspects of weddings and marriages. The Court left those issues to another day. What it means for churches Some churches have incorrectly interpreted the Supreme Court decision as requiring the church to treat same-sex weddings and marriages the same as it treats heterosexual weddings and marriages. While some churches have embraced the Supreme Court decision — and have altered their policies and procedures to authorize samesex marriage — many churches have sought guidance on how to best protect themselves from the government imposing same-sex weddings and marriages upon them. The church might also have exposure in two areas: facilities use and employment. Facilities use. Many churches strive to be center of the community’s activities. They take pride that they host a wide variety of groups in their facilities. In some communities, the church has the largest gathering space in the entire community. In many instances, the local government or school district is a frequent user of church facilities. This philosophy might create issues for the church. If the church rents its facilities to a government entity, the church churchexecutive.com

cannot have any say in how the government entity uses the church’s facilities. For example, if the church agreed to rent its facilities to the county, and the county uses the facilities for the justice of the peace office, the church cannot object when that justice of the peace performs a samesex wedding in the leased facilities. Some states and local governments have passed a law that prevents unlawful discrimination by facilities that are open to the public. Some of these laws include sexual orientation, sexual perception and gender identity as classes of individuals protected from discrimination. These statutes are used against Christian business owners who refuse their services to same-sex weddings. While many of these public accommodation laws provide an exemption for churches, the issue is whether the extensive public use of the facilities has converted the church facilities into public use facilities covered by these statutes. In some states, the state has made the property tax exemption contingent upon the church being the exclusive user of the facilities. If the church allows nonmembers to use the church for a wedding, then the church could lose its property tax exemption. Employment. Subsequent to the Supreme Court decision, the Equal Employment Opportunity Commission (“EEOC”) announced that it considered discrimination on the basis of sexual orientation, sexual perception, gender identity and same-sex marriage to be unlawful under Title VII (nondiscrimination in employment). The EEOC believes that gender discrimination includes sexual orientation, gender identity and sexual perception. It also believes that marital status discrimination includes same-sex marriages. It has begun to litigate cases addressing this issue. Most churches are subject to Title VII, except churches may discriminate on the basis of religion. Further, ministerial employees are not subject to any of the federal employment laws. For non-ministerial employees, nothing in Title VII allows the church to discriminate on the basis of sexual orientation, sexual perception, gender identity or same-sex marriage in its employment practices. The church may not ask an applicant about his or her sexual orientation, gender identity or marital status. Defensive steps for churches • Establish the church’s position through a statement of faith that addresses sexual orientation, sexual perception and same-sex marriage. • The statement of faith should become part of the church’s governing documents. The statement of faith should typically be included in the bylaws. • Establish that the church consistently adheres to its statement of faith. This means that the church does not place in leadership individuals who have a homosexual orientation, transgender individuals, and parties to same-sex marriages. • Establish that the church consistently refuses to allow its facilities to be used for any purposes that violate statement of faith. • Establish that the church consistently refuses to allow its ministers to participate in or conduct wedding ceremonies that violate statement of faith. • Adopt a written facilities use policy and require all nongovernmental users to agree with the statement of faith and will not use the facilities in any manner that violates the statement of faith. The policy should also limit the number and frequency of outside users. • Require all job applicants to agree with the statement of faith before they can submit an application. • Require all non-ministerial employees to a re-affirm their agreement with the statement of faith annually.

Statement on Marriage and Sexuality (for Bylaws and Statement of Faith) We believe that God has ordained marriage and defined it as the covenant relationship between a man and a woman, and therefore we will only recognize marriage is between one biological man and one biological woman. Genesis 1:27-28, Genesis 2:18-24, Matthew 19:4-9, Mark 10:5-9, Ephesians 5:31-33. We believe that all sexual acts outside marriage are prohibited as sinful. Consequently, we condemn all sexual acts outside marriage as sinful — including but not limited to adultery, fornication, incest, zoophilia, pornography, prostitution, masturbation, voyeurism, pedophilia, exhibitionism, sodomy, polygamy, polyamory, sologamy, or same-sex sexual acts. Exodus 20:14, Leviticus 18:7-23, Leviticus 20:1021, Deuteronomy 5:18, Matthew 15:19, Matthew 5:27-28, Matthew 15:19, Romans 1:26-27, 1 Corinthians 6:9-13, 1 Thessalonians 4:3, Hebrews 13:4, Galatians 5:19, Ephesians 4:17-19, Colossians 3:5. Marriage Policy Addition Since God has ordained marriage, and we believe it is a covenant relationship with a man and a woman, we will only recognize marriages that are between one biological man and one biological woman. The ministers and staff of our church shall only participate in weddings and solemnize marriages between one man and one woman, and the facilities of property of the church shall only host weddings between one man and one woman.

