Q&A

What is a good way to pay those who substitute for church employees?

July 14, 2017 2 2 comments
Discussion Topic

Joel Boot signed a letter stating the 2013 formaula for Share amounts per active members.

While the information is beneficial, a letter by snail mail is NOT the most econonomic way to distribute information.

It uses trees and time since the recipient needs to physically move the...

February 3, 2013 0 6 comments
Q&A

Hi there,

Our Pastor tends to take the Youth Group or other members of the congregation out for meals from time to time for various reasons and then submits his receipts for reimbursement.  Should his portion of the meal be considered a taxable benefit?

I have wondered a few times...

August 31, 2012 0 10 comments
Q&A

Hi there,

I'm new to the treasurer role at my church and would like a quick confirmation on ministry shares.  In my reading on the CRCNA website and resources passed on to me, I have a fairly comprehensive understanding of how it all works.  What I'm curious about is how the exact...

June 15, 2012 0 1 comments
Q&A

Our church is looking to retire its mortgage debt as well as raising some funds for a new projection system.  Has anyone recently been successful at this?   What approach did you use to inspire your congregation to open their pocketbooks?

April 8, 2011 0 2 comments
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I am going to be working on the processes involved in our church's finances. Does anyone have any resources (Internet, books) that they recommend? I'm from a Canadian church. 

February 22, 2011 0 2 comments
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We are a small congregation in rural Canada. We are currently using three different software programs to track our donations and do our accounting. Can anyone suggest a single software package?

January 18, 2011 0 4 comments
Q&A

I was wondering if any churches have any established guidelines for how to deal with reserve funds/surplus funds. How much is too much etc. What do you base the number that is acceptable on? revenue, expenses, assets? any other ideas?

July 12, 2010 0 6 comments
Discussion Topic
Hi all, This is a great idea! I often have question on how to do things and how to best record certain data. It will be good to share ideas.
February 11, 2010 0 0 comments
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I think you would need to pay the substitute either as an employee, or contract and issue a 1099. If you pay your regular church secretary it will be reported as wages on her W-2 and she will pay taxes on the pay.

As the administrative assistant at our church I would not want to be paid for my substitute's hours and then have to pay them. I am paying taxes on that and that is being counted as my income. Granted, I work 26 hours per week. Some of the people that cover for me volunteer their time (projection, church website) others get paid (bulletin). The person who fills in for the bulletin for me is also on staff so it gets added to her check. While it may be extra work, it would be the proper way to handle such a situation.

Ministry share payments are the closing item on a local budget in (and this is my guess) 90% of congregations. Pastors, staff, utilities and mortgages all have legal requirements. Ministry Shares are moral obligations. Unlike governments (of all stripes,) churches can not go to that bottomless borrowing well.  However I am in  favor of using the the church's property ownership equity to meet those obligations and or incur a debt to assist (e,g) a local Christian school.

posted in: Ministry Shares

I can understand that churches reduce their giving to Synodical causes. However, Synod spends money on our behalf.  When I attended Synod, there was no meaningful discussion on finances. Too much material in too short a time.  The board of trustees are meeting on our behalf. They have a better chance to instruct head office to reduce costs. Voting with your money is fine for industry, but causes concern in the church.  Should each church also look at their finances and reduce costs if membership dwindles?  What other costs can be reduced besides the minister's salary,  classical quotas and synodical quotas?

August Guillaume

posted in: Ministry Shares

I would like to update the discussion on this topic given the 2016 Synod decision to "re imagine" the Ministry Share system inside the CRCNA.

Actually the article I am using to start this discussion already gets at the heart of the issue. Money is not a problem. Membership and how the Head Office of the CRCNA is organized and run is. 

We all know that membership is declining. So is loyalty as older members pass away. Barnabas Foundation and Christian Stewardship Services are doing awesome work. Their Estate Planning services are responsible for a lot of Estate gifts to the various ministries of the CRCNA. That income is peaking.

H.O does not appear to recognize that as membership declines, their cost should also go down. They have already removed missionaries from the payroll.  The overall cost in the denomination office have not gone down. How is that possible? The cost of not raising Ministry Shares is estimated at $200,000. That would be the salary of some 4 missionaries who are now supposed to raise their own salary. The HO folks of World Mission are not asked to raise their own money, why not? Based on salary schedules as reported in the Agenda of Synod only two of WM executive salaries would equal the $200,000. 

Statistics show the number of professing members it takes to pay for one full time staff at CRCNA H.O. has been increasing which means the HO costs are rising faster than the Professing members!  It is that reality that the Executive has to deal with. Not the Board of Trustees.

Another very important statistic is that the number of professing members per church is declining at a precipitous rate. That means we the CRNA  has too many small churches. From where I sit this is being caused by Regional Home 'Missionaries who have little else to do but promote church plants.Local churches get on the band wagon because of "HO" funding.

