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!

What God Said Through the Preacher's Wife

By Raul Rivera
The voice of your wife is one of the most important voices a pastor will ever hear.  God will tell you more about leading your church through your wife than any other person.  Yet often times, and I'm no exception, we tend to hear her as a last resort.  It's been 19 years now and the same struggle continues . . . I don't hear God very well through my wife.  Why is that?  Is there anyone more committed to me than her?  Is there anyone who prays for me more than her?  What a wretched man I am.  The very things I want to do I do not do and the things I wish I did every day, I rarely do.  In the years that I was a pastor there are three very distinct things that I heard God say to me through my wife and I would like to share them with you today.

1. I believe in you: My wife continually made it clear to me that even if no one else believed in me, she did.  Her voice was so important to me in the first days of starting the church because, truth be told, she was the only one who actually did believe in me.  A pastor's wife not only tells her husband that she believes in him, she also proves it every day.   She does it by putting her fingerprint in every area of the church, from children's ministry to the cleaning, from the church books to praise and worship.  I have heard many pastors tell me that when they feel discouraged, they think about the people in the church that are committed to the church and of all their sacrifices and that makes it clear to them that the Lord is still in it . . . but they rarely mention their wives.  Maybe it's a given, but I know my struggles and those of pastors.  For unexplainable reasons we tend to lose our way after a church has grown a little and we tend to forget that her voice today is ever more important than ever to hear . . . especially when we need to know that the Lord is saying that He still believes in us.   
2. Am I Beautiful?:  Every time my wife and I go on a date, she takes extra time to get dressed and make herself beautiful.  When she comes out of the bedroom, she looks at me with a pretty smile and waits in anticipation for my comments.  The first words I say as soon as I see her can determine the mood of our date.  She wants to hear me say "Wow, you look beautiful."  Her need to hear those words makes her feel pursued.  Being made in God's image she was born with the need to hear those words of affirmation just like I am.  However, she expresses a side of God that I can only know though her.  The Lord wants you as a pastor to pursue Him and find that He really is enough for you.  We find an example in Scripture in Mark 6:48 (NLT) when the Lord walked on water towards the disciples as they struggled to keep their boat from sinking.  The scripture records that he approached them but instead of helping them he intended to "pass them by."  He could have just helped, but He wanted them to notice Him.  There is a reason for this.  As pastors when we experience success in ministry, it is very easy to get lost in the success and quit our pursuit of Him. 
3. Be excellent: Have you ever wondered why it is that the pastor's wife is always willing to do the things that no one else will do?  It's not just because she believes in her husband, but because she has deep-rooted feelings for you to succeed as a pastor and have favor with God and man.  When I saw her do the things no one else wanted to do, I heard the Lord telling me, "Raul, be excellent in ministry."  When I pastored my wife noticed the details.  She took minutes at every board meeting and made sure they were excellent, she overlooked Sunday bulletins, noticed how I dressed every Sunday and also expressed great concern over the church's government compliance even though she was not an expert in that area.  She knew that if these areas of the church were done with excellence it would give me favor before God and men.  While observing this it became clear to me that the Lord wanted that same pursuit of excellence to be borne in me.

If what you are reading in this article seems like a stretch, just simply ask your wife her opinion.  She will probably confirm it and tell you more than you are ready to hear.

Have You Heard of the Housing Allowance Retirement Rule?

By Raul Rivera
The vast majority of churches across America are not aware that a church can create a retirement (pension-like) plan that allows a minster to receive tax-free income after he/she resigns or retires from the church.  This is a rule that is defined in IRS Revenue Ruling 63-156.  In essence, a church takes a portion of a minister's pay each week, month or year and invests it into stocks, mutual funds or other interest-bearing accounts.  These funds grow over the years and when the minister retires the church can pay these funds to the minister on a weekly, monthly or annual basis. The minister can claim a housing allowance exclusion just like in the days when he/she was working in the ministry because these are funds that he/she earned for services performed as a minister.

Let us look at an example

Pastor Tom's total deferred housing allowance grew to $450,000.00. He retired from his church in 2010.  In the past, Pastor Tom's housing allowance was $20,500.00. He was also exempt from self-employment tax. To maximize the tax savings, the church paid to Pastor Tom annual distributions of $30,000.00. Though he retired from the church, it continues to pay him $30,000.00 a year from the accrued funds.  He is able to exclude $20,500.00 each year from taxable income, leaving only $9,500.00 as reportable taxable income that will be erased by the annual standard deduction.  The bottom line is that this housing allowance retirement rule is the best retirement plan in America today, because the money goes into the investment tax free and it can be withdrawn tax free.