Want to learn more? Watch the highly informative “Protecting Your Church’s Right to Religious Expression” webinar — presented by GuideOne Insurance, Church Executive Magazine and Frank Sommerville, JDA, CPA — at churchexecutive.com/churchexecutive-tv

Sample Member Covenant By signing the church membership covenant, I am signifying that I agree with the Statement of Faith, including the Statement on Marriage and Sexuality. Employment Application Addition By submitting this application, I am representing to the Church that I agree with the church’s Statement of Faith and Statement on Marriage and Sexuality. I am also representing to the Church that my lifestyle on a 24 -hour and seven-day-week basis will be consistent with both those statements. If at any time my lifestyle fails to live up to those requirements, I understand that I can be disciplined, including termination of employment. Addition to Code of Conduct for Employees As an employee of the Church, I acknowledge that the church bases its teachings and guidelines for living and working on the Bible. The church expects each employee’s conduct will be in line with the moral spiritual and ethical teachings of the church as well as its Statement of Faith and Statement on Marriage and Sexuality on a 24-hour and 7-day basis. If the employee’s conduct is inconsistent with the standards, the church may discipline the employee in any way, up to and including termination of employment. Frank Sommerville, JD, CPA, is a shareholder in the law firm of Weycer, Kaplan, Pulaski & Zuber, P.C. in Houston and Dallas. He is a nonprofit attorney and CPA who regularly assists churches in preventing litigation. [ www.wkpz.com ]

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July / August 2016 • CHURCH EXECUTIVE

A point-by-point guide to comparing loan offers By Darren Thompson & Richard Koon Church leaders are often surprised to hear that the terms and conditions of a church loan are significantly different than residential mortgages. Since churches are organizations, the loans they obtain are considered commercial loans. Commercial loans are structured differently and have different requirements than a homeowner might get for his or her personal residence. Before your church obtains a loan for a new building purchase or construction project, it’s important to understand the differences — in other words, how to compare the different loan offers which lenders present. Term: Would you be surprised to find out that commercial loans do not have a 30-year term with a fixed rate for the entire length of the loan? Commercial loans have a shorter term of three, five or 10 years. Since payments are amortized over a longer period, the mismatch between the term and the amortization schedule means the loan will not be fully repaid at the end of the initial term. This creates a balloon payment, where the church will either pay off the remaining loan amount or refinance the amount for a new term. As such, you should discuss what will happen if the economy weakens or if your church is going through a transition. Will there be additional fees? It’s important to understand what is expected of your church at the end of the initial term, as well as what to expect from your lender. Fees: We’ve all heard the radio or television ads promoting a mortgage at “no cost, no fees.” Unfortunately, commercial church loans are not free, and you should carefully evaluate the costs that lenders charge to originate a loan. Depending on the size of your loan request, your church could pay several thousand dollars in origination fees, appraisal costs, loan costs, document fees and other related costs. The good news is that fees can vary from lender to lender. So, it’s important to shop around and get the best deal for your church. Rate: Residential mortgages come with a long-term fixed interest rate of 30 years, in most cases. Commercial church loans could see a fixed rate of several years, but it will likely adjust or reset at some point during the term of the loan. As you evaluate loan offers, it’s important to know how the rate will reset (normally a spread to an index such as Prime or Treasury rates), and how often / if it can adjust up and down if rates were to go lower. Many lenders are becoming wary of rising interest rates, but some will still consider adding an interest rate cap to limit the amount of the rate adjustment for the church. Relationship: With rates at historic lows, we see more lenders entering the church market. Church lending is a specialized field; if you choose to 30

