7 Life-Saving Guidelines for Every Pastor

Key point:  The content of your chruch's legal documents really matters. The goal is not to just get approved by the state or the IRS, but rather to create a set of organizing documents that will protect your churtch's 1st Amendment rights and stave off lawsuits.
Starting a church requires faith. No matter how much you prepare, you never feel fully ready or capable. You simply believe, and then you take the step.

Siga leyendo...

Not Just Tithes and Offerings But Also Ecclesiastical Entrepreneurism

Over three years ago, I engaged in a six-month study of the economy that God established for Israel and how the priesthood would prosper.  In the book of Numbers, chapter 18, shortly after setting aside Levi and his sons as the leaders of the priesthood, God gave them duties and by the very performance of those duties they received their provision from the Lord.  However, just before Israel entered the Promised Land God prescribed a new plan of provision.  In Numbers 35 God commanded that forty-eight cities be apportioned to the Levites from among the eleven tribes.  Each city was to have pasturelands that surrounded it.  It is here that we find how the priesthood would not just survive but prosper.   Because they would receive a tithe of the animals and of the grain, it was the priests' responsibility to take that tithe and multiply it on their pasturelands.  It was their way of investing a portion of what was given to them and making it grow.

97% of church money is spent on administrative costs

In today's church environment over 97% of tithes and offerings collected are spent in administrative costs such as salaries and building facilities, and the other 3% usually goes into a savings or low yield CD of some sort.  I am not seeing churches embrace the concept of ecclesiastical entrepreneurism.  It is what the Levites embraced.  And they grew not just in numbers but also in wealth.  The idea behind ecclesiastical entrepreneurism is that a church stewards what has been given to it in the same way that the Levites did.  This concept is found in the Old Testament and also in the New Testament in Matthew 25:14-30.  In this passage three men were each given certain amounts of wealth to manage.  After an unknown period of time, each was called to account for their returns on investment; the only one with which the king was upset was the one who did not multiply it.
Chances are, at the very moment you are reading this article, the dream and vision in your heart is much bigger than your finances.  It is a most common struggle in American ministry today!  Yet, there is an answer that lies closer to you than what you may think:  ecclesiastical entrepreneurism-a concept I would like to develop in the mind of each and every single pastor and Christian leader in America.  Let me give some examples:
Example 1:  Pastor Tom loves to preach every Sunday using illustrations that involve a multimedia experience, whether music and video, PowerPoint, Bible verses on screen, or sermon notes being distributed.  He is able to that because his church uses the services of a video/multimedia company.  Every week Pastor Tom gets the invoice from this company and it is $0.00.  Why is it FREE?  Well, that is because his church owns 100% of the issued shares of the business.  Wow!  Amazing!  It's a real for profit business that the church owns.  In addition, the business pays the church a quarterly dividend of around $12,000.00.  Those dividends are tax free to the church.
Example 2:  When Christian Outreach Church moved into a new facility, they had to hire a cleaning company.  At first, they paid around $1,450.00 per month to keep the church facilities clean and the bathrooms stocked.  Now they don't pay anything!  It's free.  Why?  Because the pastor decided that the church would start a cleaning company, as a church owned business.   The pastor, and church board, appointed a young, energetic couple from the church as the new part-time, and mostly volunteer, CEO and CFO.  With the money that the company received when the church purchased its shares, it was able to print business cards and to purchase minimal cleaning and maintenance equipment.  The church was its first client.  Instead of the church paying the other company, it paid its newly owned business.   Soon the funds in the business began to grow.  The church owned business began to buy new equipment and extend its customer base.  Within two years it was cleaning movie theatres, office buildings and high-end homes.  Now the church gets all of its cleaning for free and enjoys occasional dividends. The young couple now works full time for the company, which has 13 employees, many of which are members of the church.

