The Bureau of Labor Statistics’ Consumer Expenditure Survey in the year of 2008 calculated the average annual contribution of Black households to religious organizations was $683. With well over 9 million Black households in America, that means well over $6 billion in 2008 was contributed to Black churches across the country. What is done with this money and are the churches doing all they can to make sure this money is fruitful?
In the year of 2008 I spoke with over 80 pastors in the NYC area to discuss how they can more effectively use their church as an empowerment vehicle these are just a few of my findings…
∙Pastors who couldn’t even tell you what their phone bill was for the past 3 months, let alone give a good record of the uses of the tithes and offerings they accumulate weekly.
∙Churches that remain boarded up 6 days per week only to open on Sunday for a 2 hour service then close again while a perfectly good space goes unutilized by the community throughout the week.
∙Pastors so concerned about not losing membership to “competitors” they refused to partner with other churches in the community on any projects.
Yes, I have A LOT of complaints about the Black church as I am sure many people do. There are a few scattered measures of success of churches that have done well in creating pockets of empowerment within their community such as Allen AME in Queens, NY; Abyssinian in Harlem, NY; Hartford Baptist Memorial in Detroit, MI; and more.
Financial stewardship is not for the benefit of oneself, but it is for the benefit of putting oneself in a stronger position which will enable one to be a stronger blessing to other people. I have compiled a list of tips for the Black church to follow.
Drop the flashy imagery -The material things you purchase sends a message to public whether you like it or not. Yes…you may be able to afford the nice car, but do you really need it? I believe that Jesus was rich by worldly standards of His time but he didn’t live like he was rich. There is nothing wrong with a pastor getting a decent salary because the word says in 1Timothy 5:17, “Let the elders that rule well be counted worthy of double honor, especially they who labor in the word and doctrine.” However, that doesn’t mean to take that salary and purchase the most expensive car on the lot. What if Jesus came to heal the blind man or feed the poor driving a Bugatti? Jesus clearly understood that just because he had it didn’t mean he had to flaunt it as there were better things to do with his capital. Also, there are many who feel negatively towards a pastor who seems to be flashy…why are we giving Satan more ammunition to use against the church? I am not saying you have to drive an old beat up “hoopty” but perhaps the latest and flashiest fully loaded BMW might be a bit much.
Lead by example to not covet possessions: And he said to them, “Take care, and be on your guard against all covetousness, for one’s life does not consist in the abundance of his possessions.” Luke 12:15
Stay humble: “For every one who exalts himself will be humble, and he who humbles himself will be exalted.” Luke 14:11
Partner with other churches – Churches that refuse to partner with other churches are going directly against the word of God. You mean to tell me that with four churches on the same block we can’t combine them into two churches and use the other two buildings as a day care center and the other as a franchise both of which will create employment opportunities? We can’t do this unless the leaders of each church drop their guard of competition and work together. One of the initiatives I was trying to push with the smaller churches was to coordinate program schedules and leverage the membership of each church to jointly market programs. Instead of 3 events by three churches held on a Saturday with a divided community, how about one event sponsored by three churches held on a Saturday with a united community and thereby more people? None of us is as strong as all of us and for churches to continue to try to build as if they are alone in the community is irresponsible and not effectively leveraging the strongest community in the community…US! No more competing against each other… we must start completing each other! You might not be a megachurch, but through effective partnerships with other churches in the community you can develop the same ability to have the impact of a megachurch.
Unite with other churches to maximize potential: “Live in harmony with one another. Do not be haughty, but associate with the lowly. Never be wise in your own sight.” Romans 12:16
Build your network of professionals/experts and pay them – Right within your membership and/or community you have many talented professionals who are providing the services you need to purchase to make your church more efficient. The church needs help to operate and too many times we get trapped in this poverty mindset. What services have you forgone because you are too afraid the membership will be upset they don’t get their after church lunch that you pay for out of pocket? Perhaps you can sell the food to the membership?