How is the plan created?

In order for the plan to be created correctly, the church and the pastor reach a contractual agreement that the church will deposit a monthly set amount of money into an interest bearing account, (this can also be stocks or mutual funds) that grows tax free. The funds have to be invested in his behalf for the services he performs as a minister.  The key to making the money tax-free is that the agreement has to state that the church must maintain full control over it and the money can only be distributed to the pastor according to the written agreement. Some churches deposit weekly, others monthly, while others may choose to only deposit when members and other individuals designate pastoral love gifts, offerings or other gifts. Under this rule the donations given by church members specifically to this plan are deductible.

The three legs of retirement

Let's face it,  we are all getting older and one day we will reach an age where we will not be able to earn income as in the past.  Wisdom cries out to us and invites us to plan for the future.  Proverb 6:6-8 commands us to study the ant and its ways.  It tells us that the ant stores its provisions in the summer and gathers its food at the harvest.  The ant stores provisions in the summer so that it has enough to carry it through the winter.  In the same way, we ought to consider its ways and create a way to store up some of our provisions and save them for the golden years of life.  By doing so, we put into motion a biblical principal that has God's zeal on it.  With that in mind, listed below are the three legs of retirement that I believe every minister should have.
1.     Social Security:  Though many people doubt the solvency of Social Security, I still believe that every minister (whether they have opted out or not) should ensure that they earn enough credits to receive social security payments at retirement.  You can earn between $580.00 and  $2,000.00 per month.
2.     Roth IRA:  Every minister should establish a Roth IRA account.  Under the law, a person under 50 can deposit up to $5,000.00 after tax dollars ($6,000 if over 50 years of age) per year into stocks, mutual funds or the like and allow that money to grow tax free and then withdraw it tax free at retirement age of at least 59 and 1/2.
3.     A Housing Allowance Retirement Plan:  As mentioned earlier, there is not a better retirement program that anyone can put into place than the church-sponsored Housing Allowance Retirement Plan.  In this plan the church can deposit pretax dollars into it and allow them to grow tax-free and then the minister can start withdrawing tax-free after he/she retires from the church.  For those who have attended one of our Church Compliance and Ministry Empowerment Conferences, beginning on page 136 of the manual, you will find this topic covered.

Very few ever take advantage of the housing allowance retirement rule

One of the most difficult things to do is to get someone to seriously consider and plan for retirement.  I often hear people make statements to me that they are getting older and have nothing set for their future.  Yet I see them a year later and they say the same thing.  He who has ears let him hear.  Today is the day to start planning for retirement.  If you are a minister, knowing how to implement the Housing Allowance Retirement Rule can be the best thing you do this year for your future.  When I am man in my 60's or 70's I would love to hear you tell me, "I read your article and made the change and today, I am a man/woman of affluence because of it."

Love Offerings and Bad Church Books Lands One Pastor and His Wife In Jail

By Raul Rivera

The pain of change

Though Bishop Anthony L. Jinwright wanted to make sure that his church and finances were right, he was reluctant to make the changes needed in order to get in compliance with state and federal law because he dreaded the period of discomfort those changes would bring.  He failed to report reimbursements, seed offerings and his housing allowance as taxable income from 2002 to 2007.  As early as 2001, it was brought to the church's attention that several items were out of compliance and in need of correction. There were eight major items that required modifications and most of those items affected the way he filed his personal tax returns. When he met with an accountant, he often said that he just wanted to "get it right."  He had labored for many years to grow the church, but now that Bishop Jinwright was confronted with the mistakes of the past, "getting it right" would require time and energy.  Below is a list of the 8 major items the church needed to correct.

1. The church's accounting methods were not compliant with accounting principles 
2. On several occasions the church's tithes and offering s were given directly to the pastor without being counted as taxable compensation 
3. His compensation package did not adequately document his compensation 
4. Church board meeting minutes were missing 
5. No church minutes concerning the approval of his housing allowance could be located 
6. The church did not have an accountable reimbursement policy in its corporate records 
7. Then church did not have an adequate tithes and offering counting procedure, which often caused bank deposits not to match the offering count sheets 
8. Monthly seed offerings were taken up for the pastor and not reported as compensation

God is our protector

As time passed, Bishop Jinwright continued to allow the problems to remain.  In 2004, he decided that the Lord would protect and cover his ministry.  While trusting God is a noble and worthy stand of faith every minister should take, it does not relieve us of the responsibility of excellent stewardship that is required.  I believe that God's zeal is on your ministry.  He wants you to succeed.  However, He wants your success to come as a result of your diligence and faithfulness to manage with integrity the ministry He has placed in your hands.  The discomfort that comes with facing and fixing the problems of the past is well worth the rewards that follow.