John Bolt was absolutely right ... The ministry share program is a very efficient way to raise money.... Leave it alone but solve the cost problem. Also stop creating and or funding new positions in the regions. If churches want to do something in their own area let them pay for it. 

My own church last year reduced the budget for ministry shares from 75% to 60% of what was approved at Synod. That was a decision based on what Council wanted to achieve at the local level. It was a courageous and necessary decision.

The CRCNA HO leaders need to take decisive action to get their costs under control and work at a program to let those of in the pew know what they are paying for. Not with numbers but with names and what those names are doing to further the spread of the gospel. 

Starting with non-paper communication would be a very good start. The Banner?

 

 

 

posted in: Ministry Shares

Thanks!  I can't believe 3 years later I am looking for the same resources again :)  If anyone else is interested the group is now called Compass and their website is under review at the moment.  For Canadians I strongly recommend the Canadian Council of Christian Charities www.CCCC.org   Their is a fee based on the size of your church.  I have used it in connection with another charity and it was invaluable.

 

Blessings, Victoria

Have you checked with Crown Financial Ministries? They're a Christian Canadian group teaching personal finance and stewardship, but maybe they could head you in the right direction? http://crowncanada.ca

Note: I am not affiliated with Crown Financial Ministries in any way, nor have I ever really used their curriculum. We currently use Financial Peace University, from Dave Ramsey to teach personal finance and stewardship in our church... from the U.S., but they do provide supplemental resources for Canadians.

A new distribution system would provide options for each church e-mail - fax or snail mail.

posted in: Ministry Shares

also, believe it or not, there are churches that do not use email. I've found this more true in the US than in Canada.

posted in: Ministry Shares

August,

My understanding is that 90%+ of the announcements to pastors and churches go via email. I'm not sure about this one in particular or the reason it was sent via postal mail. But the vast majority is sent electronically.

posted in: Ministry Shares

Here in the US, the IRS allows all meals related to pastoral ministry an expense.  We can also claim any time we have people over for refreshments or a meal, parishioners or otherwise, as a ministry expense.  We just have to keep a calendar record of who and why.  Having a couple of beers and nachos while leading Theology Pub at the local brewery is deemed a pastoral ministry expense.

Dirk,

Thanks, that does clear it up for me.

Jeff, I respectfully disagree with you. How you categorise expendutures in the church budget has no bearing on the tax treatment of the expense. It is purely a matter of fact whether an expense is a taxable benefit or not. This is overned exclusively by the provisions of the Income Tax Act and CRA's administrative practices. As Reg said above, this has never been a problem for employees in the for-profit sector. Only the employer is prevented from claiming a deduction of more than 50% of the meal. If that same 50% would then also be taxed in the hands of the employee, that would constitute double taxation.

The reasonable free meals for pastors is not an issue and we should not make it one.

Do you have a portion of your budget allocated for his expenses?  Depending on how you structured things, I would think that that should be considered part of his salary and should not be considered a "free meal" at all.

This has never been an issue for anyone in private businesses where employees take clients or employees out for a meal or entertainment. if it did have taxable benefit connotations, I am sure CRA would have been all over this.

Don't wake a slepping dragon!

I can appriciate that you have not been able to find a CRA comment regarding your question. CRA does not comment on questions that appear to have no basis in the Income Tax Act. If you want to obtain an authoritative answer to your question, you should consult a tax lawyer. Even if CRA would respond to your question, the courts have said that CRA cannot be held to commentary provided by CRA employees.

As an intermediary step, You could consult with the legal department of the Canadian Council of Christian Charities if your church is a member. They provide answers to their members churches and organizations free of charge.

Thank you Dirk,

 

I have tried to find this answer online but wasn't successful.  Could you tell me where on CRA's website or Charities Directorate I'd be able to find the information that states the restriction wouldn't apply for Pastor?  I just want to have something in my files.

Thanks,

Lorie

If a pastor meets a member or members of the congregation over coffee or a meal, there is no personal portion that should be declared as a taxable benefit by the church.

You may be confusing the eligibility of the business employer to deduct the full cost of the meal with a requirement to treat a portion of the meal as personal income on the part of the employee. An employer may claom only 50% of the meal as a cost of business deduction, but that 50% is not added to the business employee's T4.

Since the restriction applies only to for-profit entities, charities and churches are not affected.

Overtime Meals and Allowances Provided to

Employees

The CRA’s current administrative policy allows for a

non-taxable status of certain overtime meals or

reasonable allowances for overtime meals. This is the

case if the employee worked three or more hours of

overtime right after his or her scheduled hours of work;

and the overtime was infrequent and occasional in nature

(less than three times a week).

