Five Pillars of Congregational Financial Management

When most of us think about church finances, we think of the operating budget. That is the day-to-day finances that must be planned for and executed.

But a congregation that is financially healthy actually has five such “financial pillars”. Leaders who would also be good stewards always have these five pillars in mind when planning for the future and when exercising due diligence as stewards of church resources.

1.) The Operating Budget. This pays the day- to-day bills. Allocated funds are designated for staff compensation and operating expenses.  It may include payments into other funds. Operating funds are not “fair game” to pay other requirements.

2.) The Operating Reserve. At any given time cash flow for the operating budget could be disrupted. This rarely happens; when it does, may be only for a short period, but timely payment of salaries, workman’s compensation, etc. could be at risk.  An emergency operating reserve, perhaps equal to a month’s operating expenses, ensures employees have no worries and that other time sensitive payment are not at risk. Funds are not to be used whenever someone sees another need.

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When to Hire a Stewardship Consultant

Pictured: Aggie Sweeney, Bill Clontz, Barry Finkelstein, Tricia Hart, Kay Crider, Mark Ewert, Dr. Wayne Clark, Mary Gleason, and Robin Nelson.

The UUA has a group of nine stewardship consultants who help congregations with annual budget drives, strategic planning (in preparation for a capital campaign) capital campaigns, and endowment program development.

These consultants are all UU lay leaders from around the country, who have received rigorous training.

There are some specific situations in which a stewardship consultant can be helpful to your congregation. Consider hiring a consultant when:

  • The congregation lacks a clear vision and is without a consensus about direction.
  • The congregation needs a fresh perspective from an external, impartial expert.
  • You need help shifting from a myth of scarcity to the reality of abundance.
  • You want to focus on broadly defined stewardship, instead of a narrow focus on fundraising.
  • You would like to implement FORTH, a stewardship development program.
  • You would like to be come a FORTH Partner congregation.
  • Leaders understand that money spent on a consultant can be a wise investment.
  • Recently, few congregants have been willing to work on an annual budget drive.
  • Even fewer have been willing to assume a stewardship leadership role.
  • The congregation has someone with fundraising experience who is willing to lead an annual budget drive, but their previous efforts have not been very successful.
  • There is conflict about which fundraising technique to use.
  • A proposed capital campaign project is too big to rely totally on volunteers.
  • A capital campaign project has been proposed, and a consultant is needed to determine how much money can be expected from congregants.
  • There is no active planned giving program.
  • There is no endowment fund, or the existing fund is moribund.
  • The congregation has a small endowment fund that represents less than three times the annual operating budget.

Stewardship Conversations

In our previous blog, we spoke about creating a culture of giving. We recommended that leaders create an intentional plan to explore the meaning of giving. We suggested that by initiating conversations about giving, you can introduce the topic and reinforce the concept until it becomes a part of your congregation’s life. In this blog we will talk about initiating these stewardship conversations.

Conversations about giving can be initiated in many ways. Use the pulpit, guest speakers, the newsletter, the website, the worship service, and committee discussions. Convene small groups before or after the Sunday service for several weeks. Invite the finance committee to participate in a conversation with congregants about the meaning of spiritual stewardship in contrast to the meaning of fundraising. Make “giving” a major theme at annual budget drive orientation workshops. Prepare visiting stewards (the term we prefer instead of canvassers) to discuss the concept of giving during their conversations with donors.

You may also want to invite a fundraising consultant to facilitate a Mission and Giving Retreat. Focus on these questions during the retreat: What is the difference between stewardship and fundraising?

  • What relationship can we construct among giving, compassion, and community?
  • In what ways can we grow and invest the gifts we have received?
  • How can we return and restore our gifts?
  • What does generosity mean to us? How do we define the term? How will we know if we are being generous? What will it look like?
  • What will we do with increased giving? What difference will it make?
  • How can we make spiritual stewardship a year-round conversation?
  • How can we frame conversations to focus less on the need for money and more on giving as a way to implement our mission?
  • How can we help our society move away from an increasing culture of materialism?

Helping congregants discover their own personal generosity will create joyful givers. Joyful givers will help create healthy congregations that view spiritual stewardship as a vital component of their ministry and that believe that sharing one’s gifts, call, and spiritual vocation is an act of worship.

Expansion of Central Unitarian in Paramus, NJ

Church space limitations come in many different shapes and sizes. Read about how Central Unitarian Church in Paramus, NJ solved their problem. And remember, the UUA offers a variety of financial assistance programs such as Building loans, loan guarantees, and grants.
                                                                                                                                                     Please contact us  or call 617-948-4272 for more information.

