This morning I read a newsletter of a church that I am particularly close to.  I read that going into the fourth quarter they are over $130K behind budget in their giving.  That is a lot of money!  Now this same church is only days away from their annual campaign in which they will attempt to garner pledges for the new year.  If they were to ask for my advice, I doubt they will, here is what I would tell them.  Perhaps these lessons can help you.

First, when you are that far behind in your budget it is not simply the economy that is to blame.  Too many churches are using the economy as an excuse for the decline in giving.  While it is true that giving is more challenged during these times, the decline is minimal compared to what most people think.  In every case that we have examined where a church is seeing massive declines in giving it is always a result of something rather than the economy.

So, break from the politicians and stop looking to blame your shortcoming on the economy.  Find out what the reason is for the shortfall.  My guess with the church I have mentioned is that they were overly optimistic in their budget projections.  If you are missing badly your current budget you need to come out with a better more realistic budget for the new year.  Donors will reward fiscal responsibility.  If you regularly over state your budget needs they will not respond well.  You have to show them you know how to run the business side of the church.  Fiscal responsibility is one of the key reasons people give to churches and charities.

Unless Warren Buffett is a member it is doubtful that you can close that large of a gap.  The church that is over $130K behind might have a large donor that gives the bulk of their gift in the fourth quarter.  Most churches see a huge December offering.  However it would be unrealistic to think you could make up more than a 10% shortfall in your budget.  If you are more than 10% behind going into the fourth quarter my advice is to not push hard to close the gap.  Pushing hard to close the gap gives the impression that you are desperate.  People think twice before pouring money down a hole.  Don’t come off as being on the verge of going down the hole.

Have a positive fourth quarter plan to bring in as much as possible.  The church that is over $130k behind in their budget really does not have a stewardship plan in place.  Rarely is stewardship mentioned or focused on other than the annual campaign every fall.  Seldom is there a sermon on giving.  Without a plan of action you are planning on failing.  While they might not close the huge gap that now exists they can still raise significant dollars.  If they asked me I would recommend several steps of action.  Here are some things I would do…

• Revise the rest of this years budget.  You are not going to make it so why keep it as a mark you cannot hit.
• Preach a positive sermon series on stewardship.  Positive, not guilt ridden or desperate sounding.
• Use every offering time as a stewardship teaching moment.  I just happen to have an e-book on that called, “Elevator Pitch Your Offerings.”
• Incorporate lay testimonies into your service showing the positive benefits of giving.
• Focus each week on a ministry of the church and tell how members gifts support that cause.
• Prepare a compelling end of year appeal letter focusing upon all the positive things the church does.  I have an e-book on that too!

The news is not good with regards to the economy.  The Stock Market plunged below 10K over the past two days on fears that the world’s economy would once again “technically” plunge into a recession.  There are a host of reasons for this fear from Europe’s problems to China falling off on production.  For whatever reason we are mired in slow growth to no growth economically.  All the negative headlines does not produce confidence in the American people.  When 70% of spending comes from consumers and consumer confidence is at a low point then it becomes a Catch 22 with regards to any economic recovery.

So, what does this mean for you and your church?  Everything and nothing.  Let me explain.

First, it means everything.  Consider…

• When Consumer Confidence is low on Main Street it will be low in the pews or chairs of your church.  As the offering plate is passed it causes people to pause.
• Raising funds will be more difficult than in the past.
• Members will be more critical of your spending and budget.
• Capital campaign pledge totals will be lower than in the past.
• Loans will be more difficult to acquire.
• You will have to pay closer attention to your spending habits and to giving trends.

This blog is about stewardship.  A few times I have written in the past about political issues but it is rare.  You don’t come here to hear my opinions about the political landscape.  There are a host of other blogs that can provide good political discussions and countless other places one can go for that.  However, today I want to make an exception to my rule.  What follows are my opinions and you know the old saying, opinions are like belly buttons, everyone has one.  So here is mine.