Building the infrastructure that leads to lasting success

Bishop Jinwright had his moment to invest time and money in building the infrastructure the church needed to manage the finances.  It is not that hard to get it right.  In fact, it is only hard in the beginning, and then every year thereafter it gets easier and easier.  On the contrary, if we let the problems persist, they only increase and cost more to correct. Creating an infrastructure requires that you allow those persons serving in your ministry the ability to get the training they need and then the room to do their job.  Pastor, remember that your board members serve because they believe in you.  If you pick them right, then trust them to do what is right.

How his problems began

Bishop Jinwright continually filed his tax returns late between 2000 and 2007.  That caught the attention of the Department of Justice, sparking an investigation, which began in 2007.  Meanwhile, Bishop Jinwright's ministry continued to exist and he often traveled to speak at conferences and churches across America.  "I feel that we have been blessed tremendously," was his description about that period of time.  Indeed he was blessed.  The Lord had marked his life and as a minister he was able to preach the Gospel giftedly.  Yet, one problem remained, a problem that occasionally kept him awake at night looking at the ceiling and wondering what would happen to him and the ministry if the IRS stepped in before he could voluntarily fix the problems himself.

Charges filed

Finally, nearly nine years after the church discovered that it was not compliant with state and federal law, the Department of Justice charged him in April of 2009 with fraud for filing false tax returns and tax evasion for not paying the taxes that should have been paid had he properly filed his tax returns.  The 16-page indictment made it clear that he did not commit honest mistakes, but rather that he knew better and chose not to comply with the law.
After he was indicted, the prosecution continued to develop its case against Bishop Jinwright by combing over church records, interviewing witnesses and reviewing his personal records.  In that process, they found some information they believed was credible enough to charge his wife.  She, too, was charged and arrested.

The verdict

Now faced with the possibility of prison not just for himself, but also for his wife, the painful financial adjustment that should have been made back in 2001 suddenly appeared like a very small and simple thing.  In fact, it now felt like it would be a joy!  After 4 weeks of testimony, Bishop was found guilty of 13 counts of fraud and tax evasion.  His wife was found guilty of 4 counts of fraud and tax evasion.  It is a sad ending to a chapter in their lives that began so happily.  The Department of Justice issued a press release on May 3^rd, 2010 stating that Bishop Jinwright faced a maximum of fifty-three years in federal prison while his wife Harriet faces twenty years.  On December 10^th, 2010, US District Judge Frank Whitney, Anthony Jinwright received eight years and nine months in prison, while his wife received six years and eight months. Additionally, they must also pay the Internal Revenue Service more than $1million, plus $213,666 to the state.  I believe that he and his wife will bounce back and one day testify of the goodness of God.
God's call on your life will require you to handle money.  You and I will never be able to do ministry without having to get the money part right.  It does not matter where you live or what type of ministry you have, ministry and money will always exist together. It is part of God's internship to prepare us to become partakers of His riches in glory.

Closing argument

This article was very difficult for me to write because I risk the possibility of coming across as fear mongering.  Yet, the facts speak for themselves.  My goal in this article is to stress the necessity for compliance with state and federal laws so that your ministry is positioned to prosper.  It is what keeps me awake late into many evenings looking for changes in the law and how those changes affect you and your ministry. I know that there are many churches in America today that face the same circumstances as Bishop Jinwright, and so long as they have ears to hear, my message of empowerment to them could not come at a better time.  It's time that you look at your church's financial records . . . face the facts . . . and move forward to fix them.

Three Things To Grow Your Church Within 30 Days

By Raul Rivera
This year's summer has been brutal.  Not only have we had one of the hottest in recent history, it has also been filled with political turmoil, spiritual apathy, and unsettling financial issues.  By now many pastors feel like the end of their dream is at hand.  As one pastor bluntly put it, "I can't take another week preaching to the same 20 people with little to no results."  I know where you are.  During two of the ten years that I pastored, I lived with a feeling that Sunday was the worst day of the week.  Hang in there.  Your call is a noble task.  We applaud you for saying yes to the Lord.  Whether it means 20 people or 1,000, we are excited for you because you are in the front lines of Kingdom business.  We have always considered it a great privilege to serve pastors in the business side of church.  We have enjoyed seeing churches start with just a few people and grow into churches of hundreds and thousands.  You will grow, but you must remain faithful and stay diligent over the work entrusted to you.  Let me give you three things that will cause your church to start growing within 30 days.

