Developing a Culture of Honor

What Is Honor?

Honor means “to hold in high esteem, to regard with great respect, to revere”.
When it comes to being a follower of Christ, honor is a fact and way of life. Honor is a lifestyle of stopping to embrace the people and places that surround your life.  Yet, so often in ministry, honor sometimes seems elusive.
How are we supposed to honor the people and places in which we live?  If the Chief of Police enters into your church service...how would you honor them?  How about a judge or a military person?
As pastors and ministry leaders, the truth is, we are called to show honor to all those around us. Sometimes, it’s a blessing for us because we are giving what we have never received ourselves.
Many church planters haven been “dis-honored” by others. Either from their pastor,  friends, or co-laborers with Christ. And so honoring isn’t at the top of our list.  But, one great aspect of “christ-likeness” is the ability to show honor to others...to hold them in high esteem...to show them high regard...to stop and embrace them for who and what they represent in our lives.
Yet, honor is not always easy. Given to ourselves, we can naturally deteriorate into selfishness. Just watch any group of children play and you’ll quickly see that preferring one another doesn’t come naturally. “Mine...Me first!” quickly becomes the prevailing attitude!
Many Pastors want to be honored but have yet to model that before their congregation.
The truth is, honor has to be cultivated. Honor doesn’t happen by accident but is the result of intentionally living out a vision to lift up those around us.

Truths About Honor

Honor is CULTIVATED

Honor doesn’t happen by accident. It happens as the result of an intentional pastor or leader that decides to sow the seeds of honor in how they serve our ministries to how they treat their ministers. The honor level in your church is a direct reflection of the level of honor we have modeled as pastors.
In the church I grew up in, our pastor was amazing at honoring. He made sure that when a woman walked off the stage, an usher arose to hold her hand as she came down. If she walked out the door, we held the door open. If we had food, the women were allowed to go first. If we talked about our wives, we tried to lift them up. As a result, women were highly honored in our church. They felt loved, respected and highly esteemed. And it showed in their countenance. It was evident that this culture of honor was cultivated. It was the direct result of an intentional vision.
Let me ask your a question.   If someone was to ask one of your church members: Describe the culture of your church.  Would they say “Honoring”?  If not, perhaps we need to start cultivating it by sowing some seeds of honor.

Honor is MANDATED

The bible has a lot to say on the subject of honor! In fact, the bible calls us to live a lifestyle of honor.
Romans 13:7 (NKJV) “Render therefore to all their due...honor to whom honor.”
1 Peter 2:17 (NKJV) “Honor all people...”
We are called to live a lifestyle of honoring people, of highly regarding those around us. Often, as pastors, we take pride in being Word based, but when it comes to our cultivating a culture of honor, have we embraced the Word’s call?

Honor is CELEBRATED

Here’s a great truth about honor: Whether it is in your family, business or church, wherever there is a culture of honor present, joy is always there.
The reason is, a culture of honor releases people to celebrate each other.
Honor looks like… pointing out people’s strength, not their weaknesses.
Honor looks like… celebrating people’s wins, not their failures.
Honor looks like… seeing people’s future, not just their past.
Do you want joy in your family, business or church? Sow the seeds of honor and watch out for a harvest of joy!
How do we begin to cultivate a culture of honor?

3 Steps To Develop a Culture of Honor

Honor the PEOPLE you serve with

From the usher and greeter to the children’s worker and worship leader, the church is the people. And if we are honest, it takes a whole lot of them to make our churches and ministries succeed.
Usually, because of the pace of ministry, we can often forget the unsung heroes that walk the halls of our churches.
But, what if you change that now? What if this weekend you began to sing the songs of the heroes down the hall? What if we decided this weekend, is a weekend of honor?
Think about your church for a moment, or your ministry...
Who could you honor this weekend?  The faithful usher? The wise board member? The single mother who serves so faithfully?
This could be the beginning of developing a culture of honor!