I wish the government would simply sit down, shut up and get out of the way.  I am tired of every time a government official thinks they have a brilliant idea of how to get our economy started in reality their speech causes my 401K to lose more value.  As I write this the Stock Market is plunging further downward.  Thank you Mr. Bernanke!  After your statements yesterday the market has now lost about 500 points.  With help like that is it any wonder we worry about a double dip recession?

Then we have our wonderful politicians who are convinced that the answer is more government intervention.  More tax payers money thrown at more programs in hopes of somehow creating jobs.  It didn’t work the first or second time so why do we think it will work now?

I have just spent two days talking to Christian small business people.  We never talked where they were politically.  They never said but what they did say was that they want the government to get out of their way so that their businesses can rebound.  Not one of them thought that things should be as bad as they have become and all of them pointed to the governments actions as making matters worse not better.

By the way none of them were rich fat cats.  They were regular Joe’s and Jane’s the kind that are in your services every weekend.  All of them have a fear of uncertainty hanging over them when it comes to the recovery of our economy.  All of them wonder if they can continue to give to their church at the level they have been or once did.

Why should you care?  Because despite what some politician like to tell you trickle down economics works.  As a small businessman if my business makes more money I tithe more to my church.  As my revenue goes up so does my churches contributions.  Also, as my business picks up I hire other workers who in turn then have the ability to tithe of the income they make from working for me.  It is pretty simple really.

It might be simple but of course now our leaders have a brilliant idea to increase taxes by eliminating charitable giving from our tax returns.  Who is advising these guys?

Please, Washington, just get out of our way and let us run our businesses unhindered and then the economy will improve.  When that happens donations will increase.  That is why it is an important issue for a stewardship blog!

Mark Brooks

Founder and President

The Charis Group

The recession has made an impact on everything from the cost of your house to what your next capital campaign will bring in.  Yet few are willing to admit to that truth or tell you the truth.

A few months ago I was at a conference where we displayed our booth and talked to church staff members about the value we bring to the table.  There were all kinds of businesses in the exhibit hall including five other stewardship firms.

One of my competitors had a brochure displayed that touted the results of his campaigns.  It was impressive.  The churches listed had a pledge to budget ratio from four to eight times their budgets.  When I was asked what we were finding as a pledge to budget campaign I told attendees that we were seeing one to perhaps two times budget.  The reality is that this past recession has downgraded what churches can expect to raise in a capital campaign.  Is our firm inferior to my competitor that advertises results far higher?  No, we are simply honest and he is, well…

The truth behind this competitors claim is first all those wonderful examples he touts are PRE recession campaigns.  They were also driven by six and even seven figure contributions.  The other truth is that they were five year campaigns not the standard three year campaigns most of the stewardship industry holds.  So, he is not actually lying.  He is painting a picture that is misleading.

We would rather tell you the truth and lose your business but maintain your respect than hype results so that we win the contract.  We base our projections on what we see in current campaigns and in what laypeople tell us about pledging.  Unlike many firms we actually talk to your laypeople ahead of the campaign to see how the economy might impact your campaign.  Also, I have talked to other presidents of stewardship firms that I respect and they are seeing the same results.

So, the real story is that this economy is impacting pledge to budget totals.  If someone tells you their results are different you had better check them out thoroughly.  They are probably giving you a sales answer not reality.

One last thing, even though you might see less in terms of pledging, that does not mean you cannot still raise dollars.  One times your budget pledged is still a lot of money to do ministry with.  Waiting until the economy gets better, whenever that will be, will not raise you more money.  Waiting will only mean you lose money.  One times is better than no times!

Mark Brooks

Founder and President

The Charis Group

One of the biggest mistakes that leaders make is raising expectations too high.  You need only look at the current political landscape for a lesson in how devastating this can be.  Our government promised that the stimulus package would create jobs and drive the jobless rate below 8%.  It did not happen and now the public is leery of another stimulus despite the promises our politicians make.  Look at the approval ratings of our leaders to see how creating unrealistic expectations can damage a leaders status and thus his leadership.