1.  Summer is ending

Summers are usually very difficult on pastors and ministry leaders.  The membership tends to dwindle each passing day and it can make you feel isolated.  As a pastor, I always struggled with summers because no matter how hard I tried to prepare myself, preaching to 20 people always made me feel like God abandoned me because just a month ago I was preaching to 160.  Never mind that our church was in a small town of about 1,000 Spanish-speaking people mostly working in agriculture.  Summers meant the only time of the year they could visit their families in Mexico or other Central and South American countries.  When I pastored, the end of summer was always welcomed.  It meant a return to structure and schedules.  Kids returned to school (parents always said amen), vacations ended, and out of town weekend trips diminished as the fall season approached.  It always led to a more consistent pattern of church attendance and the ability for a church to make more concrete plans for outreach.  This post summer season, (between August 12^th and September 30^th) I challenge you to do two things.

Communicate with your congregation every week:  You can do this by writing letters of encouragement, appreciation and gratitude to members and key leaders.  I also strongly recommend that you start a pastor's blog and encourage the church to sign up for it.  For many, it is a way to stay connected with the congregation during the week.  I know of several pastors that send out a blog once or twice a week.  They share personal thoughts, challenges, encouraging words or whatever is on their minds.  A good number of the members of the congregation read it and leave comments.  The pastors make efforts to reply to each one personally.  Every Sunday, many of the members feel that they have had a personal conversation that week with their pastor.

Prepare a six-week sermon series on hope to begin the first Sunday in October:  Preaching messages that connect require planning.  Part of growing a church is planning the release of timely and well-studied messages.  In the meantime, as you prepare the messages, market them on your church website and through mail.  There are many online resources that will get you the names and addresses of thousands of families that meet your church's criteria and would likely respond to a nice, color postcard advertising the upcoming sermon series on hope.  To best take advantage of mail marketing your church should apply for and get a bulk and non profit mailing permit.

2.  Become a person of confidence

There is something about confidence that can never be faked.  You either have it or you don't. If you do not have confidence, believe me, you will fool no one.  Everyone will know.  There are two words that define confidence:  certitude and assurance.  You can only have confidence in an area if you are certain about it.  When you are certain about something, it gives everyone around you assurance.  That is why confident men/women have many followers. 

Becoming a person of confidence requires investment.  You cannot be confident in who you are in God without spending time in His presence.  If you do this one thing, the members will have the assurance that you are worthy to be followed and it also becomes very attractive to newcomers.  People are always looking for someone to lead them and it may as well be you.   Paul the apostle was so confident in who he was in the Lord that he told the Corinthians, "Imitate me, just I also imitate Christ."  Do you have the confidence to say that wholeheartedly?  Remember, when you say it, people will perceive your confidence, or lack thereof, in those words.   

In the same way, you cannot be confident in your books and compliance with the IRS unless you purposefully invest the time and resources necessary. When it comes to church business and IRS compliance, knowledge leads to confidence.  Growing your church means that more people will join the congregation, but in order to maintain that growth, you must have more income.  Just think about this for a moment.  If you lack confidence in your church's books and IRS compliance, why should people give to your ministry?  They have to have the assurance that they are giving to a solid organization.  Your level of confidence in your own organization's books and IRS compliance imparts that assurance.  Lack of confidence here can be devastating because it is felt at every level of your organization.  To have the kind of culture that exudes confidence, some changes may be necessary. If you are reading this, and you are not confident in the state of your books or your IRS compliance, I want to encourage you...begin to make a change today! This one area can be a catalytic area that helps you gain the momentum you need for the future. One great way to start making a change is investing into your administrative team at one of our upcoming conferences.

I am confident that I can help you become confident

I am 100% confident that you and your church will benefit from our conferences.  In fact, I offer a full-money-back guarantee.  That is one promise I have never had to honor.  I want you to join me so that you too can say you are confident in your own church. Your church will love you for it.

3.  Preach a message of hope in uncertain times

As I mentioned earlier, a message of hope is a desperately needed message today.  There is no better time to prepare a relevant message for today than one that describes our God as a God of hope.   Hope is the anticipation of good from God in every area of life.  People need to know that God has "plans to prosper them and not to harm them, plans to give them hope and a future."  (Jer. 29:11).  Is your message convincing?  Are people's hearts filled with hope when you preach?  Charles Sawyer once said, "Without hope men are only half alive.  With hope they dream and think and work."  Hope enables the next generation to move forward in God, rather than being afraid of their future; it speaks of the nature of our God, who has wisdom for every challenge and specific answers to lead us into hope-filled tomorrows in Him.  If you take the time to fully prepare a six-week sermon series on hope, you will be able to build on and sustain growth because the members of the church and those who come for the first time will cling to it.  You never know, you just might find yourself leading more people than you thought possible.