Opportunity surrounds you

Business opportunities come to your ministry more often than you think.  When you embrace ecclesiastical entrepreneurism as a God-thing, you begin to find that many of the areas of need in your church are the areas where for profit businesses owned by the church will be the solution.   Think of it this way!  If you have to pay for something, why not just pay yourself?  Let me explain.
There are certain costs you will run into on a regular basis that result from ministry vision and growth.  These costs often times force you to scale back.  What if you confront these costs by forming companies that provide your ministry with needed services, and at a cheaper price than the competition?  With the ministry as a client, the business can produce income and continue to expand until it is sustainable even while offering its services to the ministry at no charge.  Here are three things to consider when starting a church owned business:
1.     Rely on the talents of church members:  There are many responsible individuals who would jump at the opportunity to spearhead business ventures for the church.  This gives them a chance to get involved in the ministry and make something out of nothing.
2.      Your best volunteers may become the best entrepreneurs:  One thing that churches and ministries learn quickly when deciding whom to hire is that the best volunteers make the best employees.  The opposite also true, bad volunteers make bad employees regardless of their talent.  When considering who should lead a for profit concern, you must find a leader who is a good volunteer and equally talented.
3.    Seek business opportunities that require minimal investment:  The phrase that says, "it takes money to make money" is not true.  In today's world, there are literally thousands of business opportunities that require little to no money to become successful.  Seek those out first.  Make it a part of your daily routine in prayer to ask the Lord to open your eyes and awaken your mind to the countless opportunities that exist. 

You are called to ecclesiastical entrepreneurism

Your call to lead a ministry requires that you steward the finances and find ways to increase them.  In the parable of the talents, we find that two of the men given talents actually put them to work.  Though the Scripture never tells us if or how the master instructed them regarding what methods to use, it does clearly state they were required to multiply the finances, and that they did so immediately.  Likewise, as you properly use the finances in your ministry, you will find opportunities to multiply them, and your success will attract more success.  One thing is for sure, people flock to glean wisdom and understanding from those who know how to do something well.  That open door greatly increases your opportunities to share the good news of Jesus Christ.  As increased authority, stewardship and overflow become permanent residents in your ministry, you will truly get to know that good stewardship is very rewarding.

Church Momentum Killers

By Raul Rivera

Every pastor struggles with keeping momentum.  It is a fact of life that momentum comes and goes.  However, what I have discovered is that those who succeed the most are the ones who purposefully and endlessly struggle to keep momentum on their side.  I remember the very first time I felt that I lost momentum.  I made a series of bad decisions because I was trying to avoid conflict with a disgruntled church member.  I should have dealt with that person on my own and faced a very uncomfortable situation early before it got out of hand.  Instead, I tried to appease him and it backfired.  While our young church had gained much momentum in its first year, it took a long time to recover from the loss of momentum brought on by that situation and it's effects were felt for a number of months thereafter.  Let me share with you four things that kill momentum.
1.     A Bad Sunday Offering:  Young and small church leaders can experience weekly shifts in momentum based on the Sunday offering.   A good offering, and all is well.  But a bad offering, and we feel like the sky is falling and with it, the whole of our ministry!  I encourage you to resist the perspective of  "financial doom and gloom" over your ministry; keep the momentum by purposefully planning the next stage of growth.
2.     A Disgruntled Church Member:  One effective way to deal with a disgruntled church member is to wave good-bye.  It is a lot easier to maintain momentum waving good-bye to one person that it is to a group.  Pastors tend to overextend themselves trying to reason with someone who most likely will not turn to reason.  A momentum killer is failing to recognize when it's better to release than to reason.  That reminds me of a real momentum killer: the disgruntled church secretary or treasurer.  No one knows more about the inner workings of your church than the church board secretary or the treasurer.  They know where you are strong and where you are weak.  When the secretary or treasurer becomes disgruntled, there is a tendency for the disgruntled and parting secretary/treasurer to make it a part of his/her call to warn others about you.  He/she describes it in the most noble of ways; to keep others from suffering the same loss he/she has suffered at the hands of a bad pastor.  Did you know that one of the most common reasons for IRS inquiries against churches are reports filed by disgruntled church secretaries and treasurers?  Under the rules of section 7611, the IRS is required to inquire on any report by any person that sounds believable.  Talk about losing momentum-imagine having to deal with that!
3.     Repeating a Mistake:  Nothing can take the wind out of your sail more than to make the same mistake twice.   It takes away your momentum because pastors tend to be harder on themselves than they ought.  The Apostle Paul shared great wisdom when he said he purposefully chose to no longer focus on the past but rather, press on towards the prize of the high calling.  We would do well to remember the same.  That is not easy to do.  It is difficult to let mistakes go, especially when you realize that it is the second or third time committing the same mistake.
4.     Noticing that there are many pastors more successful than you:  No matter how large or successful your ministry becomes, you will always find someone more successful than you.  Reason being, success is a matter of perception (Pr. 13:7).   It is very good to rejoice over someone else's success.  But it is always fatal to believe he/she has succeeded because he/she is better than you.  This type of thinking takes away all momentum.    