Use the experts in your community to have them provide free workshops for your membership. This works twofold because they get to market their product or service expertise and build their business, and you get to educate your membership. Have lawyers in the community provide legal seminars, financial planners provide financial literacy workshops, local restaurant owners provide free cooking classes, and so forth. “As iron sharpens iron, so one man sharpens another.” Proverbs 27:17
Seek expert advice in your community that can help your church grow – “Where there is no guidance, a people falls, but in an abundance of counselors there is safety.” Proverbs 11:14
Support their business by paying for their expertise – “You shall not oppress your neighbor or rob him. The wages of a hired servant shall not remain with you all night until morning.” Leviticus 19:13
Get your books in order – I understand that for many churches being granted a 501(c)3 status means they can avoid paying taxes, but if this is all this means to you I promise you there is a lot of money you are leaving on the table you could be earning. One of the reasons United Way and other larger organizations are able to get so much funding is because funders can trust them to spend their dollars responsibly. This trust comes only from sound records and financial statements. So hold up on that minor church renovation and use those funds to pay a community CPA to help you produce professionally audited financial statements. Pass these statements out to your membership and publish records of your spending for all people to see as transparency is one of the fastest ways to get REAL funding that will last.
Financial statements are the key to your church raising REAL funds for your programming: “But all things should be done decently and in order.” 1Corinthians 14:40
Create effective programming that will keep your doors open more than one day per week – One would be hard pressed to think of a successful business model that states the business can remain viable by remaining open only one day per week. Your membership wants to be active and it is up to you to create methods of keep them active multiple days per week. Tutoring services for youth, day care services for single parents, and/or renting out the space for other businesses to conduct empowerment programming are three simple ideas OUTSIDE of the standard Bible study that all can generate income and cause the membership to view the church as a more vital resource to the community. There should be something for your membership to do in your church every day.
If your books are in order you should hire a grant writer to go after funding for the programs you are conducting. Most will agree that you should create a separate nonprofit entity that operates separately from your church to go after major funding outside of tithes and offerings. Hire an attorney from your church to assist in the establishment of this separate business entity.
Keeping your church busy during the week is vital: “Through sloth the roof sinks in, and through indolence the house leaks.” Ecclesiastes 10:18
Leverage the land you own – If you own your church outright you have more power than you know. This is especially where partnerships become important. I remember a conversation I had with a pastor who stated he couldn’t afford to purchase a $2 million building. He tried to raise the capital but failed. The building was purchased by an organization that is from outside of the community. I told that pastor if he has partnered with another pastor from the community who also owned his own church they could have purchased the property jointly. Now instead of the vision of a much needed community center in the community there lies a vision of a business of someone who doesn’t live in the community.
Land leveraged properly from the bank can do the following:
Build real estate projects for the community using your membership as the builders thereby creating jobs for your membership. I have helped thousands find employment by connecting them with local organizations that provide free training in the field of construction…many of which were formerly incarcerated. Your church can help those in the community who are properly trained to find jobs on the construction site you created through your development. Allen AME church in Queens, NY has done a tremendous job of this as at one point amassing over $100million in real estate assets and were at one point the largest employer in Queens, NY!
Starting a franchise or multiple franchises for your community. Those who will run and operate the franchises could be from your church thereby creating jobs for your membership. Hartford Baptist Memorial in Detroit, MI has done a great job of this.
Building a charter school in your community which reflects the values you want to be taught to the youth in your community. Perfecting Church of Detroit, Michigan has done a great job of this through their opening of the Marvin L. Winans Academy of Performing Arts, which opened in 1996.
Building assisted living facilities, day care centers, and many other ventures are possible through the effective use of leveraging the property owned by the church. The community is waiting on your church to lead by example: “Not domineering over those in your charge, but being examples to the flock.” 1Peter 5:3
Set up an effective investment strategy – It could be time to make some people mad by cutting costs. The church should have an effective money management strategy that covers three phases of expenses.
Zero to one years of operating expenses: Should be invested in cash and cash equivalents.
One to five years of operating expenses: Should be invested in a laddered fixed income strategy to outpace inflation and retain some degree of liquidity.