Honor the PLACES you serve in

One thing I love about being a church planter is the sense of being called...of waking up every day with the understanding that you are called to help reach the city in which you live. There are few things that compare to living for a vision.
Outside the walls of your ministry or church are thousands of people who are serving the city that you are called to love!
It could be the Police Chief, the EMT’s, the judges, or any number of the people serving your city. But they are there. They are serving the hurting, the dirty and the dying. They are making a difference in the lives of the people God has called you to pastor.
What could your ministry do to honor them?
What could you do let them know they are highly esteemed in the eyes of your church and that you are glad they are in this city with you?
This step could open doors like never before!

Honor the MINISTRIES you serve near

No church is an island. Your city has within it other believers, brothers, sisters and ministries who are co-laboring with you...although they are on the other side of town.
These men and women represent God’s deep devotion to reaching everyone in your city for Christ.
How could you honor what God is doing through them? What would happen if you were somehow able to honor those fellow laborers in your vineyard?
In this era of so much division in the body of Christ, what if your church started to swing the tide of division to a place of unity by honoring those who are called to win the same ground you are fighting for?
Honor can change the atmosphere of your church and your city. I want to encourage you to look for ways to honor. We must cultivate a culture of honor and expect a great harvest!

How to Conduct a Board Meeting

It is probable that the most frustrating thing a church secretary has to do is take board meeting minutes.  In my conversations with many "minute takers," the most common question I get is, "What should I write down?"  Is not that one of your primary concerns?  What if you miss something?  What does the law require?  Should you keep your notes?  Can you record the meetings?  If so, do you keep the recordings after the minutes have been taken?  The list of questions goes on and on.  Let me put to rest some of the concerns and anxieties that you may have.

What is a board meeting?

For the purposes of this lesson, a board meeting is the gathering of the group of people in the ministry who are responsible for the direction of the organization and whose vote and decisions are legally binding upon the corporation (ministry).  In your ministry, that could be the board members, trustees, elders, senior leadership team or members.

How do I know who is really the board of my ministry?

The group of people legally responsible for the decisions of the ministry are usually set in the articles of incorporation or the constitution and bylaws.  A common mistake made by churches and ministries is that board members are often times removed and added in a way that is inconsistent with what the articles of incorporation allow.  This can have serious consequences because a person that is incorrectly removed from the board can have a legal claim against the ministry and cause grief.  So, how can one be sure of their board?  Let me explain below.

Conduct a historical audit of your minutes

One thing you should do is to audit your minutes. Why not take a moment and gather all of your church's minutes from the past, since inception.  Now, write down the name of each of your current board members on a list. Then, write down the names of your past board members.  You should have two lists.

First, look at the list of your current board members and then look through your past minutes and answer the questions below.

Is it documented in the minutes that:
the church kept the provisions of the articles of incorporation and constitution and bylaws in inviting each board member to serve?
each board member agreed in writing to serve on the board?
each board member's vote on the board has equal power among all the other votes on the board?
each board member signed a conflict of interest statement each year?

Now look at the list of the past board members and then look through your minutes taken in the past and follow the instructions below.
In addition to the list above, is it documented in the minutes that:
each past board member either resigned or was properly removed from the board in accordance to the articles of incorporation and constitution and bylaws?

How did you do?  Do you have a mess?  If you do, do not worry, there is hope.  In my experience, this issue can be fixed.  We will talk about that later

Minutes step-by-step

So, you have a board meeting coming up and you want the minutes to be perfect, but honestly, you are not sure that you know how to take minutes properly.  After all, state law requires that minutes be taken at every board meeting and the IRS may fine your church and board members if the minutes fail to properly document decisions as rehired by section 4958.  What does a church secretary do to ensure that the board meeting is properly called and documented?

The steps below will help you.