Fight the good fight

Keeping your momentum is a battle worth fighting.  If you find yourself struggling with any of the above mentioned momentum killers, perhaps it is time to tweak what you are focusing on.  God's voice of encouragement reminds us that we are to fix our eyes on the Author and Perfector of our faith; He who calls you is Faithful.  When our eyes are appropriately focused on God, we find all else comes into its proper allignment.

Three Common Mistakes Made When Launching a Church

By Raul Rivera

The other day I was talking with a pastor from Chicago who was experiencing some personal trouble with his tax return because he reported his housing allowance incorrectly.   The IRS had reviewed his taxes and asked him to substantiate the reported housing allowance on his schedule C.

Church Issued a 1099

When the pastor went to do his taxes in 2007, he did them as he had always done them.  He reported all of the income he made at the church on schedule C, because the church issued him a 1099-Misc instead of a W-2.  To make matters more complicated the church reported $74,000.00 of income on box seven, which forced him to report his housing allowance of $39,000.00 as a business deduction.
Everything seemed OK, until he got a letter asking him to substantiate the housing allowance.  He sent to the IRS a copy of all of his home expenses, but unfortunately, that was not enough.  Next, the IRS asked for official minutes designating the housing allowance.  He was not able to find them.  Without the official minutes, the housing allowance is not of any value to the pastor.

How the IRS wiped clean the church account

Let's go back 9 years in time.  When the pastor started the church, he had $50.00 to his name.  His vision, as it is today, was to win the lost, preach the Word with zeal, and teach people to obey all of God's commands.  Though to this day he has been faithful to the vision that God gave him, the steps he took to establish the church on its legal foundation were lacking in strategy.  The following rundown of his church's legal inception shows you what I mean.
After picking out a name, he opened a checking account for the church.  He did this without incorporating or applying for a tax ID number.  Lacking a Tax ID number, he used his social security number to open the account.  The church got off to a good start and did fairly well.  In fact, the church reached almost 200 members and had a weekly average of 175 in attendance.
In late 2008, when he was not able to substantiate the housing allowance, the IRS assessed a tax, with penalties and interest, to the tune of $9,875.00.  He was saddened and decided that the only way to fix the problem was to go into a payment plan.  That put him in a real difficult position and about 7 months later he began to miss payments.  The IRS computers sent letter after letter to him until they sent him one that said they would search for assets and put liens on them.
 When the IRS system did searches of bank accounts it found the church's checking account with his social security number and it wiped it clean.  Well, it wiped out over $10,000.00 from the church checking account.

The grief that simple mistakes can cause

It is always the little things that cause churches the greatest grief.  Scripture reminds us that it is the little foxes that ruin the vineyards (Song of Solomon 2:15).  One simple oversight here and there can add up.  Let's review the mistakes that his church made and how they could have been avoided.
Mistake #1:  The church checking account was opened before they incorporated and got a tax ID.  Never open the church checking account with your social security number.  The IRS will see the bank account as a DBA of you personally and have access to it when it comes to your personal taxes.  You should first incorporate, get a tax ID number and then open the church checking account as a corporation, using its own Tax ID number.  I am certain that many of you reading this are swallowing hard right now realizing you made the same mistake.
Mistake #2:  The church issued the pastor a 1099-Misc.  Though a lot of churches do that, it is not correct.  The church should have issued him a W-2 reporting $35,000.00 in box 1 and $39,000.00 in box 14.
Mistake #3:  The church assumed that the housing allowance was something that was paid, and called housing allowance, but not actually designated in minutes at an official board meeting.

