CARES Act: Church paying Pastor’s Student Loans

During the first three months of the COVID crisis, the big concern was if churches were going to have enough money to keep operating…to pay their pastor, utilities, and mortgages. As time goes on, many churches are finding out that their finances are doing great all things considered. Now that they are able to catch their breath, they may want to thank their pastor with more than words or a card, or even a hot dish.

The CARES Act allows you to make payments toward your employees’ student loans (including your pastor’s) with tax-free money! I love the phrase “tax free.” This is only available during 2020. You still have to jump through some hoops, but it’s not too bad. The video will explain it.


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Budgeting: Does your Budget tell the Story of your Church?

As an accountant, I love a line item budget. It speaks to me as clearly as a short story, but I’m in the minority. The vast majority of people need to hear the story in order to understand the budget. They don’t need more numbers. How do you transform your budget into a meaningful story about how your church is and is planning to impact this world? That’s what I walk you through in this video.

A narrative budget is a lot of work. Is it worth it? If a narrative budget helps you align your budget to your mission and helps your congregants see how their giving is making a difference, what is that worth? That’s like hiring a leadership consultant mixed with a capital campaign consultant which would normally costs thousands.


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Budgeting: What about Designated Gifts?

Sometimes church are criticized for having so much of their budget go for personnel, buildings, and administration. Sometimes church leaders (and especially the pastor) feel guilty about this too. On average, about 80% of a church’s budget goes towards these things. Church budgets rarely include estimates for designated giving although churches plan on and depend on designated gifts for youth activities and to support missionaries and to feed the hungry. Why not include designated gifts in the budget? It’ll make your church’s budget look better and may more accurately show your ministry strategy.


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A Deep Dive into Endowments and Legacy Giving

Endowments are one of the best gifts you can give to a church yet they are largely misunderstood. Sheri Meister and I go over the details on how exactly endowments work and why they are such awesome gifts.

In the Dakotas, the simplest way to think of an endowment is to imagine someone gifted you some farmland. The farmland holds its value while still generating income from the church. That is how an endowment works…except without having the pain of being a landlord.


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Budgeting: Building or Using the Reserves

Like individuals and families, the church also needs an emergency fund. Assuming that the Holy Spirit hasn’t told you specifically otherwise, not having an emergency fund doesn’t show your reliance on God. It shows your lack of respect for the work of God. Emergencies happen…COVID-19, flooding, fires, and tragedies happen. Do you care enough about Jesus Christ to prepare for the emergencies so ministry doesn’t have to go on hold while you scramble to respond? I walk through how to actually build an emergency fund.

The other danger is for these emergency funds to take on a life of their own. A lot of church trustees have a savings account or checking account that acts as an emergency fund. I’ve heard plenty of stories where the trustees abuse their control of these funds to try to control the mission of the church. That’s an issue that can be solved as well by getting clarity on the purpose and use of those funds. Sheri Meister of the Dakotas United Methodist Foundation addresses this in a recent webinar.


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Budgeting: Expecting the Unexpected

For those of you that are Dave Ramsey students, you probably appreciate the value of an Emergency Fund. This is useful when the car breaks down or you lose your job or if the furnace dies…in January. But what about those smaller emergencies that you haven’t planned for? When you have unexpected company and need to buy extra groceries or you finally run our of printer ink or the school fee you forgot about?

These aren’t exactly emergency-fund worthy so how do we care for them. Most churches just allow all their programming staff to pad their budgets to be prepared. Actually, if you’re the one program that fails to pad your budget, what do you do when the unexpected happens? I like Steve Stroope’s strategy of removing the padding and creating a simple process for when programs have an unexpected expense or opportunity. In this video, I illustrate the strategy:


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EZ PPP Forgiveness for Churches

I had been wringing my hands at how difficult the SBA made the first Paycheck Protection Program Loan (PPP) Forgiveness Application. It was like they had asked the IRS for advice. The EZ application cuts it down to only one page of numbers. Without a doubt, your bank will be asking you for more proof, but why would you make it so complicated to ask “How much of the loan did you spend?” That isn’t something that you need pages of worksheets to answer.

The vast majority of churches should qualify for the EZ application. I would also guess that the vast majority should choose the 24-week period instead of the 8-week to maximize forgiveness. Watch the video below for the walkthrough:


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