Concerns have been raised to indicate the economic

benefit received by the employee are often minor, the

meaning of a “reasonable allowance” is not always clear,

employer policies often allow for meal allowances after

two hours of overtime and the strict application of the

limitation of “less than three times in a week” sometimes

leads to certain inequitable results.

In order to address these issues, effective for the 2009

year, the CRA will consider no taxable benefit to arise

if:

• the value of the meal or meal allowance is

reasonable; a value of up to $17 will generally be

considered reasonable,

• the employee works two or more hours of overtime

right before or right after his or her scheduled hours

of work, and

• the overtime is infrequent and occasional in nature.

Less than three times a week will generally be

considered infrequent or occasional. This condition

may also be met where the meal or allowance is

provided three or more times per week on an

occasional basis to meet workload demands such as

major repairs or periodic financial reporting.

If overtime occurs on a frequent basis or becomes the

norm, the CRA considers the overtime meal allowances

to be a taxable benefit since they start taking on the

characteristics of additional remuneration.  (CRA website).   (CRA website( 

Ministry Shares are calculated using the number of professing members age 18 and older reported in the yearbook less the number of inactive professing members using the definition approved by Synod in 1998.

 

 "Inactive members are those baptized or confessing members who are delcared by the consistory to have a relationship to the congregation which has ceased for one year or who for one year have not made faithful use of the means of grace, especially the hearing of the Word and the Lord's Supper, unless there are extenuating circumstances (e.g., military service, residence in a nursing home) that make such faithful use impossible.  (Agenda for Synod 1998, pp.579-580)

"Every dollar that goes to debt is a dollar that does not go to ministry." Experts suggest that you need a compelling vision, congregational trust, and unity among the leadership to lead a congregation in a campaign to lower debt. 

Well, that depends doesn't it. Unless a congregation has the unusual capacity to fund large capital projects (new building, restoration of an older bulding), it will find it necessary to borrow -- and that borrowing needs to be done to clearly link the mortar/bricks etc of a congregation to its mission.  To say that debt acquired in support of a physical facility needs does not go to mission sounds profound, but it isn't.  We need to link mortar and mission and have the capacity to articulate that relatinship.

"Every dollar that goes to debt is a dollar that does not go to ministry." Experts suggest that you need a compelling vision, congregational trust, and unity among the leadership to lead a congregation in a campaign to lower debt.  The leadership will be responsible for creating a vision for ministry that can occur with the resources that previously went to debt reduction.  You will need to build ownership of this idea among the congregation and develop communication that provides a complete description of what church ministry could be achieved without the debt. 

A capital campaign needs to be integrated with a refocusing on the spiritual journey and bringing honor to God in how we support our ministries of the church. I have been involved in a building campaign and it is important also to understand the capacity of the congregation, set the appropriate goal, and set a timeline for the campaign that is not too short or too much time so you can sustain the momentum.  The campaign must be focused clearly on the vision for ministry and not just the dollars.  Many churches also use personal contact teams, prayer times, and messages from the pulpit on stewardship and vision for serving others.

Check out the resources on the web on church debt reduction plans.  You will get lots of ideas for a campaign and how to stay focused on the ministry vision.

Tokens are basically an inhouse currency.  A member can purchase say $100.00 in tokens.  This $100.00 will then be included on their charitable tax reciept at year end.  The member is then free to distribute them in the offering of their choice as well as their child's Sunday school class.  The deacons like them because they are easier to count then coins and bills, and they can be reused.

I'm somewhat familiar with the Canadian money, but not the "token". What are these tokens?

Hi Dale, thanks for the info.  In many ways power church looks appropriate for us.  Were I see a problem is our use of tokens as a way of giving.  James at power church says in six years I am the first to ask about tokens.  Is anyone using power church and tokens?  How have you set up the accounting module and the contributions module to handle tokens?

I recommend checking out PowerChurch at http://www.powerchurch.com/ 

I've used it for years and know of a number of other churches that have used it for a long time too.  I've been very satisfied with how it works. It's easy to use and has a lot of features.

We just talked about this question of reserves last night at our deacon's meeting. Our church has had some years where it has been tough to meet expenses, the budget was trimmed and trimmed, with the result that we now have no reserve for big expenses. Within the last year we had to complete a large air conditioning repair at a cost greater than our annual building budget. I feel grateful that our "surprise" was a "mere" $10,000 compared to some of the numbers others have mentioned, although our building is still relatively new.

We are grateful that for now we are on target with the current budget, but aware that our lack of reserve could result in a collective heart attack, not just with a major building issue, but  with anything that needs replacing over time. Other things we may consider building a reserve for include office equipment (computers, copiers) and our technology for worship (more computers, microphones, sound board.)

