10 Foundations of Church Financial Integrity: A Checklist
In today’s environment, the need for churches to operate by the highest standards of financial integrity has never been greater.
Ready to assess where your church stands? Use the ECFA checklist below as your guide in addressing 10 foundational areas that are key to operating with excellence and integrity.
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25 Questions When Planning a Missions Trip During a Pandemic
With travel at the center of overseas missions work, the pandemic’s continued certainty is raising questions about when and whether to cross borders to continue the work.
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3 Key Reminders for Churches During a Financial Crisis
As the church, we are facing a lot of new challenges as we try to encourage and minister to our staff and congregation, reach out to our community, and manage internal concerns over finances and ministry continuity.
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5 Things Christian Organizations Need to Know About Picking a Healthcare Plan
Christian organizations should consider these five factors when choosing a healthcare plan for their employees.
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7 Ways to Avoid a Financial Train Wreck -- The Church Network
The clear communication and understanding of church finances is a key to avoiding a financial train wreck and helping a church be a positive witness for Jesus Christ.
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9 Strategies for Overcoming Financial Challenges
Nothing in our lifetimes compares to the season of financial uncertainty that arrived so suddenly. Here are nine very practical ways we are seeing the most effective ministries overcome financial obstacles.
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Accountable Expense Reimbursement Plan - Sample Resolution for Churches
Sample wording for an accountable expense reimbursement plan resolution for churches
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Accounting for Contributions Made to Nonprofits
Outlines the proper accounting treatment for contributions made by an organization to a nonprofit
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Agency (or Custodian) Funds
Outlines proper accounting treatment for non-gift assets an organization receives that are not legally its property, known as agency funds
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Aim for Faithfulness Rather than Results!
What are we aiming for? Or in plain terms, how do we define success? From our research, church leaders typically define success along one of two lines.
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Annual Offering Steward Information Sheet
Periodic commitments are appropriate from those who count church offerings concerning confidentiality and other issues. This is a sample commitment form.
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Audit Committee Questions for Auditors
List of questions that a board of directors or audit committee should annually ask their auditors
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Authentic Leadership: Balancing Doing and Being
"Lack of a deep root system is one of the key reasons why high-profile leaders fail."
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Auto and Other Business Expense Reimbursements
Tax rules make it very important for full reimbursement of business transportation, travel, and other business and professional expenses.
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Board-Designated Net Assets
Unrestricted net assets subject to self-imposed limits by action of the governing board, e.g., future programs, investment, contingencies, purchases, or construction of fixed assets, or other uses.
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Bridging the Development and Finance Divide: 4 Pillars of Healthy Communication for Ministries
<p>Perhaps the most critical relationship to funding success in a ministry is between the Development and Finance departments. When there is alignment, the ministry can <strong>take advantage of growth opportunities</strong>, <strong>make better decisions</strong>, and <strong>effectively </strong><strong>advance its mission</strong>.</p>
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Building the Oil Supply and Stocking the Storehouse
Dr. John Zietlow outlines a strong biblical basis for carefully devised financial policies and establishing adequate cash reserves. As he says: “Financial health is a prerequisite for mission achievement. As you begin to build or rebuild your oil supply and stock or restock your storehouse, take confidence that God is your Source and He will supply all of your needs according to His riches in Christ.”
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Can Teachers Qualify for Minister's Taxation?
In the Internal Revenue Code, Congress has provided ministers with unique tax attributes.
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Cell Phone Usage
This document provides cell phone usage information for a ministry, including a summary of the tax rules relating to cell phone expense.
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Check-writing Procedures
Specific internal control procedures to follow when writing checks to best protect the assets of an organization and includes a list of publications that contain more information about disbursement controls
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Church Cash Reserves—How Much Is Enough?
Cash Reserves: How Much Is Enough? (Published in The Church Network Insight magazine.)
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Church Compensation Comparative Data
At least every few years, a church should review comparative compensation data for the senior pastor's position.
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Church Internal Control & Internal Audit Guidelines
An effective system of internal controls includes the segregation of responsibilities involving financial activities
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Churches and the Support of Missions
For many churches, supporting missions is an important part of the work they are called to do. And for such churches, an important issue is the proper handling of funds expended from the mission budget. This document assists churches as they consider how to support missions.
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Considerations for Your Church’s Fiscal Year-End
If your church uses a fiscal year-end of December 31, you may want to consider changing it to May 31, June 30, July 31, August 31, or September 30.
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Contributed Services and Use of Facilities
Outlines the accounting treatment, income tax treatment, and Form 990 presentation rules for contributed services and use of facilities
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Contribution Sample Policy for Churches
A church may have an underlying sense that some contributions should be carefully reviewed before accepted.
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Could Your Church Use an Accountability Tune-Up?
While solid financial accountability systems take extra effort, they are important tools.
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Countdown to Retirement
The Countdown to Retirement document will assist ministers in making timely decisions that ensure a comfortable retirement.