1. Prepare an agenda: An agenda is a list of items to be discussed and considered at the board meeting.  Make sure you follow the proper format.  The format should have an opening, prayer, reading of the minutes from the previous board meeting, old business, new business, officer reports, open floor and closing.  
2. Send a notice:  State law requires your ministry to comply with proper notice requirements.  The notice must contain the date, time and location that a board meeting will take place.  We recommend that you make every effort to send the notice at least 10 days in advance of the board meeting to give each board member enough time to prepare, and the necessary plans to attend.  The notice should be sent by mail or email. If your bylaws allow, you can also post it in a conspicuous location in the church. When you send the notice, you should also attach a copy of the agenda and a copy of the minutes from the previous board meeting.  
3. Take notes:  Note taking is probably the most difficult thing about a board meeting.  What should one write?  How much should one document?  To make it easier, the minute taker should have a note taking form, like the one that the Compliance Kit creates for you, that is based on the agenda.  At a minimum you should document minimal discussions, followed by a motion made to vote on the matter and who seconds the motion.  Now, you document who votes yes and who votes no.  If the majority of the votes are yes, then the item is passed; if the majority vote no, then it does not pass.  I cannot stress how important it is to take good notes by allowing yourself to be guided by a good note taking form.  If your bylaws allow, I recommend that you record the board meeting in audio format.  It will be helpful, if you need to hear a certain portion again.  
4. Convert the notes to minutes:  Here is where your note taking form will shine.  If you properly used it, all you have to do is convert the notes to a formal set of minutes.  Each item on the agenda must have a discussion, a motion duly made, followed by who voted yes and who voted no and whether there were enough votes to pass the motion.  
5. Signatures:  One confusing aspect about approving minutes if that the minutes you write for today's board meeting are not approved until the next board meeting.  That means that at each board meeting, the board votes to approve the previous minutes.  It is important that once the minuets are approved they be signed by at least two officers.  I recommend that they be signed by the president and secretary.  
6. Corporate seal:  Aha!  The corporate seal.  Why have one?  First of all, state law requires corporations to have a corporate seal.  Secondly, the corporate seal serves to show that the content of a signed document is an act and deed of the ministry, as opposed to one that is merely signed by a director.  A signature without a seal can be interpreted to be an act carried out on behalf of the ministry by its officers or directors.  The seal makes it clear that you did not sign in your personal behalf, but rather as an act of the corporation (ministry).  It keeps you from being held personally liable for the consequences of an act of the ministry.

Practice makes perfect

I encourage you to take time to practice taking minutes.  Invest time and money in getting the knowledge you need to protect the ministry God has entrusted into your hands.  Use the Compliance Kit software program or attend one of our conferences.  You will be glad that you did.  We guarantee it.

What's Really In Your Bylaws

As June approaches, now is the time to consider if your church's bylaws are up to date. I always stand amazed at the number of churches that allow years to pass by without updating their bylaws. That is what happened to a church in South Carolina. The church had been around for many years and their bylaws had not been read or even seen in many years. The church's decisions were made by the pastor with the aid of the board of directors. However, there was one problem. The bylaws they adopted 18 years earlier called for a voting membership. The bylaws specifically stated that every two years the congregation would vote as to whether they could keep their pastor. The bylaws also called for the membership to vote on the church budget, salaries and the removal and addition of board members.
Over the years, the church ceased to follow their bylaws. In fact the pastor was the chief decision maker and with the aid of his board, set and approved the church budget, salaries and appointed and removed board members. Claiming a scriptural form of government, they have been running this way for several years.

Do you know what's in your bylaws?

It is a fair question to ask you if you know what is in your church's bylaws. Have you gone over them carefully to know what is your authority as the pastor? How about the board of directors? Have you considered if the current bylaws are legally the correct ones? While doing nonprofit compliance audits of churches, I have discovered many pastors who do not know what is in their bylaws. As a result, they usually make decisions based on rules they adopt that have no legal standing. They do not know that not only is their tax exempt status in jeopardy, but so is their ministry. I will explain later!

Are your bylaws yours?

Another area where churches make mistakes is using bylaws they believe are theirs without a paper trail to substantiate that the bylaws have been adopted properly. This often happens when the church decides to replace or amend their former bylaws. Many times a church decides that they need to rewrite their bylaws. The church schedules a board meeting, and they adopt a new version without considering the amendment clause of the old bylaws. The consequences to this action can be serious, because courts have ruled on cases where churches violated their own bylaws in adopting new ones.

