The other day Sheri Meister and I led a workshop on becoming Financially Fit. During the workshop, we discussed long-term investing strategies. That’s when we got the question again: What’s the difference between an Endowment versus an Investment Account with the Foundation? This wasn’t the first time I’ve answered that question, but I don’t think I’m always speaking the same language so I’ve been thinking of an analogy to help.
Long-term investing is like an apple tree. A few years back, Gus got my wife Betty an apple tree for Mother’s Day. That is a long-term investment. The first few years you just hope it survives (much like an investment). After a while, you get to enjoy the fruit of your patience (apples or investment income). Now here’s the difference:
Endowments: If you manage the apple tree like an endowment, you are not allowed to harvest any wood from the tree. You can eat the apples each year, but you can’t lop off a branch to make a walking stick. The tree (i.e. principal) is off limits. You just enjoy the fruit each year.
Investment Account: If you manage the apple tree like an investment account, you are to free to harvest the wood as you please. You can even cut the whole thing down. The tree is there for you to do as you wish. As long as you don’t cut it all the way down, you can still enjoy the apples whenever you want.
When it comes to money issues, there is always a temptation to give people advice that they’re not asking for. I remember the first year that our Board of Pensions issued rebates. A number of us at the Conference really wanted our churches to just sign those checks back over to the Conference to support our Miracle Offering. Hmmm…kind of like offering in-store credit. Have the United Methodists become the Menard’s of denominations?
As I watched how churches used that money, the thing that caught my eye the most was how Beresford Zion UMC made the decision. They met and prayed, and over the course of time they decided to put it towards upgrading their technology to better reach the unchurched. The process they used to make the decision led them to make a better decision to get the most out their unexpected windfall. Here’s what to watch our for:
Asking for Forgiveness instead of Permission: I’m sure you have good ideas on how to use the money, but it’s wrong to try to commit the money to your idea without consulting the other leaders.
Relying on Brainstorming: It’s difficult to think in a group. It’s even more difficult to think in a group talking about money.
Avoiding the Decision: Sometimes we kick the can down the road for years hoping to make the perfect decision or have everyone in perfect agreement. I kind of wonder if there aren’t ulterior motives behind this strategy of avoiding making a decision.
What percent of your week do you spend at work? For me, it’s right around 40% of my waking hours that I’m in my office for the typical week. With so much of my life being spent in my office, it seems foolish to not make my office a pleasant space to be. As soon as I moved from a cubicle to an office, I have always tried to make my office my own. In recent years I’ve taken it to the next level as you’ll see in the video.
The first thing you need to know: You have permission to design your workspace. For church workers, you may not necessarily have permission to spend money to design it, but you should take ownership of your office. Once I took ownership of my space, I accepted the responsibility for making it my own…which sometimes meant spending my own money on things I wanted.
There’s some simple and pretty much free things you can do to design your workspace.
Imagine how you want to feel and how you want others to feel when they enter your office.
Feel free to unload stuff you inherited from the previous resident. Whether it goes to storage or the dump, either works.
Experiment with rearranging the furniture…especially they position of your desk if that’s your main workspace.
Look for stuff in excess in your home that would add to your office.
A number of years ago, I had the honor of working with Pastor Howie Baird when he was serving Grand Forks Wesley UMC. If I recall correctly, a big concern of Howie’s was that about 25% of the church’s income came from three donors…all in their 80’s. At the time, Howie was working with one of the donors to have them redirect their giving to an endowment that would provide a source of income indefinitely to the church long after the donor had passed.
A little over three years ago, I met with Pastor Charlie Moore and his finance chair, Joel Metz. We discussed plans to get Sioux Falls Sunnycrest UMC on solid financial ground. Part of their plan was to contribute 3% of their offerings into an investment account so that the church would one day have an emergency fund…which is now fully funded.
The reason I share these with you is that a lot of pastors and church leaders wish their churches were better off financially, but rarely take the steps that could lead their churches in that direction. The future ministry of your church will be much brighter if you start planning and then acting today on securing your church’s financial future. This webinar, led by Sheri Meister, will help you get started today.
Honestly, when cutting your paper use, you’re not going to save a lot of money usually. Cutting paper will save more time and energy than money. Think about it. When you do a mailing, how much does it cost? Usually it’s 1¢ per sheet of printed paper. The stamp costs 55¢. Think about the time it takes to print and fold and stuff and address and stamp that mailing. The other day, I had a mailing of just 160 pieces when the folding machine broke down. I just about wanted to quit the day the folding machine quit.
So…I have an aversion to messing with too much paper. Here’s the places where I see good opportunities to cut paper usage:
Printing: I’m surprised how many people don’t seem to be aware that paper has two sides. You can probably save a couple of reams of paper each year by printing on both sides or reusing paper.
Opt In Mailings: For mass mailings, sometimes we’re afraid to switch to digital because we know someone that doesn’t use a computer. This is our excuse for sending paper to everyone. Well…why not just have those people that want paper let you know?
2+ Computer Screens: This one isn’t saving money, but it does save some paper. It also makes you more efficient because you’re not running back and forth to the printer as much.
The Bulletin: The short lifespan of a bulletin does not justify all the time and money that go into it. I would guess over 90% of church bulletins are never looked at again after the benediction. This makes a church app or a simplified bulletin seem like a better idea.
For years and years I’ve played around with trying to create an Excel-based accounting system. Here’s what I’ve learned: DIY is at best functional but is almost never user friendly. Few if any have the time and skills to build a good system that is usable by anyone but the creator.
Does that mean you should never try to create your own system? No! In fact, I often build templates to share with folks. I even put together another version of my Excel-based accounting system (linked below). Keep this in mind: besides the time you’re spending to create, you need about an equal amount of time for:
Polishing: You’re going to need time to make it look nice. You’re also need to make it easy to use. A lot of times when I build a spreadsheet, I highlight the cells that people need to fill in. Sometimes I lock the ones I don’t want changed.
Documenting: This is the least enjoyable part of the creative process. You either spend your time documenting (writing instructions for use), or you spend twice as much time answer the same questions over and over again.
Disclaimer: This is general tax advice so don’t sue me. It seems like every other month there’s a government handout for churches. I don’t know about you, but the abbreviations and the paperwork can become overwhelming. Well…here’s another one. The Employee Retention Credit (ERC) is actually an older program that was overshadowed by the PPP Loans. If you never heard it or have forgotten about it, join the club. This is a credit you can receive to help retain employees even though your ministry is being impacted by COVID.
Here’s the gist of it:
Payroll Tax Credit: This is like the FFCRA in that it is a refundable credit to your payroll taxes. That means you applye for it through the Form 941.
$7,000/Employee: For the first half of 2021, you can receive up to $7,000 per employee per quarter. Doesn’t apply to clergy employees though.
Negatively Impacted: You need to have 1)had a 20% decrease in Gross Receipts in a quarter when compared to 2020, or 2)had operations fully or partially suspended due to government orders.
No Overlapping: If you receive a second PPP Loan, the wages covered by that loan aren’t eligible for ERC.