How is the pastor's church doing?

Thankfully, his church felt the initial sting, but it recovered.  It canceled some outreach events, and pulled back on some repairs that were needed.  He learned the lesson of getting a good start.  Starting is not just preaching and getting numbers.  It is also planting a church on a solid foundation by paying careful attention to the details.  As a rule, when in doubt, ask for help and when certain, you are probably wrong.  Help always comes to you...if you are willing to find it.

The Race is Long; Avoid Burnout

By Raul Rivera
It had only been a year and a half from the day I started my church and already, I was feeling burned out.  I thought it would be bigger and better established.  I took it for granted that the congregation would be more dedicated and involved in outreach efforts.  All of my energy was quickly dying and I did not know how to get it back.  Ever been there?  Maybe you are there now.  Let me give you three things that will help you avoid burnout.
1.    Unmanaged expectations:  Many leaders that start churches have an unstated idea of what their church should look like in its first year.  When that idea is not achieved, it can lead to the perception of failure.  Let me give you an example.

In most of the conversations I have with church planters, they usually describe a vision that is complicated, multifaceted and elaborate.  In fact, it looks a lot like the one they perceived from their former pastor.  While I always encourage big dreams, they must be well managed and understood.  Not every church is supposed to grow to reach 1,000 people. However, if you expect to be a church of 1,000 people and you only grow to 300, you will always feel like you failed.  But those who never expected to reach 300 will feel like they have conquered the world if they reach 300. 

2.    Preaching without purpose:  When I first started in ministry, the average length of my sermons was about 1 hour.  As I matured, the sermons were more like 30 minutes.  In the early years, I prepared as though the end of the world was here, and that the sermon I was preaching was probably mine and the congregation's last.  I soon learned that there was always another Sunday and that very likely, the congregation could not remember what I talked about the week before. 

As a preacher, I would get bothered when I asked the question, "How many remember what the message was about last week?" and only one out of one hundred would raise their hand.  This was troubling to me because I equated remembering the message with dedication, and seriousness about the things of God.  But I never considered that maybe my sermons weren't as impacting and worth remembering as I thought they were.  Is there a solution?  Be encouraged, I found one.  Let me give you what will make preaching more effective and easier to do week after week and avoid preaching burnout.

a.     Preach in series:  You should take some time and pick topics you can cover over 4 to 6 weeks.  That means that every year you pick between nine and twelve topics and then prepare them to be covered in a series.

b.     Less than 30 minutes:  As a preacher the hardest thing to do is to discipline yourself to cover your entire message in under 30 minutes.  This will force you to stay on topic and keep the congregation's attention.  Avoid the temptation of rabbit trails because, like it or not, the fact is that on Sunday morning, you will probably be able to effectively hold their attention for about 25 minutes.  When you train yourself to boil a message down to a more "concentrated" version, you will find that people track with you better, because they feel that every point says something vital.

c.      Stick to your plan:  If you select your sermon series in advance, you will be able to research, develop and better prepare your messages.  You will also be able to publish the upcoming series four weeks in advance on the church website, bulletins and other printed materials by using mail marketing.  One good way to advertise your church is to get a nonprofit mailing permit and then send postcard advertisements of upcoming sermon series to thousands of households within 30 minutes drive of your church.  I am certain it will draw new people to visit your church.