Pastors are not immune to this mistake.  In my top ten list of mistakes that pastors make having unrealistic expectations is high on the list.  My list of examples runs long of pastors who in attempting to “sell” the congregation on some new initiative cast unrealistic expectations of what might occur.  When those expectations do not occur it is only natural for disappointment and disillusionment to set in.  While it might not cost you your job it will impact your future leadership potential.

Common Areas of Unrealistic Expectations - The following is my list of the most common unrealistic expectations I find.

• Believing that a capital campaign will raise more than is possible.  As a result of this economy good campaigns raise about one to one and a half times your budget.
• Believing that if you build a building attendance will dramatically increase.  In my book, “Stewardship Myths,” I call this the Field of Dreams Myth.  It is not if you build it they WILL come.  It is if you build it they MIGHT come.  Be careful you do not oversell the potential growth of a new building.
• Believing that budget receipts will drastically increase simply because your need is great.  Unless you have had major increases in numbers of people don’t expect donations to rise significantly.
• Believing that a project will not take as long as it does.  It will take you longer than you think, so start earlier than you think you should.
• Believing that the cost will not be as high as it is.  It will not only take longer to build you can count on it costing more than you think!
• Believing that everyone sees the issue as you do.  Most pastors are totally ignorant of how their people really feel about issues at the church.  Your members seldom tell you honestly how they feel.  Don’t assume everyone is on board.

My favorite season is fall.  In a large part that is because it is football season.  I can watch college football from noon until midnight.  I love the sport of football.  For me you can learn so much about life and leadership through football.  So, since it is the season of the pigskin I thought I would take a page from football and talk about game plans.

Winning teams have great game plans.  It starts by scouting out the other team and knowing their weaknesses and strengths.  Good coaches know how to utilize their players and their play book in a way that will give the team the best chance for success.  You will not find one team at the college level and certainly not at the professional level that goes into a game without a game plan.

What is a good strategy for your favorite team is a good strategy for your church, a game plan!  Few churches in America have a game plan.  Monday I was at Christ Church in Fairview Heights, IL outside of Saint Louis, MO.  Their giving has risen by double digits for the last several years.  How did that happen?  They have a plan and they work their plan.  They will also tell you they have a good stewardship partner, us!

What is your game plan for stewardship success?  If you have to think about what it is then you probably do not have one.  As the old saying goes, failing to plan is planning to fail.  So, get a plan and work your plan!

Good game plans play to the teams strengths.  Do you know what your stewardship strengths are?  Do you have a clear understanding of how your finances are doing?  Most pastors that I work with have little knowledge of where they truly stand.  One reason why is that they have very little interest in stewardship until they hit crisis mode.  Pastor, you are the coach of your church.  As such it is imperative that you know your strengths and weaknesses as a church.

Good game plans are multidimensional.  Don’t put all your eggs into one basket.  To have a good stewardship plan you need multiple strategies for success.  If the weekend offering is your only strategic stewardship moment you will probably not see your giving increase.  The times have changed and so must our approach.

This last week I have had the pleasure of working with several churches across America from Illinois, to California, to Ohio, to North Carolina to Pennsylvania.  Each of them has a plan and they are working on their plan.  As a result they are winning at the stewardship game where other churches are struggling.

Isn’t time you get a game plan?  What we do as a church is much more important than a game of football.  We are engaged in eternal issues.  Don’t let the lack of funding keep you from winning.

Mark Brooks

Founder and President

The Charis Group

PS.  We design stewardship plans at an affordable price.  Contact us today to see how we can help you devise a successful game plan for your church.

A few years ago if I heard of a church that had hundreds of thousands of dollars in reserve I thought they were not doing anything for the Kingdom and lacked faith.  My view was that God gave you money to spend on ministry.  Putting money in a bank was unthinkable.  Now I view churches with healthy reserve funds as being wise and prudent stewards of God’s resources.  In fact we now encourage all our clients to have a healthy reserve of cash.  The impact of this past recession is what has changed our view.  Smart churches have a reserve fund and you should too.  Here is why…

1.  Banks are impressed with churches that have a reserve fund.  While it will not guarantee that you will get the loan it will put you in a better position to acquire financing.  I know of one banker that requires a church to have at least six months operating capital held in reserve before they will even talk about a loan.