Five years plus of operating expenses: Should be invested in conservative investments that have slightly more risk but give you a slightly larger yield such as corporate bonds or large cap stocks with a dividend yield. Be careful here as you do not want to take on too much risk. The goal of your investment strategy should not be to make the church get rich, but rather to conserve its capital responsibly while earning a return that outpaces inflation and compounds.
If your church is large enough you might be able to hire an asset manager ($500K to $1 million in assets or larger before most will work with you). If your church is small hire a financial advisor from your church or community to assist you in this process. Check out my book “Living in the Village” (www.livinginthevillage) to learn how to select the right advisor. When all said in done the strategy you choose for your church should do the following:
1.Conserve your principal
2.Appreciate your capital to at least outpace inflation
3.Minimize your risk
4.Minimize your taxes (if you have established an external company that is not exempt from payment of taxes. Hire a corporate attorney from your church to ensure that you have set up all of your legal entities properly.)
Churches must be faithful with the capital entrusted to them: “If then you have not been faithful in the unrighteous wealth, who will entrust to you true riches.” Luke 16:11
Time to get an endowment – A church endowment is a must because your church and the finances of your church should outlive you. There are many churches that have endowments so large they could operate solely from the interest earned on the endowment investments and could feasibly never take another tithe or offering yet still be operational. Hire an attorney from your church to establish and structure an endowment fully loaded with a separate board. Consider also hiring an insurance agent to discuss options of funding this endowment with various types of insurance policies (life, annuity, etc). This should be done with extreme council to ensure those who are contributing to the endowment are also being responsible and you are not simply padding the pockets of an insurance agent who is looking to make a hefty commission.
Your endowment board should consist of multiple people who are within the field of finance to ensure the proper management of the funds and can give an objective and unbiased perspective where there is no conflict of interest (i.e. an insurance agent, an attorney, a banker, an established entrepreneur, etc.).
The endowment will make sure the funds of your church outlive you: “A good man leaves an inheritance to his children’s children, but the sinner’s wealth is laid up for the righteous.” Proverbs 13:22
In the Black community, which has been hardest hit by this economy, we are in need of TANGIBLE solutions! The Bible states, “Thus says the Lord: ‘Cursed in the man who trusts in man and makes flesh his strength, whose heart turns away from the Lord.” (Jeremiah 17:5) It frustrates me when so many turn to the President Obama as the solution and put all their trust in him and not in Jesus Christ. As much as I am a supporter of President Obama, as much as I believe in holding him accountable, he is NOT the source of our salvation and to trust solely in him will leave us cursed!
The Bible also states, “Blessed be the God and Father of our Lord Jesus Christ, who has blessed us in Christ with every spiritual blessing in the heavenly places,” (Ephesians 1:3) The Black community seems to be in a constant waiting period. We are waiting on the President to save us, we are waiting on some inspirational speaker/leader to come to save us like the second coming of MLK…this verse says we don’t have to wait anymore. It says that Jesus Christ “HAS blessed us in Christ with EVERY spiritual blessing in the heavenly places”. This means it has already been done. Here we are waiting on God, but God is waiting on US. We have all that we need to create jobs, create empowerment, wealth for the community, business enterprise, and more. We just have to learn how to use the resources that God has given us effectively. There could be an enormous economic revival that comes from within the walls of the church if the church could just become more efficient in its management and operations. Every major problem of the Black community from low financial literacy rates, high unemployment, low educational quality, and massive incarceration can be fixed through the church at a much more efficient rate if they are managing their resources effectively.
Black church…WE NEED YOU!
“If anyone aspires to the office of overseer, he desires a noble task. Therefore an overseer must be above reproach, the husband of one wife, sober-minded, self-controlled, respectable, hospitable, able to teach, not a drunkard, not violent but gentle, not quarrelsome, not a lover of money. He must manage his own household well, with all dignity keeping his children submissive, for if someone does not know how to manage his own household, how will he care for God’s church?” 1Timothy 3:1-7
Ryan Mack is President of Optimum Capital Management and Author of Living in the Village