So, here we go into budget season again (fiscal June-May) and we'll be asking our budget committee to consider this as they wrestle with next year's numbers.

Hello again,

I am familiar enough with both types of reserve funds and am interested in other church's experience with the second.  Your church's experience with approximately 2% of monthly collections in our context would not begin to meet our long term renovation/restoration needs.  In fact, 2% is just about what our annual budget includes for general maintenace (which we also find a challenge)  -- keep the building functioning, but not in a state of maintenance that in an ideal world would be desirable. We would probably need a minimum of 6-10% of general fund offerings (annual total between $160,000 to $180,00)  to anticipate the larger, capital projects without borrowing funds with interest payments.

Smaller worshipping community + large, older but very useful buidling + aversion to borrowing = temporary "immobiisme"

Cheers,  Dale

 

The cash reserve we previously mentioned deals with the day to day expenses of a church and having enough cash on hand to manage through variances in the weekly offering cash flow.

What you are looking for is a "savings" type fund where certain amounts are set aside now for potential future expenditures.  My home church maintains a Building and Grounds fund for just such expenses.  A set percentage of the general fund offering (one or two percent) is allocated to this fund each month to help accumulate the needed capital to be able to address the major expenditures when they come. 

At the same time, these major expenditures can be minimized by keeping up with regular preventative maintenance.  Too often in an effort to balance a budget, simple, minor repair items are postponed to help save a few dollars.  The result can all too often be a major expenditure far sooner than was necessary.

So while developing a "savings" fund for those big items when they do come, don't forget to include enough in your annual budget for proper preventative upkeep.

Lost a letter in my name, this is Dale Poel, All Nations Halifax:

I am interested in a different version of "reserve fund."  After being introduced to the legally required Reserve Fund for my condominium, it FINALLY dawned on me that our church has never had or even thought of that kind of reserve fund.  The result is that we have always been caught off guard when our bulding needed some major attention. The comments above are talking about a month or two of "reserve" available to handle monthly cash flow, if necessary.

I am thinking of a Reserve Fund that is found as a line item in the annual budget and is a reserve against identifiable, future building/infrastructure expenditures.  We bought a 100 year old inner city church from the UCC in 1995 and, with the sale of existing property and a small loan from church help fund did a reasonable amount of renovations (new electrical, kitchen, bathrooms, roofing).  Then, we stopped thinking about the building (sort of), but the building didn't stop normal wear and tear.  In a condominium context, your Reserve Fund study anicipates the life span of key features of your building and establishes a recommended yearly set aside to anticipate these future needs.

Without that knowledge from a reserve fund study, a congregation will always be SURPRISED when they are confronted with the need for a new furnace, shngles on the roof, exterior painting or repointing of 100 year old masonry.  We are currently SURPRISED to need a $250,000 to $300,000 renovation/restoration to our foundation and brick work, plus some work on the stain glass windows.  Our Council has had a heart attack and, in the best of traditions, has deferred the work while we wonder whether or not we can raise that amount of money from within or without of the congregation.

Some of this surprise may come from the mistaken separation of building from mission.  In our case, the bulding -- its capacity, multi-function community and program use), its prime location within the city -- is intimately related to our church's mission.  We are in the process of developing a Mortar to Mission statement that clarifies that relationship and justifies the expenditures necessary to keep the building/mission in place. 

This issue may be exacerbated by the age of our building, but even a new church has to anticipate replacing an asphalt shingled roof within a 20 to 30 year period.  Twenty years from now when we may have to do that, it will be a $100,000 project.  If you have strong themes in your church culture against borrowing and paying interest, you have to anticipate these expenditures on in the annual budget and have that reserve set aside on an annual budget in some (conservative) investment fund.  eh?

The key issue is what do we call reserves and what are surplus funds. Much of this depends on the overall budget size of the congregation and the seasonality if any of the weekly offerings. 

I would suggest that a reserve should be maintained that enables the church to meet its key obligations for at least one month if not two. The key obligations would include the staff compensation as well as items such as utility bills and any contractual obligations such as a mortgage payment.  These reserves should be used to handle costs during times of variations in weekly giving.

Surplus funds would generally be related to a special gift such as a bequest, a one time large contribution, or simply greater than anticipated receipts during a year.  The use of these funds should be one time in nature since it can not be assumed that the church will receive such extra income on a regular basis in the future.

The council will need to determine if the inflow of extra funds is becoming a regular occurance.  If it is, then they should consider ways to expand their ministry.

I believe it is important for the council to be very conservative in its investment of reserve funds or surplus funds.  The church's contacts at their local bank should be able to assist in this if needed.

 

 

 

 

The same question came up at our Admin Council meeting last night, so I'm hoping for an answer as well. Anyone?