Three clauses that need to be in your bylaws.

The bylaws of your church is considered the governing document. While there are many provisions that must be in your bylaws, there are three in particular that you need to consider.

1. Ushers Responsibilities: Because many churches encounter disruptive individuals in services, ushers need to know that they are usually the first responders to this type of behavior. What should their response be? Having a clause in your church bylaws that dictates an usher's responsibilities during a worship service can be useful in legally protecting him/her should an occasion arise in which they need to deal with a disruptive person. Such was the case with a church in Kansas. A woman entered the church yelling at the pastor that he was maligning her name. She also yelled at the church members that they should leave the church. After many attempts to calm her she only became more belligerent.  When it looked like she was going to become violent an usher, trained in the military, performed a restraining maneuver on her that caused her pain for only a short moment. He released her when she promised to leave in peace. She did leave, but she sued in court for pain and suffering.  The court threw out her case claiming (among other reasons) she had no case because the church's bylaws ordered the ushers to maintain "a worshipful atmosphere in the church," and to "take care of any disruption or emergency situation during services."
2. Pastoral Vision: How the pastor cast vision for the church? I have heard many pastor casting vision from the pulpit. "We will start x number of new churches in the next 5 years . . . We will be a church that reaches into all the world . . . we will be a church that will train and equip ministers of the gospel and send into all the world." Sound familiar? The problem with this is that the vision does not have a road map that gets the church to where the pastor says its going. In order to make this happen there should be an clause in the bylaws that charges the pastor with writing the vision and making it plain as found in the book of Habakuk. The Pastoral Vision clause should require that the pastor set the policies and procedures that empower the staff, ushers and volunteers to make necessary decisions that reflect the pastor's vision but do not burden him/her with certain day-to-day matters that distract from the bigger picture.
3. Removing a Member: When a church member publicly or privately and without repentance lives a lifestyle that is contrary to Scripture, the time may come for the church to have that member removed.  The procedure used must be exactly as described in the bylaws.  Did you know that the largest source of church disputes concerns such matters and the provisions of the bylaws regarding how this is handled? Never assume that a church member living in unrepentant sin will go down quietly.  You may not even have a procedure for removal, which means you may not even be allowed to remove a member once he/she has been added to membership.  If that provision is missing, you need to amend the bylaws.

Why You Should Get 501(c)(3) Status Before the Year Ends

When it comes to getting good information on the topic of 501(c)(3) status for churches and ministries, the Internet leads the way in creating confusion.  It seems that just about everyone has an opinion that is either in favor or opposition to it.  One would imagine with so much written about the subject that finding good information would be a walk in the park.

What is 501(c)(3)?

So, what exactly is 501(c)(3) status? Why is there so much talk about it?  501(c)(3) is actually a section of the tax code that is part of the greater section 501 that lists who qualifies to receive tax exempt status, and it includes churches, ministries, schools, hospitals and other organizations.  The (c)(3) part of section 501 lists the requirements that need to be met in order for an organization to be tax exempt.  Are you certain that your ministry operates in a manner that is consistent with the requirements of section 501(c)(3)?  I often hear people say that they believe a church should never get 501(c)(3) status and they even encourage others to either not apply or to turn theirs in.  This belief comes from a fundamental misunderstanding of the law and how it applies to churches.  They are under the false impression that applying for 501(c)(3) status will make their church or ministry subject to the IRS.  It is a matter of settled law that churches and ministries are subject to IRS regulation even in the absence of specific recognition of 501(c)(3) status.  It is cemented by recent court rulings such as JACK LANE TAYLOR, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, and BRANCH MINISTRIES, INC. Petitioner v. CHARLES O. ROSSOTTI.  These two cases establish two things.

1. That there is no provision in the law that grants a church immunity from meeting the requirements of section 501(c)(3) if that church or ministry wants to be tax exempt.  
2. The presumption of tax exempt status does not exist unless the church has been officially recognized by the IRS to meet the requirements of section 501(c)(3). I will explain this one later.