3.     Not paying attention to the things that keep you awake at night:  For some people, dealing with the hardest issues only happens at night when their heads touch the pillow.   What are the things you think about at night?  If you are typical, you probably think of things that you secretly worry about, but rarely tell anyone.  I often get a chance to hear many of those concerns.  Let me give you a short list

a.     You think about growing but don't know how:  How do you grow a church?  After 2 years, you are beginning to realize that people won't come to your church because you have great services.    There has to be something more yet you do not know what to do and you are running out of ideas.  That is a sign that you are burning out.

b.     You worry about finances: You got into a building and the rent is killing you.  You thought that the building would attract more people, but the opposite has happened, or maybe new people have come but the rent is more than you can really afford and there are times when you pay from your own pocket to meet the shortfall.

c.      You worry about the IRS and the books of the church:  Not only do you think about the church and how to make it grow, but you also worry about the books and management of its resources.   Is there something I should know that I do not know?  Am I properly reporting love offerings?  What about forms that need to be turned in to the IRS?  Every January you make the pledge to get it right, but my March, you surrender to the busyness of ministry and life and then you suppress the voice that whispers to you at night that reminds you to get them right.

Let's review

We covered three things that may cause burnout.  They are 1) unmanaged expectations, 2) preaching without purpose and, 3) not paying attention to the things that keep you awake at night.
The third one is probably the one that preachers pint to least when it comes to burnout, but I dare say that it is probably the greatest creator of unidentifiable stress.  In each man is a deep desire to quietly enjoy the fruit of their labor.  When certain aspects of that labor keep you up at night, it won't matter too much if you accomplish what you set out to do.
Why not make this year on that you will look at the things that keep you and deal with them.  Make it a goal that by December, the church's finances, policies and IRS compliance issues will be properly dealt with and taken to a new level of excellence so that you will no longer spend any sleepless nights wondering what could happen if the IRS knocked at your church's door.

Big Vision, Small Checking Account

By Raul Rivera

How Big Are Your Dreams?

Sometimes, the vision of a pastor's heart is greater than what the church's finances can provide.  A big vision is wonderful, yet when you add a lack of finances to the mix it can lead to a discouraged heart.  If you ever become discouraged in this way, I challenge you to assess the condition of your heart!  Scripture teaches us in Proverbs 13:12 that hope deferred makes the heart sick (NIV). Is your heart sick? Do you feel like you have been waiting and waiting and still there is no answer? I have had too many conversations with ministers who are notably discouraged because of a lack of finances, even though their conversation does not admit to it.  As mentioned earlier, the condition of your heart may be a bigger challenge to overcome than the church's small budget. Later on in this article, I will share ideas on how to increase church finances, but first let's talk about your heart.  Philippians 2:14-15 says, "Do everything without complaining or arguing, so that you may become blameless and pure." (NIV) The act of being blameless is not limited to us being found without fault; it also means that we are not blaming God for the financial inadequacies of our church/ministry. It is easy to outwardly proclaim our faith in God to provide for our finances, but the battle raging inside our hearts may look much different. Many pastors secretly blame God and hold offense because their ministries do not grow according to their own vision.  How can we fix that?

My Personal Experience

I am writing today out of my own personal experiences. I have been offended before at the Lord for the church's inadequate finances. I labored for several years before going on a full-time salary. It was not until heart issues of trust and offense were settled, that all of my plans and hard work began to produce fruit.  Once the issues were resolved, in the first six months the church grew from 25 to 125 members and the finances grew by over 125%.  Moreover, supernatural provision blessed our ministry to the degree that we began a long series of outreach programs that ministered to thousands and thousands of people.
As a pastor there are four goals that need to be established early with real efforts being made to meet them.  They are as follows:

1. Full-time ministry for the pastor
2. Create a financial business plan for the church
3. Acquire a building that produces income
4. Run the business side of church as a business to produce real income for the church