2.  Reserve funds protect you from unexpected expenses.  The church I was the Senior Pastor at for fifteen years once had an air conditioning unit go out.  The repair ran several thousands of dollars.  At the time we had no reserve fund and coming up with the money for a new unit put major stress upon our budget and me!  Thankfully the unit went out in the winter but we still had to replace it.  From that point on we began building an emergency reserve fund for moments like that.

3.  Reserve funds allow you to operate as your own lending partner.  In the above illustration my  church had to come up with about thousands of dollars immediately.  Our bank loaned us the money but they charged us interest.  We paid it off quickly but from then on we used our reserve fund as a means by which to finance small projects rather than depend upon a bank.

Well, you say, that sounds good but how do I build up a reserve fund?  Here are some ideas…

1.  Start a reserve fund immediately!  It is just like in your personal life.  You will only start saving by starting a savings account and putting something in it.  So, start now so that ultimately you will have a reserve fund.

2.  Make it a line item in your budget.  At my church we began by putting a line item of 5% of our receipts into a reserve fund.  Little by little, year by year you can amass a large sum.

3.  Encourage estate planning at your church and start an endowment.  Less than 10% of the churches in America have any kind of estate planning or endowment fund.  In the next decade we will see the greatest transfer of wealth in the history of the world.  Your alma mater is working on theirs and they are talking to your members.  Why don’t you have a lure in the pond?

4.  Put a percentage of any capital stewardship receipts into your reserve fund.

5.  Put any left over monies at year end in  the reserve fund.  Don’t laugh, I have several clients who will receive more funds this year than their expenses.  Why not invest it in the future?

6.  Do all of the above.  

God has called us to be wise stewards.  Having a reserve fund is good stewardship.  While our trust is to never be in our bank accounts having a reserve fund can  mean the difference between realizing your dreams or simply dreaming.  Start today to build your reserve fund.

Mark Brooks

Founder and President

The Charis Group

Don’t look now but the end is near!  The end of the year that is.  While it might seem like summer is not really over yet and fall has just begun wise leaders are thinking about the end of the year.  Are you preparing to end the year well with regards to your budget receipts?  Few think far in advance for this crucial quarter coming up.  End well and it sets the stage for the next year.  End poorly and it just could spell the end of ministries that are essential to your churches growth and future.

What steps should you take to prepare for the year’s end so that you will end will financially?  Here are my top steps…

1.  Evaluate where you are and where you need to be.  Are you ahead or behind budget?  Assessing accurately where you are right now is vital.  How do you do that?  First of course look at where your receipts are compared to your expenses.  Are there any major expenses coming up this quarter?  Evaluate your upcoming spending and needs.  Then I would look at the last couple of years fourth quarters giving history.  Did you have good fourth quarters or bad fourth quarters?  Your past is a good indication of how your future will be.  Unless you have had significant growth don’t expect this fourth quarter to be much different from last year’s fourth quarter.

2.  Devise a plan of action to close out the new year well.  I continually harp on the lack of stewardship planning in churches.  Most churches never make stewardship plans until they are in crisis mode.  Plan now for a successful close out strategy.  If I were you I would have multiple strategies for positively communicating your need for funds.  Plan and implement a strategy for every segment of your congregation.  Plan and implement a strategy for every platform of your church, THE platform, all print and electronic communications, etc.

3.  Start NOW implementing your plan!  Don’t wait until December to do something thus looking desperate.  Begin working now on increasing giving so that you are not woefully behind as you move into the last weeks of the year.

4.  Write a compelling end of year appeal letter.  Well written end of year appeal letters and emails bring in significant funds.  You can count on your members receiving a lot of mail from other charities so get yours in the mix.  This past week our family received a letter about giving to a Thanksgiving meal.  We were barely into September and here is a ministry asking us to provide funds for their Thanksgiving meals.  Start working on your letter today.