Why we give to charity

Thank you to Congregational Stewardship Consultant Aggie Sweeney for sharing this article about generosity and the holiday season with our office.

“The urge to give that is awakened around this time is an important one: Philanthropy plays a crucial role in American society, providing funding for a vast array of services. Giving also connects us as a culture: According to a study by the Giving USA Foundation and the Center on Philanthropy at Indiana University, nearly two-thirds of all Americans gave to charity in 2008. American charities took in nearly $300 billion in 2010.” by Leon Neyfakh

You can read the rest of the article on The Boston Globe website.

First Unitarian Society in Madison & Microfinancing

Stewardship efforts are highlighted in so many unique ways, and First Unitarian Society in Madison in Wisconsin is no exception. This congregation, with over 1,600 members, wanted to give back in a meaningful way. They decided to raise funds to contribute to microfinancing, which can provide individuals in developing countries with loaned money to start small businesses. An article in the Wisconsin State Journal details how the congregation approached raising money for this justice project.

“At First Unitarian, task force members bypassed traditional fundraisers and went to the congregation with a direct pitch to donate money. The church’s foundation pledged to match up to $10,000. The total amount raised would then be invested in microfinance organizations that would pay returns to the church on the money.

This approach, similar to socially responsible investing, made for a more sustainable, longer-lasting program than a one-time donation, said Scott Andersen, another task force member. It also made for an easier pitch — donors would be strengthening the church’s financial health while helping to reduce international poverty.

‘It was a one-two punch,’ he said. ‘There were benefits on both the local and global level.’

About 50 families donated a total of $13,000. With the church foundation’s $10,000 match and a $10,000 grant from the national Unitarian Universalist Association, the church had $33,000 to invest.”

First Unitarian Society also has highlighted information about the microfinancing kits on their website.

A New Definition of Generosity?

I have been thinking a lot about the definition of generosity. Recently, my colleague Ian Evison wrote:
 “I think we are going to enter into a time when the idea of getting people to be more generous is going to need to be much more balanced by focusing on sustainability—even what people will be generous about will be more about sustainability.”

Seems to me that since so many congregants have lost jobs or are currently under employed, that our congregations may be faced with flat annual budgets that reflect the new generosity.

For example, if a congregant had previously contributed $1,000 to the annual budget, and that same congregant is now unemployed, maybe a $250 annual pledge is even more generous than her previous pledge. Maybe you have a dozen other congregants, or more, facing the same dilemma.

By extension, it is quite possible that your annual budget might even be smaller than the previous year and could reflect even more generosity than the previous year.

Maybe a new definition of generosity is needed. Maybe we need to correlate generosity with sustainability. Maybe the idea of getting congregants to increase their generosity means that we focus on sustaining those most important aspects of congregational ministry, rather than expanding into new programs.

The Coming Death Tsunami, written by Lovett Weems and shared by Rev. Brian Covell of Third Unitarian Church in Chicago, pursues this issue. Take a look and see what you think. I would love to begin a conversation about this issue.

Looking forward to hearing from you.

Guaranteeing Success?

I occasionally get inquiries along the lines of:

“How much money will we raise if a stewardship consultant guides us through an annual budget drive? How much more money will we raise than if we conduct the drive without a consultant?” What will be our ‘return on investment?’

Seemingly good questions, yes? Well actually, not so much.

There is simply no way to prove a direct link between your congregation’s annual budget drive success and the person who has led the drive, whether that person is a lay leader or a stewardship consultant. People who espouse this line of thinking believe that the ‘right’ person, using the ‘right’ technique will guarantee success. If that were the case, fundraising would be quite easy.  Positive results could be guaranteed.

Unfortunately, there are just too many variables. For example, the amount of money raised can be effected by any one of several uncontrollable scenarios; a major congregational conflict, the sudden resignation of your minister, the death of a major donor, an economic crisis, an upcoming capital campaign, just to name a few.

So if there is no way to guarantee monetary success, what can a stewardship consultant promise?