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Current Assets and Current Liabilities
Defines and lists examples of current liabilities and current assets according to authoritative accounting literature
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Directors and Officers Liability Insurance
Discusses importance of director’s and officer’s liability insurance and important policy characteristics
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ECFA - Borrowing Restricted Gift Balances
Q. Our church finances have trended downward and we borrowed $20,000 from the unused balances of giver-restricted funds. This has caused some controversy on the church board. What is your counsel?
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Educating Yourself About Church Vendor Fraud
Churches—particularly larger ones—are candidates for vendor fraud. In this article, Jason Anderson, CFO of a large church accredited by ECFA, Living Word, Mesa, AZ, provides his excellent insights on how to evaluate how vendor fraud may happen in churches.
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Embracing Accountability and Integrity
Embracing Accountability and Integrity (Excerpted from Integrity at Stake by Rollie Dimos; Pg. 41-44)
One of the most important steps leaders can take to prevent fraud from occurring in their church is to embrace accountability and integrity and decide these are nonnegotiable values in the church. This means practicing what you preach and modeling biblical stewardship.
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Employee Compensation and Tax Planning Considerations for Pastors
There are a number of employee compensation components churches can consider for pastors.
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Employment Eligibility Verification
All employers must complete Form I-9 to document verification of the identity and employment authorization of each new employee.
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FASB Accounting Standards Update – Leases (Topic 842)
In 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) which significantly affects financial statement accounting for leases.
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Financial Advisor
Looking for a financial advisor, or just looking for where to start? Check out these resources from our friends at Ron Blue Institute.
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Financial Integrity as the Foundation - Interview with Dan Busby
Financial Integrity as the Foundation - Interview with Dan Busby
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Financial Management Sample Policy and Procedure Handbook
Sample Financial Management Policy and Procedure Handbook for Churches
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Finding Church Management Software to Fit Your Needs
With dozens of Church Management Software (ChMS) options available, finding the best solution for your ministry can be daunting. Ministry Business Services, Inc. has researched 39 of the top Church Management Software programs and offers a comprehensive and unbiased compilation of what each platform offers, as well as general information on what to look for in choosing a management solution for your church or organization.
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Four Questions to Ask About Executive Compensation at Your Organization
Nonprofit organizations need to attract and retain qualified leadership.
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Fraud in Ministries: Real Examples and Red Flags
Ministries can implement a few simple internal controls to remove temptations from employees and protect resources from misappropriations.
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Fraud Prevention Checklist for Churches
We hear about church fraud in the news, but we don’t want to consider it as a possibility in our congregation.
While this short summary is not meant to be all-inclusive, it will help you assess your current situation and determine if additional precautions or considerations may be necessary to protect your church.
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Gifts to Church Staff
Churches often make gifts to employees to show appreciation for the dedicated service. These payments may take several forms and have important implications to the church, the staff members, and donors.
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Going Concern Contingencies
Defines going concern contingencies as the inability of an organization to meet its obligations as they come due, and outlines the conditions that lead to a going concern audit opinion
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Granny is Still Investing in Bitcoin – It Pays to Be Ready When She Wants to Donate Some to Your Organization
Granny is investing in Bitcoin. She might not understand exactly what digital currencies are, but she’s been making money from her investments.
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Guidelines for International Grant-Making
Outlines the proper procedures and due diligence when making grants to international organizations
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Handling Gifts of Digital Currency - What Churches and Ministries Need to Know
Churches and ministries should provide gift acknowledgments for gifts of digital currency as is appropriate for any other noncash gift. Donee organizations may be asked to sign Form 8283 and may be required to File Form 8282 in connect with gifts of digital currency.
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How Is Your Church Leveraging Its Compensation Dollars?
Many churches have not leveraged compensation dollars for their staff to the fullest extent possible. Why? It is work, but it is worth it!
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How to Best Communicate Open Enrollment to Your Employees
When communicating healthcare plan enrollment information to employees, consider these strategies to engage and educate your team in a clear and effective way.
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How to Ensure Your Church Bookstore Is Tax Exempt
Church bookstores can be wonderful resources for attendees as well as the church.
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In the Budget? That Doesn’t Necessarily Mean You Can Spend It
You have heard it said before — “cash is king.” But what does that really mean? Can you be “budget rich” but “cash poor”?
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Independent Auditor Sample Request for Proposal (RFP)
Sample request for proposal can be used by ministries to request proposals from independent auditors to perform the ministry’s audit
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Internal Controls – Action Steps to Excellence
Internal controls are the procedures and practices that help churches achieve their mission. They promote efficiency, reduce the risk of loss, help ensure financial reports re accurate, and assist is maintaining compliance with laws and regulations. Sound internal controls also help churches avoid patterns of mismanagement that could bring dishonor to God.
Internal controls are not a “one-size-fits-all” matter. This is why a generic set of controls will often place too much focus on some areas and provide too little attention to other areas. Internal controls should be risk-based—with a focus on areas with the propensity for risk.