Does Your Church Know the 250 Dollar Rule?

By Raul Rivera

Pastor Jones' Church and Tom

It was a beautiful spring day in mid April.  The Sunday service the day before marked the first time that Pastor Jones church had 175 people in attendance.  On Monday, he walked into his office to see a note from Tom requesting a meeting with him.  Pastor Jones was glad to see Tom's note.  He and Tom had been talking about planning a hunting trip for men and their sons in the Buffalo National River.  Though the trip would not be a for another 7 to 9 months, knowing Tom and his attention to detail would mean a pleasant afternoon discussing things that they both loved--hunting and preparing trips that forge wonderfully meaningful memories for their sons.

Pastor Smith's Church and Rodrigo

Sunday was a wonderful day for Pastor Smith's church.  The Sunday service featured an illustrated sermon which yielded 21 new salvations.  Attendance was 182.  What excited Pastor Smith about the numbers was that he felt confident in the church's ability to disciple the new believers.  Being Monday morning, Pastor Smith went through his routine activities which included overseeing the usual deposit of the duly counted tithes and offerings, issuing receipts, going over the list of those who attended the church for the first time and sending each one a welcome letter inviting them to the monthly Sunday banquet held for newcomers.  As his day transpired, he received a text message from a good friend and faithful church member, Rodrigo, who had just arrived back in town and wanted know if he could have lunch with his pastor.

Pastor Jones Meeting with Tom

After having read Tom's note, Pastor Jones immediately instructed Lisa, the church receptionist, to schedule a meeting with Tom for 2:00 p.m.  Going on the assumption that they would discuss life, the future hunting trip and church life, pastor Jones had no idea that Tom's meeting with him was regarding a matter with the IRS.  As soon as Tom walked into pastor Jones office, Pastor Jones knew something was wrong.  Tom was very quick and to the point.  No usual handshake followed by the pseudo hug where right shoulders collide in one motion.  Tom began by expressing how very disappointed he was with the church.  He had just received a letter from the IRS denying over $24,000.00 in deductions made to the church for tax years 2008 and 2009.  He had also received a tax assessment of over $8,130.00 that he owed to the IRS.  The IRS agent agreed that Tom should have gotten a tax write off, but simply put, the receipt he got from the church did not meet the requirements of Section 170 and therefore, though the agent did not want to, he had to deny the deductions and assess a tax.  Tom ended up having to pay an additional $8,130 in tax as a consequence of the church's failure to properly issue a receipt that met the requirements of Section 170.
When Tom began attending in early 2007, he immediately began tithing to the church.  But because of the nature of his employment, he was paid on a monthly basis causing most of his giving to the church to be in amounts of nearly $1,000.00. Though he was able to prove to the IRS that he gave to his church, the strict substantiation requirements imposed by Congress under Section 170 requires that any donation made to the church of $250.00 or greater, receive a separate receipt stating whether any goods or services were received in return for the donation.  Tom gave 16 different times to the church in 2008 and 18 different times in 2009.  In 2008, he gave on 12 separate occasions checks to the church that were for more than $250.00.  And 14 in 2009.  Pastor Jones was grateful for Tom's giving and knew that it was those faithful gifts to the church that made the ministry possible.  However, Pastor Jones did not know the $250.00 rule.  He was at a loss for words.

Pastor Smith's Meeting with Rodrigo

Rodrigo is a well-traveled man, conducting business throughout most of South America consulting with banks on security issues.  Life for him had always seemed successful on the outside.  However, in February of 2006 his marriage was on shaky ground and in an effort to please his wife he attended a midweek service where he heard Pastor Smith preach a message on redemption.  Though he had no idea what Pastor Smith was talking about, the words that he spoke that evening convicted Rodrigo of his sin and the rest was history.  As the two men reminisced the early days of the church, they remembered the day Rodrigo got a letter from the IRS asking that he substantiate the $39,000.00 he gave to his church in 2008 and 2009.  Rodrigo responded by sending the IRS copies of his cancelled checks, a contribution statement and a separate receipt he got for each contribution he made to the church that was for $250.00 or more.  Rodrigo thought that the receipts he got from the church were overkill.  He actually suggested that if the church did not waste so much paper issuing these receipts, it could save a lot of time and money.  For tax year 2008, Rodrigo received one itemized contribution statement from his church and 27 other receipts for each contribution totaling $250.00 or more.  For tax year 2009, he received one itemized contribution statement and 31 separate receipts.  Each of the receipts had a statement that read as follows:  "No goods or services were provided in exchange for your contribution with the exception of intangible religious services."  Little did Rodrigo know that Pastor Smith's church and the way they gave receipts would save him in an audit of his tax return.  Pastor Smith and Rodrigo continued their wonderful meeting, which lasted for about an hour.  After Rodrigo left, Pastor Smith felt blessed that the Lord would send such awesome people to his church.  Just another day being a pastor.

