With the new year just ahead, it’s the perfect time to set new priorities for your church or ministry, vision cast, and set expectations of what is to come. Practically, now is the time to fortify your ministry’s internal structure.
There are three focuses to center on for the new year: finance management, organizational growth, and organizational compliance.
Finance Management
A great way to start 2022 is to solidify your finances. Whether by setting a new budget or moving your finances to a ministry bookkeeper, keeping your finances healthy and compliant will be key in starting off the new year right.
For creating your new budget, start by determining your income for the next year. Then assess your expenses for the following year. To finish, focus on your budget expenses. We delve more into this topic in a previous blog here.
In addition to solidifying your finances through creating a new budget, you can outsource your financial management to ministry-minded bookkeepers.
Managing church finances can be overwhelming. There are specific rules that apply to nonprofits, which can get confusing. Church bookkeepers, however, stay abreast on all compliance rules for ministry finances, offer wisdom for unique ministry challenges and situations, and help churches and ministries save money in the long term. They offer unbiased financial advice, monitor a church’s progress, protect financial assets, and more.
Organizational Growth
Another way to start the year off right is to expand your organization. You can do this by establishing a For-Profit Arm, a Community Development Corporation, or a personal ministry.
You can start a business or a nonprofit that focuses on an area of ministry that your church is passionate about.
A for-profit arm is another term for a church-owned business. Not only is a church-owned business a great way to share the Gospel, but it is also an excellent source of additional income for the church that is outside of tithes and offerings. We loved talking about this topic in a previous blog post here.
A community development corporation is a nonprofit organization established to serve the community and relieve the burden of the government. A community development corporation could be a homeless shelter, a food pantry, or a thrift store. This kind of nonprofit can be religious or secular. Some churches establish secular community development corporations to apply for grants from the government and other businesses. We talk about the process of establishing a community development corporation in this previous blog.
A personal ministry is a nonprofit established in the founder’s name. Many pastors will create a personal ministry to own the content they write or preach and travel and speak in various environments. They make a personal ministry to pursue their personal goals while still being a part of their church.
Creating a personal ministry not only grants more freedoms for personal goals but also provides opportunities for generating a second income, creates another platform for ministry, and allows for specific tax benefits.
Organizational Compliance
Making sure your internal structure and documentation are compliant is a great way to ensure your ministry starts off the year on a sure foundation.
There are several steps you can take to ensure your organization is compliant.
• Take an internal audit: One of the best ways to begin to tell if your organization is compliant is to do an internal audit. We have a 53-point compliance audit your church or ministry can go through to see if you are within IRS compliance.
• Prepare for your annual board meeting: This board meeting is a time to discuss important issues, such as board members, compensation agreements, housing allowance, and more. We have software dedicated to helping you with your board meeting minutes.
• Review and adjust your policies: The world is ever-changing, and so are your policies. Churches now more than ever need to have a social media policy, remote work policies, and accountable reimbursements. With the changes, your church should always work to keep your policies up-to-date.
• Review filing requirements and annual reporting for your state: Depending on your state’s filing requirements, you may need to file a report with your state every year. Failure to do so may result in dissolving your church or ministry. So stay up-to-date on what is needed for your state to remain operational.
• Review your 501(c)(3) status: One of the most gut-wrenching moments is discovering that you no longer have your 501(c)(3). This typically happens when specific reports are not filed, or an organization is no longer operating in compliance. One of the best ways to make sure you aren’t surprised by this later is to check the IRS Publication 78.
First published on StartChurch.com. Used by permission.