  • A stewardship consultant will help you frame an annual budget drive in term of abundance, rather than scarcity, thus setting the stage for a culture shift.
  • A consultant will broaden the definition of ROI beyond a simple definition of how much money is raised.
  • A consultant will introduce (or reinforce) the broad concept of stewardship, rather than a narrow focus on fundraising.
  • A consultant will organize a drive so that you will prevent getting the cart before the horse.
  • A consultant will help to create a clear, compelling case to justify the ask and answer questions like: “What difference will my financial commitment make? How will we be better able to fulfill our congregational ministry if I contribute more than last year?”
  • A consultant will use the Suggested Fair Share Giving Guide to help donors create their own definition of fair share

Here’s how I framed this issue in Chapter One of Beyond Fundraising:

“We need to replace [the old tapes of scarcity] with positive, more accurate statements of abundance, such as ‘Our congregation has a clear mission, we are publicly passionate about that mission, and we will secure enough resources (people, time, and money) to successfully implement our mission.’ A congregation with a culture of abundance believes in the reality that there can always be enough. They believe that diligent stewardship will provide everything needed. The glass is at least half full. Sometimes there are several glasses. Sometimes they even overflow.

Focusing on abundance requires a new vocabulary, one that emphasizes the reality of abundance by diminishing our focus on money. This vocabulary puts fundraising under the umbrella of stewardship. Rather than discussing the goal of raising money, congregations should discuss money as no more than a means to an end. Money is most meaningful when we can move from thinking of it as a way to pay the bills and regard it as a way to fulfill the ministry of the congregation. . .

Some of today’s healthiest faith communities focus more on stewardship than fundraising. While fundraising refers specifically to money-raising efforts, stewardship is an attitude that is reflected in all of the congregation’s efforts. Fundraising emphasizes the need of the recipient; stewardship addresses people’s spiritual need to give. Stewardship must precede fundraising.

Healthy faith communities see stewardship as a vital component of their ministry. They understand that stewardship is an act of worship. Worship includes the joyful sharing of gifts (aptitude, ability, and money), call (willingness to proclaim the congregation’s spiritual message), and spiritual vocation (willingness to take up volunteer efforts to support the faith community). Note that gifts have a wider meaning than money exchanged for the programs and ministries of a faith community. For example, one’s gift to the faith community might be to serve on the finance committee because one has a good understanding of financial matters. Or a member with landscaping ability might agree to become the caretaker of the memorial garden. All kinds of gifts should be valued and considered meaningful.

Stewardship, then, is the growing, nurturing, promoting, and building of the gifts, call, and spiritual vocation of the members of a faith community. Stewardship is not necessarily the things people do, but the spirit that influences the things they do.”

Creative Capital Campaign Gifts (5 of 5)

Over the last 26 years I have served as a Congregational Stewardship Consultant for the UUA.  During that time I have worked with over 135 of our congregations, some of them more than once.  I have had the opportunity to talk with many people about how they made their decisions to support a capital campaign in their congregation.  One technical note:  Financial commitments to a capital campaign are usually paid over a three year period.  Here are a few of my favorite stories.

These stories are illustrative.  They contain one common element.  Persons with commitment to the vision of the church will find a way to give generously.  Each of these stories involves people who “gave until it felt good.”  And that really is the criterion for our success.  Each pledge is important.  Each person will give according to her or his commitment and will want to feel good about it.
David L. Rickard
UUA Congregational Stewardship Consultant

John had retired several years ago.  He had a small pension in addition to his Social Security payment, enough income for the necessities of life with little room for luxuries.  He gave considerable thought to whether he could make a pledge to the capital campaign.  In the end, he committed to $1,100 to be paid over three years.  His reasoning?  He would set aside a dollar a day to pay the pledge.

Creative Capital Campaign Gifts (4 of 5)

Over the last 26 years I have served as a Congregational Stewardship Consultant for the UUA.  During that time I have worked with over 135 of our congregations, some of them more than once.  I have had the opportunity to talk with many people about how they made their decisions to support a capital campaign in their congregation.  One technical note:  Financial commitments to a capital campaign are usually paid over a three year period.  Here is one of my favorite stories.

These stories are illustrative.  They contain one common element.  Persons with commitment to the vision of the church will find a way to give generously.  Each of these stories involves people who “gave until it felt good.”  And that really is the criterion for our success.  Each pledge is important.  Each person will give according to her or his commitment and will want to feel good about it.
David L. Rickard
UUA Congregational Stewardship Consultant

Sarah was an instructor at a major university.  She felt strongly that the new space and the air conditioning were very necessary for her congregation to grow and serve the needs of the religious liberals in the area.  But her salary barely covered her family’s needs, and her savings were to provide a college education for her daughter.  She, too, found a creative solution.  When the steward visited, she proudly announced that she would give $6,000 to the Building Fund.  The visiting steward, who thought he knew her well, was momentarily stunned until she explained, “This is so important to me that I will teach classes for the next three summers in order to make this pledge.”

 

Look for another story from David Rickard in the coming weeks!