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Church Finance and Resource- Test 2
Terms in this set (60)
What is a minister considered for Social Security purposes?
What is the greatest benefit that the government allows for ministers?
What types of actions are required by the board in relation to housing allowance and when must these actions be taken?
Housing Allowance requires Board Action in December for the Following Year and January for the Prior Year
How much of a pastor's pay can be designated as housing allowance?
Up to 50%
What percentage does a minister have to pay for Social Security?
Should auto reimbursement be considered as part of the pay package for ministers?
What is the auto reimbursement rate allowed for 2012?
51 or 55 cents
Render unto Caesar what is Caesar's and not...
One Penny More!
What is a double deduction?
Receiving both a Housing Allowance and counting interest on a mortgage/real estate as deductible.
Do ministers pay Federal Tax on their housing allowance?
Do ministers pay Social Security on their housing allowance?
What method does the IRS want ministers to use in reporting church income when working for a church? W-2, Schedule C, Form 1099?
What is the 1040-ES and what is it used for?
It's a tax form that is used to estimate taxes for the year and send in quarterly payments
What type of income should a minister enter on Schedule C in relation to ministry?
Weddings, Funerals, Special Speaking Events, Honorariums
What is a justifiable reason for ministers opting out of Social Security?
Conscientious Reasons - usually only Amish, Mennonites and Catholic priests/nuns will qualify
Know one definition for vision.
"Vision is a clear mental picture of what could be, fueled by the conviction that it should be."
What are 5 vision killers according to the class presentation?
(1) Tradition (2) Apathy (3) Insensitivity to Times (4) Fear (5) Stereotypes
What are the three learning curves that Hybels presents us with?
(1) God is the Ultimate Supplier
(2) Under the Right Circumstances, People Love to Give
(3) Funding Ministry Proves the Character of a Leader Like No Other Challenge
Know the 5 principles of raising and allocating resources according to Hybels.
(1) Resources and Education Principles
(2)Resources and the Information Principle
(3) Resources and the "KISS" Principle
(4) Resources and the Principle of Strategic Discipling
(5) Resources and the Vision Principle
What do people get fired up about?
What does ECFA stand for?
"Evangelical Council for Financial Accountability"
Why is accountability important to an individual, a church . . .?
Responsible Stewardship and Other Organizations Failures
What does 501 (c) 3 designate?
It is a poor reflection on the kingdom of God when...
people assume that businesses of the world need to be responsible for their accounting system but yet that the church is somehow exempt.
When funds are given to a church, they must be used...
for the purpose for which they were collected.
What are the three principles to be followed to insure that no one individual can control the finances and accounting system?
Why is credibility important to the handling of money in a church and what should the qualifications be for those who will handle the money?
It's important because of the Power of Trust. Consider using the Deacon list from 1 Timothy 3. Put a system in place that seeks to not allow the wrong people to surface. Then you don't have to backpedal, it is harder to remove a person when they are already installed without tension.
Why are "lone rangers" not allowed in the handling of church funds?
for accountability reasons
What is the principle of 2 and why is it important?
It is part of Accountability, having 2 people count at all times.
Why should deposits on church funds always be made intact and what does this mean?
For Tracking Purposes. If you need petty cash, first deposit the check intact and than withdraw a petty cash fund, do not take money from the sum before it is accounted for in the banking system
Pollock gives 3 key procedures in the disbursement of funds in relation to preparing, purchasing and signing in a church. What are the procedures?
1. The same person who approves the purchases should not prepare the checks for payment
2. The individual who prepares the checks ideally should not be in a position to sign them.
3. The check signer should not complete the circle by approving invoices for payment
Why is it wise to establish limits on how much an individual in the church can spend?
So that there are Checks and Balances for everyone.
What are 3 reasons for using envelopes in the church?
1. It helps the giver develop consistent giving patterns
2. It provides a clear statement of the givers designation of funds
3. It helps provide a system for the counters to follow in appropriately recording figures
What does a budget force a church to do?
Force a department to sit down and ask "what is it that God wants us to plan for and do in this next year."
What are the 3 looks in developing a budget and what is being asked with each?
1. Past - What has happened? Did it work?
2. Present - What is happening? Is it working?
3. Future - What needs to happen? How can it work better?
How much money does building programs normally shift from the General Fund?
18%-25% of giving
Why should drivers of church vans be cleared?
To help churches maximize everything. Clearing drivers needs special attention and a master list needs to be closely adhered to.
In what ways can keys become an issue in churches?
Churches can find that security is breached because of a lack of controls as to who has access to the facilities.
What is the minimum of liability insurance a church should have?
1 Million Dollars
What is the average salary and housing allowance for Southern Baptist pastors?
What percentage of pastors feel fairly paid according to this study?
7 in 10 (70%)
What percentage of pastors is said to opt out of Social Security?
What is happening with pastor's pay and church attendance according to the Barna study?
Pastors are more and more getting paid better, but church attendance is not changing.
6. What is the median pay for pastors according to Barna in his May 2002 release?
What relation does Seminary training have on pay according to the Barna study?
38% more income that those without Seminary training
What are the least compensated groups according to the Barna study and how far do they fall below the national average?
Charismatic and Pentecostal Church - 16% less than the national average
How should the two forms on pages 19-20 to be used, when, and what does the church board have to do with the forms?
Housing Allowance Forms - Church Board approves in January for previous year and in December for preceding year.
According to Richard Hammar, what is the primary qualification for one to opt out of Social Security?
Ministers must certify that they are opposed on the basis of religious convictions to the acceptance of public insurance benefits (including social security and Medicare)
In class, the primary reason given for ministers opting out of Social Security was...
not wanting to pay taxes...not a legit reason.
What takes the largest part of the Church budget and what is the percentage?
Staff Compensation - 40%
What takes second largest part and what is the percentage?
Building Costs - 20%
What is the average percentage of income that goes to missions from church budgets?
What is the suggested percentage that sustaining costs should not exceed?
85% (although 75% is preferable)
What does the percentage of missions giving reveal about churches?
That churches aren't really committed to spreading the Gospel .
What are 5 ways suggested for Budget Builders?
1. Lead with vision
2. Start new every year
3. Use it as a tool
4. Report on it
5. Support it with stewardship training
What is Bartholomew's advice concerning churches borrowing?
Always pay cash as far as possible. Then, careful responsible borrowing and maintenance of the financial obligation are legitimate. He finds no scriptural prohibition to such.
What are the three conversions that Martin Luther noted?
1. The Mind
2. The Heart
3. The Pocketbook
When does the church have the right to say no to the government?
Acts 4- Then they called them in again and commanded them not to speak or teach at all in the name of Jesus. But Peter and John replied, "Which is right in God's eyes: to listen to you, or to him? You be the judges!
Why are ethical standards important to a church?
Questionable practices, exceptions for people, consistency in organization, will others see gaps, ethical procedures based on biblical principles.
What is responsible fund raising for a building program?
Responsibly raise money, biblical principles, vision, not allowing to become the focus of the church.
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