But does that regulation mean that the IRS can invade your church's freedom of religion, speech and doctrinal teachings?  The answer is, "Absolutely NOT."  In fact, there is no law or regulation in existence that limits what ministers can preach from the pulpit.   Even more so, the courts have upheld the church's right to free speech from the pulpit even when the IRS has attempted to regulate it. Despite these facts there are some groups that teach the contrary by saying that any church that gets 501(c)(3) status must sign a waiver to forfeit their 1st Amendment Freedom of Speech rights.  At best, they are mislead and at worst, flat out dishonest.

Three compelling reasons to get it before the year ends

There are many good reasons to get 501(c)(3) status.  They range from getting preferred postage rates, property tax exemptions, and the ability to apply for sales tax exemption to enabling you to qualify for many grants.
While these benefits are great to have, let me share three compelling reasons to get 501(c)(3) status before the year ends.

1. Donors who want to give large gifts will ask for it:  I have always preached that the biggest part of receiving a blessing is being ready for it when it comes.  As the end of the year approaches, high net worth individuals look for places to make large contributions.  Because of the size of the contribution, they want to be sure that their contribution will be tax deductible.  Without the 501(c)(3) you cannot guarantee them that it will be.  As promised earlier, here is the further explanation tax how tax exempt status cannot be presumed without official tax exempt status.  In the case, Branch Ministries v. Rossotti, the court ruled that while a church does not have to apply for 501(c)(3) status in order to be tax exempt, the presumption cannot be established unless the IRS gives a ruling that the church meets all of the 501(c)(3) criteria.  So what does this mean?  The court elaborated by saying that when a taxpayer makes a contribution to a church that has not received 501(c)(3) status, the taxpayer has the burden of proof on him/her to establish before the IRS that the church in fact meets all of the 501(c)(3) criteria.  When the IRS audits a taxpayer's tax return, it looks at the contributions to the church and checks in publication 78 to verify if the church has 501(c)(3) status.  If the church does not appear in that publication, then the taxpayer will have to prove that the church meets all of the 501(c)(3) criteria.  This "burden of proof" that is placed on the taxpayer will discourage high net worth individuals from giving to your church.
    
2. Increased reporting requirement:  The application for 501(c)(3) status requires you to list all of your past, present and future activities.  Therefore, the longer you wait, the more history you will have to report. 
3. The IRS fee may go up:   Internal Revenue manual 1.32.19.5.3 requires the IRS to review and update their fees every two years.  The last time it reviewed it's fees was in 2009 and they went up.  The user fees assessed by the IRS are calculated by the costs incurred by the exempt organizations unit to process the form.  While it is possible that the fee may stay the same it is more likely that it will go up.  I have never seen an instance in which it has gone down.

Is one 501(c)(3) better than another?

As you consider your options on the 501(c)(3), keep in mind that the 501(c)(3) is your public record.  It is of utmost importance that your public record accurately reflect your heart, vision, doctrines and most of all contain provisions that protect you from certain public policies that are contrary to God's Word.  Never buy into the concept of quick and easy 501(c)(3) status.  There are groups that teach and promote keeping the 501(c)(3) application simple by taking a cookie cutter approach to getting approved and then making changes to your bylaws and other important corporate documents.  This is not only deceptive, but it is harmful to your ministry because more often than not the changes are not made and even if they are, IRS letter 947 requires your church to submit those changes for further reconsideration.  This is a bad proposition that will cost you more time and money in the long run.

Part two of the article "Why You Should Get 501(c)(3) Status Before the Year Ends."
What a strange question.  What do you mean?  Are there different types of 501(c)(3)'s?  To best answer that question, let me refer you back to a motor oil commercial.  It featured two men in a car leaving a plume of smoke behind them.  One man asked if he used the proper brand of motor oil and the driver's response was, "Motor oil is motor oil."  Apparently, it is not.  The oil the driver used burned easily and the evidence was obvious.
Is it the same with your ministry’s 501(c)(3)?  The answer is yes.  In all of the years I have been involved in ministry and consultation, I have had countless conversations with leaders who were told by the person preparing their 501(c)(3) application that it was better to go "middle of the road" and keep their application simple so that they could get approved quickly.  I cringe every time I hear that because your 501(c)(3) is your church's public record.