These four priorities are essential.  Though they will take years to accomplish, they are necessary for creating a thriving ministry.  Let me give a brief explanation of each goal.
Full-Time Ministry for the Pastor:  Let's face it, increasing your church's income is necessary for you to become a full-time salaried pastor. In my 18 years of ministry experience, I have witnessed the major difference in efficacy between churches that have pastors on full-time salary and those who do not. The dilemma we run into when pastors are working outside jobs is that their hearts feel divided, and the amount of energy and time they can give is limited. It is during these times that a pastor needs to fight with everything within to keep his/her heart un-offended.  I am not saying that a duly employed minister is a bad thing.  Every church has its humble beginnings, and the Lord uses these meager times to test our hearts.  Your response determines your future.
Acquire a Building That Produces Income:  Acquiring a building is always more expensive than you think.  As a general rule, you will probably spend 2.5 times more than you initially budgeted.  Do not fall into the trap of moving into a building too early.  For many, moving into a new building is the beginning of the end.  The expenses usually end up draining the budget more than expected; leaving no room for the usual ups and downs of church finances.
When looking for a building, you must do three things:

1. Begin saving for it now:  The best scenario is to save for two years.  The soft costs of moving in are always more expensive than the usual rent and predictable expenses.  Soft costs are the costs of building out, sound systems, permits, licenses, technology, and decorations.  It is essential that you have six months of operating cash left in the bank after you move in.  Believe me, this will save your ministry in the long run.
2. Get a building that is big enough to generate income:  When looking for a building, get one big enough to use for business purposes such as a daycare, after-school care, or grant-based social service programs.  Perhaps you can use it for a business that pays taxes, such as a sublease, or a church controlled C-Corporation that earns income.
3. Spend extra time and money on your bathrooms and entrances:  Most churches have nice entrances and attractive sanctuaries, but terrible bathrooms!  Do not ignore the bathrooms.  Unattractive bathrooms will chase away newcomers faster than anything else.  Think about moms with babies and changing diapers.  You get the point!  People will remember a negative bathroom experience more than they will your message.  Don't plan on visitors returning if you have bad bathrooms.

Create a Financial Business Plan For the Church:  If there is one area where most churches are weak, it is in keeping up with business responsibilities.  Most church business plans consist of depending solely on tithes and offerings.  The hope of most pastors is that new members with financial strength will join the church and increase giving.  Unfortunately, that rarely happens.  What if the church developed a plan to generate real income through legitimate businesses owned by the church?  What if the church created a plan to save cash over a period of time and invested it into a real income producing business?  What if the profits were enough to pay for excellent facilities for the church, which in turn produced income, too?
Run the Business Side of Your Church as a Business to Produce Real Income For the Church:  For some reason, many pastors ignore the financial aspect of ministry.  Perhaps it is the fear of having to manage money, even if it is just a little.  In fact, the less money there is, the more emotional pastors become.  They often fight feelings of inadequacy or loneliness.  For others, they simply have never had experience with business and so running the business side of the church feels very foreign to them.  I do not know of one Bible college that teaches entreprenurial skills to pastors.  Like it or not, today's pastor not only shepherds the flock, but is also a CEO and business leader.
As with any business, taxes are always the biggest expense you will incur.  Churches and ministries face increased exposure to tax laws due to changing laws and regulations.  If the IRS or state were to audit your church, will they find proper records and documentation?  Did you know that over 83 percent of churches suffer from noncompliance issues?  In August of 2009, the IRS published final regulation on section 7611 in the Federal Registry .  The proposed changes in the regulation are set to restore the IRS' ability to audit churches.  With penalties that range from hundreds of dollars to thousands of dollars, the IRS has a financial motive to engage in church and ministry audits.

A Final Word of Encouragement

Falling in love with God's call on your life is a very important part of the process of growth.  When you are in love, time invested and size of ministry no longer matter as much as your relationship and understanding of His heart toward you.  Sure, we would all like to have larger ministries!  That is nice, but it will never satisfy like you think, and more ministers end up spiritually bankrupt because they seek masses with more vigor than seeking His presence.  At the cost of intimacy with God....THAT is too high a price to pay for anything. (Lord, rescue us from what we think we need, and in Your kindness, give us what You know we have grace to steward.)