What Do You Think Will Happen Between Pastor Jones and Tom?

After Tom left that meeting, Pastor Jones felt devastated and responsible for what had happened to Tom, yet helpless on how to remedy the situation.  Tom was not asking for financial help. . .he was just expressing his clear disappointment with the church.  What Pastor Jones thought was going to be another day pastoring turned out to be depressing!  What if the same thing happened to other members?  They all got the same kind of receipts as Tom!  In an instant, the fact that 175 people attended the day before was no longer a cause for joy.  Instead, it appeared as a travesty of success. Pastor Jones had no idea what would become of his relationship with Tom.  What do you think?

Confessions of A Stressed Out Church Bookkeeper

By Raul Rivera

Based on a true story!

Like many start-up churches, Pastor Johnson's church did not have an expert bookkeeper; but it did have Pastor Johnson's wife, who labored faithfully each week at the task of keeping the books, ensuring she did her best job in an area that, well...frankly, left her feeling quite inadequate!  There were some weeks she wondered if the church books were really a mess.  Pastor Johnson, although grateful for his wife's hard work, truly did not understand why she felt completely stressed out over the job... until one Saturday night several months later, when he would learn the surprising truth about why his wife was always so edgy when it came time to work on the church books. 

Confessions of a stressed out pastor's wife

It was a late Saturday night in February when their revelatory conversation began, triggered by shocking news they had learned earlier that afternoon, that their corporation had been administratively dissolved because they did not file the previous year's annual report.  Pastor Johnson was upset because his wife had not filed the report.   She was stressed out because she did not even know that they were supposed to file an annual report, which all the more convinced her of the high probability that a whole slew of other things were most likely out of compliance.  At this point she felt she was fighting a battle without ammunition, a battle she could in no way win.
It took a while for Pastor Johnson's wife to articulate the mountain of stress she was under.  But once she did, the gravity of her feelings deeply moved Pastor Johnson's heart.  He had not even been aware that she was carrying such a burden, and truly felt saddened that he, supposed to be a source of strength and covering for her, was the very one who had laid this heaviness upon her.  As they prayed together, he pledged that he would help her find the resources she needed to empower her to do her job with confidence.

You probably feel like Pastor Johnson's wife

What Pastor Johnson and his wife learned that day is that most church bookkeepers feel inadequate to do the job, but press forward because there is no one else available to do it.  It certainly is a struggle and one that you probably find familiar.  The good news is that you do not have to feel that way.  There is help available to you.

How I met the Johnson's

It was in March of 2010, after a wonderful conference, that I met the Johnson's and spoke with them.  They were grateful to have attended the Church Compliance & Ministry Empowerment Conference because they finally felt empowered with the information they needed to do a good job.  All it took was a one-day investment for them to know they were finally on the right track.
My curiosity was intrigued as we spoke together, and I asked them one question: "What did you learn today that you did not know before you attended?"  I expected an answer consistent with what most people tell me; which is that they did not know that they were so far out of compliance.  Though their answer was somewhat consistent with what I expected, she also included that the conference had reawakened their audacity to dream big dreams.
What they experienced that day could be the very thing you need; to be empowered in the areas of administration that would otherwise keep you paralyzed with feelings of fear and inadequacy.  The knowledge and freedom gained releases you to dream again the dreams that God put in your heart when you started the ministry.

How to Remove a Board Member

By Raul Rivera
Removing a board member is much more difficult than adding one.  Aside from the board member voluntarily resigning by submitting a resignation letter, asking someone to resign or voting them off is a balancing act between the legal ramifications and the ripples that it can send through your church.  Experience tells us that a board member that is removed involuntarily never leaves quietly.  This is officially classified as a disgruntled board member.  It is always painful and uncomfortable because it is disunity caused by one who was at one time a close confidant and good friend.  King David wrote about this in Psalm 55.  His heart was in anguish . . . if it was his enemy that was insulting him, he could endure it.  But, when his troubles came from a companion, a close friend with whom he once enjoyed sweet fellowship at the house of God, it was more than he could handle.
How you handle the actions of a disgruntled board member will affect two areas of your church.  They are numbered below.