What is your public record and why is it so important?

As stated in my previous article, in order for your church to be able to guarantee that contributions to your ministry are tax deductible, you must get 501(c)(3) status.  When you apply for the 501(c)(3), the entire application is a public record that anyone in the general public can look up and read.  Section 6104(d), as regulated by the IRS, requires that the following records of your 501(c)(3) be made available for public inspection.
Your entire 501(3)(3) application which includes:

1. Articles of incorporation
2. Constitution and bylaws
3. Doctrines
4. Your ministry's form of government
5. Schedule A and all of the supporting facts such as your ordination program details

Are you certain that your 501(c)(3) application on record with the IRS accurately reflects your heart, vision and ministry government?  Does it reflect the way you run your ministry?  Unfortunately, many ministries have fallen prey to the quick and easy 501(c)(3) mills that offer super, super low prices and fast, "one-week" preparation.   They do this because they take a cookie cutter approach due to the fact that they are simply form preparers that do not consult with you to hear your heart and strive to make your dreams a reality.  While their approach may be tempting, the long term consequences may leave your ministry with a limp.  Remember the motor oil commercial?  The driver's goal was to get the motor oil in the car without considering if it would protect his car's engine for the long term.  So, he chose the cheapest oil money could buy.  The consequence was the breakdown of his car, as all could clearly see.
Your 501(c)(3) represents your life's goal and work.  It should take time and cover an extensive number of considerations.  This requires one-on-one consulting, interviews by telephone and extensive reviews by more than one person. Never buy into the concept of quick and easy 501(c)(3) status.  This is not only deceptive, but it is harmful to your ministry because more often than not, the changes are not made and even if they are, IRS letter 947 requires your church to submit those changes for further reconsideration.  This is a bad proposition that will cost you more time and money in the long run.

Ten things your 501(c)(3) should reflect

Let me give you a quick list of some things that should be in your 501(c)(3) application.  This list is not comprehensive, but should give you an idea of what should be in your application.

1. A purpose statement that allows your ministry to expand into activities that may not be on your radar today (Ordinations, colleges, universities, international activities, expanding and creating a network of churches and ministries, etc.)
2. Ecclesiastical authority of the founder and proper accountability that prevents him/her from being voted out without cause (This is super important; what you don't know can be detrimental!)
3. Mutual interest language to protect the board of directors from defamation lawsuits should a member need to face disciplinary action or removal
4. Standard of living requirements for members and directors
5. Doctrinal statements that protect the church from future public policy that runs contrary to the ministry's beliefs and practices
6. A policy for the correct handling of donated property
7. Foreign activities policy and the office of foreign asset control
8. Conflict of interest policy
9. Reimbursement policy
10. Appointment and removal of board of directors (elders, trustees)  Who does it?

Facts and Myths about Church and Ministry Incorporation

Three Facts about incorporation

Fact One

Incorporation provides liability protection. No one will put more on the line than the founder. Armed with a vision of winning souls into the kingdom, many men and women of God risk everything they have. But it does not have to be that way. By incorporating the ministry, state law separates the founder from the dangers of liability lawsuits and misfortunes that could fall on a ministry. Here is how it works. The laws of all fifty states provide that a corporation is a separate legal entity from its founders and members. This separation creates a legal concept known as indemnification. Under the indemnification rules a board member, officer or founder could not be held personally liable for the debt, liabilities or judgments against the corporation. Its prevents the consequence of one member's acts from falling personally upon all the members. Here is an example: A children's church volunteer is found guilty of child molestation. The parent's attempt to sue the church, its directors and members. If the church is incorporated, the parents do not have a case against the board of directors or members of the church on a personal level. The parents could only try to hold the corporation liable. If the church is not incorporated, the parents could have a case against the pastor, board of directors (elders) and members of the church.

