This is now the sixth post in this series on setting up or fine tuning a church foundation. I think the main point in this section is how do we protect ourselves from being sued. Incorporating the church foundation is probably the first step, but here are two other things to consider:
- Are you prepared for the worst? It is the duty of the church foundation to protect the directors and officers that serve it in the case of a lawsuit…assuming they are serving faithfully. If you’re stealing money or selling dope to raise money for the foundation, you’re on your own. The church foundation should either have a separate policy or see if the church’s insurance will cover them for Directors & Officers coverage as well as coverage to protect against theft or mismanagement. By the way, I highly recommend Brotherhood Mutual for any church or ministry.
- Are you preventing the worst? Even if your church foundation is insured, that does not give the directors and officers license to be reckless or negligent. The foundation needs policies and procedures and an audit. When in place, not only will you protect the assets, but you will also build trust in the foundation. When donors trust the foundation, they will be more likely to generously support it as well.
Useful Links
- Template Articles of Incorp/Bylaws: https://www.dropbox.com/s/7juc9xawz20p5h9/Foundation_Articles_of_Inc.docx?dl=0
- Financial Policies Template 1: https://www.dakotasumc.org/media/files/CONFERENCE/5_Conf_Finance_Benefits/Finance/finance_policies_v1.docx
- Financial Policies Template 2: https://www.dakotasumc.org/media/files/CONFERENCE/5_Conf_Finance_Benefits/Finance/finance_policies_v2.docx
- Brotherhood Mutual (Dakotas): https://www.americanchurchgroup-dakotas.com/who-we-are/agents/
- Dakotas Methodist Foundation: http://dakotasumf.org/
- Minnesota Methodist Foundation: https://www.mnumf.org/
JCT Accounting Co 