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Investment of Permanently Restricted Net Assets in Real Estate
Discusses the propriety of investing permanently restricted net assets in real estate
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Is Your Church Budget Useless?
That may seem like a strange question coming from someone committed to faithful administration of Kingdom resources.
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Is Your Organization Ready for the General Data Protection Regulation?
The General Data Protection Regulation, or GDPR, went into effect on May 25, 2018 and many nonprofit organizations don’t realize they could be impacted. The GDPR is a set of laws enacted by the European Union (EU) to protect individual rights to privacy and control over personal data.
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Meals and Lodging Provided to Employees
When an employer provides meals and housing for employees, it is important to determine whether the value of the meals and lodging is taxable to the employees.
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Minimizing Income Taxes For Church Employees
One of the many responsibilities church boards face is that of minimizing income taxes for their church employees by appropriately structuring their compensation packages.
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Overhead Assessments on Restricted Gifts
What limitations does a ministry have when applying an overhead assessment on restricted gifts?
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Paying Counseling Fees for Employees
Outlines the proper tax treatment of counseling fees paid by an employer on behalf of its employee(s)
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Permanently Restricted Net Assets
The part of net assets for a nonprofit organization that is restricted in perpetuity by donor-imposed stipulations.
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Personal Use of Church-Owned Vehicles
Vehicles provided by churches to employees for business use are often used for personal purposes.
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Personal Use of Ministry-Owned Vehicles
Vehicles provided by organizations to employees for business use are often used for personal purposes.
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Recording Income from Estates
Explains the proper accounting and recognition criteria for estates contributed to nonprofit organizations
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Restatement of Prior-Period Financial Statements
Any error in the financial statements of a prior period discovered subsequent to their issuance should be reported as a prior-period adjustment by restating the prior-period financial statements.
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Sample Policy on Suspected Misconduct, Dishonesty, Fraud, and Whistleblower Protection
Sample policy for whistleblower protection
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Should the Government Be in the Business of Taxing Churches?
This article by Michael Martin, ECFA Vice President, was written for Regent Law Review.
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Social Security Tax for Ministers – More Complex than it Appears
Social Security Tax for Ministers - More Complex than It Appears
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Standard Mileage Rates
The Internal Revenue Service (IRS) establishes the optional standard mileage rates for employees to use in computing the deductible costs of operating an automobile for business, medical, or moving expense purposes.
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Tax Treatment of Scholarship and Fellowship Payments
Discusses the proper tax treatment of scholarship and fellowship contributions and payments
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The “New” Form 1099-NEC and Revised Form 1099-MISC
A new 1099-NEC form has been introduced by the IRS for 2020. It is actually an old form that hasn’t been in use since 1982.
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The Audit Oversight Process
Details adequate financial oversight and how it is one of the central responsibilities of effective board governance
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The Importance of the Annual Church Audit
Good accounting records and good stewardship go hand-in-hand. Your church is the trustee of the money it receives—handle it carefully. An annual audit of a church—either external or internal—is vital.
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Tithing Charity Funds
Discusses issues relating to a ministry tithing a portion of its funds to another ministry and includes link to a tithing policy
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Underwater Funds
A fund in which the principal amount (corpus) has fallen below the value of when originally gifted by the donor.
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Underwater Funds Rule
Under UMIFA, an organization was prohibited from using fund assets if the value of the fund was below its historic dollar value.
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Viatical Investments
Defines and discusses issues relating to viatical investments, investments by an organization in an individual life insurance policy
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When Is It Appropriate to Make an Overhead Charge to a Church Project?
When a church raises funds for a project—let’s say a building fund or a campus expansion fund—is it appropriate to make an overhead charge to the project? In other words, is it appropriate for a church to allocate a portion of the funds raised for the project to cover general and administrative costs and any costs related to raising the resources with the total raised less the overhead allocation used for the project?
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Why Accountability Matters
Why Accountability Matters (Excerpted from Integrity at Stake by Rollie Dimos; Pg. 19-21)
Oftentimes, I meet church leaders who are fearful of making their financial activity accountable and transparent, and many times, control of the church’s finances is limited to one or two individuals. In a best-case scenario, this is simply an honest but naïve mind-set, believing that finances are better controlled when fewer people are involved. In a worst-case scenario, this is a deliberate attempt to conceal poor stewardship or abuse. It’s the worst-case scenario that will ruin a leader’s ministry, destroy a church, and shatter people’s faith.
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Workers’ Compensation Laws and the Local Church
Work-related injuries or illnesses among church employees are not as rare as some think. Workers’ Compensation laws are designed so that benefits for a work-related accident, injury, or illness can be paid promptly without the need for expensive legal fees to determine fault. Unless specifically exempted by law, church employers are subject to Workers’ Compensation laws.
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You're a Church Treasurer
You’ve been asked to fill the role of treasurer at your church, and you have questions. Knowing how to manage your church’s finances and communicate to leadership, staff, and congregants is critical to effectively serving as church treasurer.
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