1. The congregational life
2. The legal foundation 

Congregational life and the legal foundation

If the disgruntled board member makes noise that only affects the congregational life of the church, the legal foundation is usually OK and the pastor can focus on dealing with the problem.  However, if the disgruntled board member attacks the legal foundation, the congregational life of the church is guaranteed to be negatively affected as well.  If we make sure that the legal foundation is solid enough to withstand such attacks, then we only have to focus on keeping the congregational life of the church healthy.  A church in Washington was sued by a board member who was removed by a vote of the board.  However, the church had some obvious weaknesses in their legal foundation.  The result in court was that the pastor and the entire board were removed by the court (Kidisti Sellassie Orthodox Tewehado Eritrean Church v. Medlin).

Two ways to do it

There are two ways to remove a board member involuntarily.  They are as follows:
1.     Diplomatically:  This is the method that I always contend for first.  Below is an example.

• Have a long and thorough conversation over coffee:  Share your heart and try to find out what is at the root of his/her behavior.  In the meantime, speak value to him/her by mentioning their strengths and the things you appreciate more about him/her.  This conversation is not confrontational, but rather it is designed to encourage him/her and for you to try to understand the reason for their behavior by asking questions about their behavior and how you can better serve to help him/her through it.
• Speak individually to each board member under strict confidence:  By now, each board member has an opinion about the disgruntled board member.  This is where you must be careful to say as little as possible.  You simply ask them, "How is your relationship with XYZ?"  Let them talk and then say, "I'm considering asking for his/her resignation," followed by the question, "What do you think about him/her no longer being on the board?"  Chances are that they will confirm your wishes.
  
  
• If after the first conversation the pattern re-emerges, then a second conversation is needed.   The second conversation comes only after you are convinced that removal is the best and only option.  This one confronts his/her behavior in the gentlest way you know, but also asks that he/she resign.  I had success by asking in the following manner:  "For me our relationship as friends and brothers in the Lord is more important than the value you add to our board of directors.  While I appreciate it, it cannot come at the loss of a good friendship.  I would like for you to resign and focus on resolving any issues you have.  I have spoken with the rest of the board and they, too, are in agreement with the request I am making of you."  At this point move the conversation to a letter of resignation so that instead of getting voted off the board, he/she resigns.
  
  
• If he/she sends a resignation letter, then accept it, and submit it to the board at the next official board meeting.  Attach a copy to the minutes and save it in the church's corporate records kit.
  
• If the board member refuses your counsel, follow the steps of the method below.

2.    By vote of the board:  A vote by the board should only be done as a matter of last resort.  In almost every case where a church takes this action to remove a board member against his/her wishes, the repercussions are always negative.  However, if the church follows this course after first attempting diplomatic measures, the results are less impacting on the congregational life of the church while keeping the legal foundation unmoved.  Below are the proper steps to take.

• Call a special meeting of the board:  Make sure you follow the procedure prescribed in your bylaws.  After having assisted thousands of churches over the years, our consultants find that most church bylaws do not have any provisions for special board meetings.
• Create an agenda:  The special board meeting should be for the sole purpose of taking official action to remove the board member.  We teach pastors and leaders how to create agendas at all of our conferences. 
• Send proper notice:  State law requires that every board member receive proper notice.  This is a notice that has to be sent to all board members informing them of the board meeting.  It has to be sent "x" number of days in advance, according to the prescribed requirements of your state.  Proper notice should be sent directly to each board member with a copy of the agenda so that they know the reason for the board meeting.
• The actual board meeting:  On the day of the board meeting make sure that the secretary of the board takes attendance.  It is important to document it.  Once it is documented that a quorum is present, the pastor/president or chairman should call the meeting to order and discuss the only item on the agenda.  After discussion, someone should make a motion to remove XYZ from the board.  Someone should second it and a full vote of the board should be taken.  At this time those in favor of the motion should vote, followed by those opposed.  If those in favor are in the majority as prescribed in the bylaws, then it becomes a legally binding act of the board.  The state and the courts will sustain the board's actions.

The Church's Legal Duty To Protect Worshippers

By Raul RiveraHave you ever thought about your church's responsibility to protect worshippers from injury?  Chances are you probably have not thought about it with much detail.  What I mean is have you ever pondered the possibilities of physical injuries that can happen at church during praise and worship, alter calls or greeting time?   What is the church's responsibility if someone goes wild in a service, resulting in injury to others or to himself/herself?  What if someone slips a disc conducting a baptism?  Or what about Sunrise Easter services held off the church property?  What if a perfect stranger attends and then claims he was injured while in attendance?  Can the church be held responsible for his injuries?