Fact Two

The Articles of Incorporation are the church's supreme legal document. Under state law, the articles of incorporation are the church's supreme legal document. It has greater authority than the constitution and bylaws and any other legal paper. Therefore, it is important that you carefully draft the following to best protect your vision and call:

1. The purpose statement must clearly create a religious (ecclesiastical) corporation that allows the ministry to expand into a wide array of activities. 
2. A clause that does not allow the articles of incorporation to be amended without the vote and approval board including the founder/president.
3. A clause that creates membership, but orders the bylaws to provide for the manner of admission and removal. This allows you to carefully draft and amend your church's membership without having to pay money to the state to amend the articles of incorporation.
4. A clause that establishes the duration of the corporation to be perpetual. I once read that if you want to do something great in this lifetime, then build something that will outlive you for at least 100 years. One thing that incorporation will do is create perpetual existence of the corporation. The ministries of many of our greatest American heroes of the faith still exist today because they incorporated to ensure the continuity of the vision the Lord gave them when they first started. When I think of perpetual existence one name that immediately comes to mind is D.L. Moody.

Fact Three

Incorporation allows the ministry to enter into contracts in its own name. One of the most wonderful facts of incorporation is that the ministry can enter into contracts, such as owning property in its own name without putting the founder on the hook for any negative results that may occur. Let me explain how this works. Let's say that church XYZ signs a three year lease on a building it rents from Landlord ABC. After the third year the church decides to move to another location so it gives the landlord due notice and vacates according to the terms of the contract. However, the landlord is upset that the church is leaving and tries to sue the church. He cannot name the pastor or board members as defendants because the contract is with the corporation. In the sad event that the church has to close its doors and dissolve, the founder and board can do so responsibly without being on the hook for any claims the landlord could make.

Three Myths about incorporation

Myth One

Incorporation of a church makes the church subject to the state and not Christ. This idea comes from a lack of understanding that a corporation is a separate entity from the true church itself. The true church is the Body of Christ, His bride. The corporation is simply a vehicle we use to engage in business transactions, own property and protect the true church. A church is free to preach the gospel, its doctrines, and beliefs even if they fly in the face of public policy without any hindrances or fear. The idea that a church is not allowed to preach freely and that it signs a waiver of rights is not founded on truth.

Myth Two

When a church incorporates, it must sign a waiver of its rights to free speech. There is a myth out there that makes the rounds on the internet that an incorporated church can get tax exempt status only if it applies for 501(c)(3) status and signs away its rights to free speech. Why such a myth continues today is a mystery to me. At StartCHURCH, we have assisted thousands and thousands of churches obtain 501(c)(3) status and never once has a church been asked to sign such a waiver of rights. The courts have also clearly ruled on the constitutional protections provided to the church that prohibits government interference with their right to freely worship.

Myth Three

You are subject to state and federal regulation only if you incorporate. This is one of the most prominent myths of all when it comes to incorporation. It is true that there are state and federal regulations that apply, but they exist only when the church does not create the proper clauses in its articles of incorporation to retain control. For example, many state laws automatically grant the power to control a church corporation to the members unless you include a clause that states otherwise. Sadly, there are some people that believe that a church is never accountable to the state or federal government and that there are not any IRS laws that apply to it. Perhaps the greatest danger in this belief is the idea that if a church remains unincorporated, it will not be subject to any tax laws such as the withholdings of social security taxes of its employees, its ministers having to pay taxes on the wages paid to them and other unrelated business income taxes. One church that attempted this is Indianapolis Baptist Temple. The church called itself a free church and therefore did not withhold any social security taxes of its employees. As a result, a Federal court ordered the seizure of its assets to pay its federal tax debts. In dealing with the audit of churches, section 7611(H)(1)(A) clearly states that the code pertains to incorporated and unincorporated churches and those claiming to be churches. This is a direct contradiction to those who believe that a "free" church is immune to any IRS accountability.

How to incorporate

You may have many questions about incorporation and how it is done. While this requires expert guidance, in essence one files a document that in most states is called the articles of incorporation. This document forges the beginning of your corporation when it is submitted to the secretary of state and stamped filed.