CHURCH EXECUTIVE • July / August 2016

partner with a lender without enough experience, you could be in for a bumpy road. Make sure your lender has a long history in serving churches and is committed to churches in good times and bad. Many times, you can see a lender’s commitment by the staff it hires and the depth of expertise displayed in its church lending operations. Working with experienced church lenders might provide compassionate and valuable counsel during a transition, a downturn, a building campaign, or countless other issues that can affect a ministry. Unlike a residential mortgage, your church will be closely engaged with the lender for many years to come. At a minimum, you will be expected to provide annual financial statements, proof of insurance and updates on leadership changes. The church should consider who they like doing business with and if the church’s mission is consistent with the lender’s mission. Many churches prefer to partner with a local lender because that lender is involved in the community, much like the ministry. It’s important to choose a lender which understands your ministry and proves to be a partner through every season of the church’s life. As a matter of stewardship, your church is obligated to seek the best possible terms and rates and to negotiate the lowest fees. However, when you evaluate loan offers, it’s important to consider the value provided by the lender relationship — the expertise, the affinity, and the long-term relationship that’s created when a loan funds. Ultimately, your church should select a lender that offers competitive terms, rates and fees, but also one that provides peace of mind over the long term through expert staff and a commitment to providing banking and financing solutions that will help your ministry reach its goals. Darren Thompson is Vice President of Credit Services for America’s Christian Credit Union in Glendora, CA [ www.americaschristiancu.com ]. Richard Koon is Vice President of Ministry Lending for America’s Christian Credit Union in Glendora, CA.

churchexecutive.com

Streaming Made Simple

Next-level livestreaming: within reach By Andrew Ng

Right now, a large denomination is mobilizing more than 3,000 live streaming units — one for every one of its churches across America. They’re sharing content on their individual churches’ webpages and at local church events … but that’s not nearly where it ends. All 3,000 churches are also streaming content to a single, nationwide “hub.” It’s then delivered to an app available on streaming devices such as Apple TV and Roku. Essentially, this denomination has created a traditional broadcast channel, but at a technologically advanced, but efficient, level. It’s perhaps the most sophisticated streaming setup our company has ever seen in a church environment. But, don’t worry: what we’ve described above is far from the norm. Plenty of churches — maybe yours among them — are doing a great job with their live broadcast; they just want to “take things up a notch.” Sound familiar? Say no more! The first step towards advanced-level live streaming is to know what it looks like. To get started, let’s talk about the common characteristics. Production quality. It’s something viewers of advanced-level streamed content expect; not quite TV-quality production, but with some of those elements. This means multiple cameras and nicely placed images — maybe one camera delivering a wide shot, another capturing a close-up, and another providing a detail shot of the choir. This usually requires a switcher or some kind of video mixer. Organization and consistency are also key in advanced streaming setups. Content is prepared and planned. (And it’s painfully evident to viewers when it’s not both these things.) Really good audio. Audio is a huge deal in broadcasting and streaming, in general. When audio is good, the audience won’t notice anything in the background. Clean audio is good audio. Effective scheduling and communication. It’s really important that viewers know when the next stream is scheduled. At what time? What might it cover? Widely accessible content. Many churches stream to one central location — often an online campus or a Facebook Live group or page. In more advanced setups, the broadcast might be streamed to various places, from the cry room to a church plant across the country. Video-on-demand. Where does content “go” after the live stream? It’s a question the most advanced-level streaming churches ask themselves. Many maintain video archives where viewers can look up past services and events. While this can be accomplished using YouTube or other hosting platforms, these above-and-beyond churches often have their own unique workflows. churchexecutive.com

All this sounds within reach for a forward-thinking, outreach-oriented church, right? So, let’s talk about what needs to be in your “toolkit” for stepping up your church’s streaming game. Truly advanced streaming requires … A champion. In many churches with advanced-level streaming setups, at least one individual “owns” the process. By this, I mean he or she is aware of the different technologies available, vets them, and specs them. Usually, this person has an interest in and knowledge of “what’s next” in technology. What do we need to update first? Do we need to upgrade our switcher, or do we need to update our audio board? What tools will get us that next level of streaming? A realistic budget. In most churches, budget is a key consideration for live streaming. They might want to “step it up,” but they can only afford to do so incrementally. In other churches — where a healthy fund is set aside for upgrades — the question isn’t so much, Where do we start? Rather, it’s: How, exactly, should we spend those funds? Here again, the importance of a live streaming champion in the church is evident. He or she can not only determine which new technologies to invest in, but also what equipment fits in the budget — and fits for the desired production outcome. (After all, what’s appropriate for one church might not be appropriate for every church.) Solid supplier support and communication — before and after a purchase. Part of getting to the advanced level of streaming is enlisting professional expertise when necessary. You want to purchase technology from a company that will back you. They should provide support and constant communication so, when you’re ready to take the next step, you’re not left with a device you don’t completely know how to use … and can’t ask anybody about. In our own company’s case, the ability to offer this level of support is the reason all our operations are centralized in Irvine, Calif. We manufacture, support — do everything, really — from one location so we can maintain a high level of customer service. It comes down to a very human level; you can approach us on Facebook, send us an email, give us a call, or hop onto the website and chat with us. We believe this accessibility is really important. It’s a consultative approach. Andrew Ng is Director of Marketing at Teradek in Irvine, CA. [ www.teradek.com ]