These are four easy steps that anyone can take that can and will help you close out the year well.  Too many churches lose valuable time without acting wisely to close out the new year.  Begin thinking and planning now and you will be ahead of most.  The end of the year is closer than you think.  Work towards ending well now and the chances of a good ending are greatly increased.

Mark Brooks

Founder and President

The Charis Group

There are certain moments in our life where events define them.  For my parents it was The Great Depression and the attack on Pearl Harbor.  For my generation it was the assignation of President John F. Kennedy.  For this generation it will be forever 9/11.  Where were you when you heard of the attacks?  Everyone remembers and will remember it for the rest of their lives.  It is seared into us and will never leave us.

The one thing that resulted from that day is that we were reminded that life is uncertain.  We were the most powerful country on the face of the earth and all that power could not protect us from a few extremist bent on a suicidal mission to kill thousands.  We recovered from that day but the uncertainty never left us.  Even when our economy was roaring back to full speed I would be asked how the economy was going to impact giving.  Despite good economic conditions were seemed to be always looking over our shoulders wondering when the next calamity would strike.  Uncertainty.

The Crash and Panic of 2008 that led to what may call The Great Recession has exacerbated the uncertainty of our society.  We now hear talk about how things will never be the same.  We talk of a new normal.  Over and over, again and again you hear and read the word uncertainty.  With the wild volatility of the Stock Market, the malaise in Washington, the decline in home values and high unemployment we can not help but be uncertain.

How does this impact your raising funds?  If there is uncertainty on Main Street you can be certain there will be uncertainty within the walls of your church.  It means you will have to adjust to the times that we live in.  Here are some general observations of the impact we are seeing of these two events that are defining this generation:

• Giving to religion will stay virtually flat.
• Churches with a compelling vision attract people and dollars.  Churches that are not growing will struggle.
• Pledging to capital stewardship campaigns will be less as people continue to feel uncertain about their future financial standing.
• Money can still be raised but it will take more creativity, work and time.
• Acquiring loans will be more difficult than in the past as banks adjust to increased federal scrutiny over their balance sheets.
• Members will be more cautious about any building plans so expect to provide more answers than in times past.
• Moving forward for the typical church will now take longer.

Easy money is gone and will never come back.  At least not like it was before the Panic of 2008.  There is no waiting until things return to normal.  We have a new normal and the sooner we face that reality the better off you and your church will be.  Times have changed and so must your strategy when it comes to banks and acquiring financing.  We are operating in a new world and we need to understand what that means for you and your church.

The following are some key points for you to consider as you approach the possibility of acquiring a loan.

1.  Start sooner rather than later!  The number one mistake churches make is that they wait too late to begin discussions with lending institutions.  Expect the process to take longer than you think, so you need to start immediately.

2.  Provide solid financial data to support your claim of being a good risk.  Churches should approach a bank much like a small business does when acquiring a loan.  You need to present a picture of health and vitality.  Banks are not in the business of giving money away.  They are in the business of making money.  Thus they will only loan to those that are a good risk for a return on their investment.

3.  Build a healthy cash reserve.  The saying is, “Cash is king!”  A good reserve will help you gain the attention of lenders.  It shows you are a good risk.

4.  Start a capital campaign as soon as possible.  To build a healthy cash reserve you need an additional stream of revenue.  This is what a capital campaign can do for you.  Start sooner rather than later.

5.  Pay down your existing debt aggressively.  Any current debt you have can and will be used against you by lenders.  So, pay down as much as you can and show you have a plan for paying off that existing debt.

These simply steps could mean the difference of simply dreaming about a project as opposed to actually starting a project.  Banks are loaning money to churches.  However they are being selective about who they loan to.  With good planning you can be one of the churches they extend a loan to.  Working towards that goal today might make the dream of your project that much closer to reality.  It is a new day.  Are you doing what it takes to live successfully in this new day?

Mark Brooks

Founder and President

The Charis Group