My Sunday Message and the Constructive Receipt Doctrine

By Raul Rivera
Have you ever felt impressed by the Lord to prepare a certain message that you know will have a major impact on the congregation? Well, let me tell you my experience about just such a message. I spent many hours preparing for a particular message on redemption. As I studied Scripture and went over the main points of the message, I could not get a release from the Lord. More study and meditation was required of me until finally, after three days and over 12 hours of my time invested, I felt like it was the "best message ever." In my mind it was going to be great... step aside, Mr. Jakes...this message is going to be great!

Sunday Morning

As Sunday approached, the excitement level in my heart was at an all time high. I could not remember a time when I was so excited to share a message. As soon as praise and worship ended, announcements were given, and the offering was over, I took the pulpit and began to deliver my message. I shared how God redeems by forgiving, restoring and lifting up.  I was feeling it as I shared it. In fact, I knew that if I was not the preacher, but instead a congregant that day, I would have likely responded to the altar call. Closing the message, I made the call, "Anyone whose life is battered and in need of redemption for their souls, please come to the altar and I will pray for you." To my dismay, not one person responded. To no avail, I tried to help the Holy Ghost, by making the call a second time. The response was nothing, nada....all you could hear were the sound of crickets.

My great excitement and anticipation of a world-changing message with an anointed altar call turned into indignation and depression. I closed the message and ended the service by dismissing everyone. There was the typical shaking of hands, and as is true to the Spanish culture, hugs and kisses.

How one man's life changed

As the sanctuary was emptying, one man approached me with tears in his eyes. He was noticeably moved at an emotional and spiritual level. He held me tight in his arms and I felt the trembling caused by his sobs. "Pastor, thank you for that word. I was about to quit coming to church and go back to my life of drinking and fighting. I never got a chance to say goodbye to my father or hear one affirming word from him before he passed. Your message reminded me that I have a Father in heaven who affirms me. Now, I have nothing to fear."

The economic benefit doctrine

The man left my presence but shortly returned and handed me an envelope. In it was a note that simply read "thank you." With the note were three crisp 100 dollar bills. I was blessed. But then repented for being upset earlier. I had a revelation that my 12 hours of message preparation were for one man. Talk about leaving the 99 and going for the one. Now for the million dollar question..."Is the $300 offering taxable? Should I report it on my tax return?"

The definition of a minister

The answer lies in two sections of the IRS code and income tax regulation 1.45. section 3401(a)(9), which defines a minister as a self-employed individual performing religious services for remuneration (compensation). Moreover, section 61 defines gross income for tax purposes as "all income from whatever source derived." Because a minister's livelihood comes from the preaching and teaching of the Word, any income he or she receives from it is taxable even if it does not come from an officially established church or ministry. You see, the man that gave me the $300 was motivated to do so because of a religious service I rendered unto him. Therefore, the tax code and the constructive receipt doctrine made it taxable.

What is the constructive receipt doctrine?

You may have thought when you read the title that the constructive receipt doctrine was a new biblical concept or something similar. Unfortunately, it is a legal doctrine used to determine when income is taxable and when it is not. In my case, as the preacher of a message, the constructive receipt doctrine kicked in as soon as the context of the reason for which the man gave me the offering established two things:.

1. He was motivated to give because of a service I performed as a minister.
2. I had unfettered command of the money and;
3. I was free to enjoy it at my own option.

I never cease to be amazed at the far-reaching arm of Congress to ensure that all income-producing activities fall under some tax code or regulation. Nevertheless, the law is the law and a minister is under a legal and moral obligation to include such love offerings on his or her personal income tax returns.  There are numerous other scenarios that play out every Sunday which make many transactions taxable, while at the same time there are numbers of strategies that exist to channel love offerings properly in order to reduce their taxability, if not eliminate taxes altogether.

How to do it right

At all of our conferences we teach the proper way to receive a love offering and report it on a tax return, and we explain how to keep it almost entirely tax free. This and other valuable information is thoroughly covered in our Church Compliance and Ministry Empowerment seminar and there has never been a better time to register than now.  To help you and your ministry learn all you can about this and other critical topics, for the month of August we are offering our register-one-person-get-one-person-free promotion. Take advantage of the offer today and start the journey that will help move your church to the next level. Blessings to you!