I’m an accountant that makes videos on the side. I have very limited skills in the area of video editing, and I don’t want to spend the time to learn fancy new tools. Prior to PowerPoint, I would make about 3-4 videos per year. I didn’t mind the creating part, but the video editing was intimidating.
Since I learned I could just turn my PowerPoint into a video, I make 4-6 videos a month! No more editing! Everything is finished in the creating and recording process. Once I’m happy with the recording, you just click export. Plus, it seems like every other month I learn something new…almost like Microsoft had video-making accountants in mind when they update PowerPoint.
In this video, you are going to see a recording of me making this video. Behind the scenes-ish.
Disclaimer: This is general tax advice so don’t sue me. The question I was left with last week was: Can the church claim a payroll tax credit if their pastor is out because of COVID? After doing much research and calls, I came to the conclusion that the church cannot claim the tax credit.
The primary reason for this is the pastors confusing tax status. The IRS considers them to be employees, but the Social Security Administration considers them to be self-employed. This credit is tied to payroll taxes which are under the Social Security Administration.
This does open it up that the pastor might be able to claim this tax credit on their personal tax return. This could be a nice bonus for pastors…as long as they keep documentation of their time out. My preliminary estimate is that pastors could get around a $2,000 credit on their taxes. Here’s how I calculated it:
$50,000 in Self-Employment Income (Base Salary of $42k + Fair Rental Value of Parsonage of $12k – Salary Withholdings of $4k)
÷ 260 Work Days (The IRS assumes self-employed folks work just 5 days per week 52 weeks a year. Isn’t that cute.)
x 10 Days (if you were out two weeks, you would get 5 days/week.)
In the 4th quarter webinar for 2020, Sheri Meister takes the learnings from Matt Miofsky’s book “Let Go” and applies them to the church fundraising world. Here’s what I got as the key teachings:
A New Hope: Discover who you are as a church and what success looks like for your church. Without hope of a better future, giving, volunteering, and passion will dry up.
Letting Go is Necessary: You can’t have it both ways. The world we were ministering to in 1970 or 1990 or even 2019 no longer exists. What ministries and methods are still life changing and what is life draining? We just don’t have the capacity to do a bunch of new things to reach the world of 2020 while still doing everything we’ve always done.
Value the Past without Living in the Past: This was a powerful statement from one of our attendees. Is your past a foundation you’re building off of or an idol you’ve started to worship?
Disclaimer: This is general tax advice so don’t sue me. I had almost forgotten about the Families First Coronavirus Response Act (FFCRA) until I got a call from Bismarck McCabe UMC. They were on top of things and knew more than I did. The only question we still have is if clergy are covered.
Long story short, FFCRA gave employees an extra 80 hours of sick leave (or proportional if part-time) if they or a member of their family was directly affected by COVID. This is different than being affected by the shutdowns. You can see more about this in the links below. To help pay for this sick leave, you can claim a payroll tax credit! This is good news for churches that already file a quarterly Form 941.
Here’s what makes this credit so good:
Dollar for Dollar: You get reimbursed 100% for this sick leave in most cases. This includes health insurance costs.
Includes Health Insurance Costs: While few lay employees receive health benefits from the church, that portion can also be applied to the credit.
Refundable: This credit is refundable. A lot of our churches don’t pay in much for payroll taxes so it’s nice to know that, when the credit is larger than the taxes, you’ll get a check back.
One of the scariest tasks that pastors and others leaders can face is asking for money. But there are some people that seem to be able to ask for large donations without breaking a sweat. Are these people just born different? Maybe. If you are one of the normal people that doesn’t look forward to asking for donations, Sheri Meister can help you.
There are really two things you need to pay attention to when preparing to make a big ask. First, pay attention to building the relationship. Treat the donor as you would want to be treated. They are not a checkbook attached to a person. They are a person. Don’t just call on them when you want something. If you go to make the ask without building the relationship, get ready to be shot down.
Second, pay attention to building the case. Sometimes when people go to make the ask, they don’t have it clear in their mind the details. The most important thing is: What will be accomplished as a result of this gift? How will the world or the church or whatever going to be better? You should also have a good enough grasp of the strategy for using the gift. You’ll need to know the who, what, when, and where.
Sheri Meister is the primary teacher relying on her decades of experience in the non-profit and fundraising world.
The State of South Dakota recently announced that $40 million will be made available to Small Nonprofits that are seeing a large reduction in Cash Flow. If you’re a South Dakota church, AND your Net Operating Income is down, you should apply.This sounds like a great deal because there seem to be no strings attached (e.g. PPP Loan forgiveness).
They are talking about Net Operating Income so you’re going to have to exclude all the donor-restricted gifts and expenses (capital campaigns, mission of the month, memorials/bequests, youth fundraisers). Here’s the basic formula:
Net Operating Income (income – expenses) for March – August of 2019
LESS Net Operating Income from March – August of 2020
LESS PPP Loan Amount or similar Federal assistance
EQUALS Eligible Amount. Divide this amount by the Net Operating income from the first bullet. It should be more than 25%.
Even if it is not more than 25%, you are still encouraged to apply as leftover grant money will go to this second tier of nonprofits. Watch the video below for how to apply:
How many times have you been at a church meeting where you are discussing a great ministry opportunity, but there’s no money available for it…except for the money in that one fund? Most churches have that pot of money whose purpose is not written down but is actually embodied by the committee that has historically controlled the money. That’s not healthy. It becomes a control issue instead of a stewardship issue.
Sheri Meister, Barb Brower, and I talk about how to properly setup funds and how to work with the church to rediscover the purpose of old funds. We believe the donor gave the money to bless the church…not divide the church.We hope this helps you find new opportunities for some old money.