People suing churches for almost anything

One man in North Carolina sued his church after performing many baptisms during a Sunday service because he woke up the next day with back pain that resulted in a severely herniated disk.  He claims that the church should have told him "the repetitive motion required for performing baptisms . . . could cause serious damage . . ."
In another case, a woman serving as a greeter in a church service in Louisiana claims that "the Spirit of the Holy Ghost began to cause her to dance and shout in the Spirit of Praise."  While she was dancing and praising she lost her balance and hit the floor before any of the church's ushers could reach her.  The fall resulted in an injury to her arm for which she filed a suit against the church seeking damages for personal injury and loss of consortium.
What if the youth group goes on a trip and one of the youths get injured?  To what degree is the church's action to protect the youth considered reasonable?  A mother successfully sued a church in Tampa, FL for 4.5 million when her son was injured in a ski accident.  

The legal relationship between the church and worshippers

There is a legal relationship between the church and the worshippers that attend.  It is a relationship created by facts and circumstances that are often times difficult to define.  There is no legislative handbook to follow.  Common sense and good leadership go a long way in reducing the chances of injury to someone attending a church function.  While you cannot plan for every potential circumstance, let me give you three indicators that you need to perceive that define a legal duty to protect worshippers:

• Special relationship:  Is there a special relationship between the church and the person in attendance?  In Beaudrie v Henderson, the court ruled that there is generally no duty that obligates one person to aid or protect another unless there is a special relationship between them or some special circumstance.  You have to define or know whether there is a special relationship or circumstance that obligates the church to not only create a safe environment but also provide protection from injury.
  
  The common argument used in lawsuits where the person is "slain in the Spirit" and hits his/her head on the floor relies on a court ruling in Dykema v Gus Macker Enterprises.  This case is important because in essence you must ascertain if the worshipper  "reasonably entrusted himself to the control and protection of the church, with a consequent loss of control to protect himself."  See the third bullet point below.
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• Likeliness of injury:  This one is a little less grey than the special relationship.  In this case, the church must use common sense to detect the potential of harm that an event or certain approved church function can cause.  One example which is on the rise in charismatic circles is the act of very expressive worship which at times results in people running, jumping, dancing, tripping and stumbling over each other.  While we do not want to quell freedom of expressive worship, serious injury is much more likely to occur in this environment.  Churches need to ensure that proper personnel are trained to look for potential collisions and accidents and make their best efforts to intervene.
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• Caution on what you say:  In the case where a Michigan woman sued her church for letting her bump her head during an alter call; she presented evidence to the court from a sermon that was recorded.  When the pastor made the alter call he said to the congregation not to fear being slain in the Spirit because they train their ushers to catch you if it happens.  This special circumstance bound the church to legally protect her from injury while responding to the alter call because of what the pastor said through the pulpit. The argument lies in what the pastor said.  He announced that the ushers were there for the worshippers protection, to entice or increase the number of people who would respond to the alter call.  Because of that announcement, she no longer had control or ability to provide her own protection.

 What to do today to prevent major loss

As I mentioned earlier, your church cannot plan for every possibility.  However, it can do certain things today to reduce the chances of someone getting injured in service and it can also prepare an asset protection strategy to mitigate loss if it were to get sued.   Below is a list of three things you can do.

1. Create an alter ministry policy:  Like it or not, not everyone that responds to an alter call has good intentions.  Your ushers should be trained on how, when and where to lay hands, catch, communicate, manage people traffic, address modesty issues, and handle emergencies.  This policy alone can save your church from a potentially disastrous lawsuit.  AT STARTCHURCH WE HAVE AUTHORED SUCH A POLICY.  We are giving it away free of charge to anyone who registers and attends one of our conferences. 
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2. Get a good liability insurance policy that covers the right people:  The number of churches and ministries that do not have an insurance policy of any kind is a surprise in itself.  Though many pastors know of the real possibilities that exist in today's litigious society, they see insurance as an expense that brings no benefit.  I see it differently.  It is an asset, because it protects the wealth and prosperity of the church.  When getting a general liability insurance policy, make sure that the policy covers the board of directors, employees, and church volunteers, including members. 
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3. Create a holdings corporation:  A little known section of the law exists that was specifically created by Congress to allow non-profit organizations and churches to protect their assets.  A holdings corporation is created under section 501(c)(2).  It is a corporation that is created, controlled and owned by the church.  Its only purpose is to hold title to the church's real property.  The holdings corporation does not do business with the outside world and therefore cannot be sued.  Because the church's real property is now in the name of the holdings corporation, if the church ever got sued, it could not lose its real property because the church technically does not own it.  The great thing about a holdings corporation is that the IRS recognizes it as a tax-exempt organization and you can still enjoy the property tax exemption