July / August 2016 • CHURCH EXECUTIVE

NEVER AGAIN: BEYOND INSURANCE

Don’t risk a lot for a little! By Michael J. Bemi

Together in our journey to move “beyond insurance,” we have thus far examined the first two steps in that process: risk identification, analysis and evaluation, as well as risk avoidance. Now, we undertake the next step in our journey: risk retention.

In this series, we most recently discussed reasons to avoid ministerial undertakings that present too great a risk — those which, if performed, have a significant potential to cause great damage to our church finances, operations, physical and human assets, and reputation. Pursuing such as these is not good stewardship. Nevertheless, as Christians, we are called to minister to the needs of a hurting world. As such, we are compelled to undertake certain ministries and to assume the risk entailed with those ministries. The questions then become: How much risk should we assume? and How do we assume it? First, note that risk can be assumed via a deductible or a self-insured retention (SIR). They reflect important differences. A deductible is an amount of any loss which is retained by the insured, but with the investigation and resolution of the loss remaining the responsibility of the insurer — at the insurer’s expense. The insured receives a premium credit, the size of which is related to the amount of the deductible. By contrast, when the insured chooses to use an SIR, the insured — at its own expense — becomes responsible for investigating and resolving claims. This assumption of the administrative costs of claims management constitutes one of the elements of the Total Cost of Risk (TCOR) under an SIR. The complete set of TCOR elements includes: the amount of loss retained by the insured, plus the administrative costs of 32

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claims management and risk control (to prevent or mitigate losses within the SIR) provided by the insured, plus the cost of insurance coverage limits provided above the SIR. [Additionally, note that modern risk management would include losses that simply are not insurable, but we will ignore that concept for our purposes here.] How much should you retain? Let’s consider an example. Light of Faith Christian Church (a fictitious name) is a highly successful, three-year-old, independent congregation with a beloved young pastor who’s very well known for his preaching, and a congregation that is quite wealthy. The church premises are brand-new, modern, and incorporate all the latest protective safeguard elements. The staff is large, well-educated and highly trained. With all these circumstances in mind — and with the knowledge that the church’s total annual insured losses each year have averaged $26,000 — the church council decides to renew its fourth-year insurance program with a $50,000 deductible per claim / loss. The church’s insurer allowed the church a $100,000 premium reduction overall on the program, in recognition of the church’s $50,000 deductible assumption. How did this work out for Light of Faith Christian Church? The church’s losses in the first year of this program included: 1) Its “normal” $26,000 experience 2) A 200-year (i.e., expected to occur once in every 200 years) flood loss totaling $98,000 3) A kitchen fire that resulted in $62,000 of repairs 4) An assistant pastor’s auto accident with another vehicle — for which the church was liable — leading to a total bodily injury and physical damage loss of $95,000. Calculating for the church’s agreed $50,000 deductible, in that program year, it assumed a grand total of $176,000 of losses, plus the insurance premiums it paid for its coverage above the deductible. In return, it received a $100,000 premium discount. Clearly, this was not very good stewardship. How can you derive the benefits of retention (reduced premiums, improved claims management and risk control, enhanced cash flow, and greater program control) while avoiding Light of Faith’s experience? First, have your loss expectancy professionally calculated — preferably by an actuary. Next, negotiate an aggregate cap (or limit) on your deductible / SIR. Then, always remember to account for TCOR — and never risk a lot for a little! Michael J. Bemi is president & CEO of The National Catholic Risk Retention Group, Inc. (Lisle, IL) — a recognized leader in risk management. To learn more about available coverage — and to get valuable tools, facts and statistics — visit www.tncrrg.org. churchexecutive.com

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