Give It Up Podcast

Give It Up For Financial Transparency & Safeguards For Church Leaders

November 02, 2023 Vance Roush & The Overflow Team Season 1 Episode 24
Give It Up Podcast
Give It Up For Financial Transparency & Safeguards For Church Leaders
Show Notes Transcript Chapter Markers

In this episode, we delve into the importance of transparency in church donations, especially for Millennials and Gen Z. We discuss the varying approaches churches take in communicating their financial metrics and goals, and Zoe offers a unique perspective on church tax forms. Additionally, we explore the auditing process, how to handle requests for financial statements, and innovative measures pastors are taking to ensure financial integrity.

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I update our investors on a very frequent basis, hey, this is what our goals were in the beginning of the year. And this is how we're tracking towards our goals. Those investors that feel communicated to, they feel valued. They're so happy to jump in on the new fundraising round because they feel like they know where the organization is at the very similar concept in church life. It's an exchange of value and trust. A pastor turned tech leader and a millennial churchgoer, explored the intersection of technology, culture and faith, equipping you with innovative strategies to support you as you live out your calling leader churches with confidence to step into the future together. This is the give it up podcast. Okay, Vance. So I want to talk about financial transparency in churches. Yeah, it kind of safeguards churches should put up because we've talked about in so many episodes, how millennials and Gen Z deeply cares about what they're giving their money to. And what's being done with the money. We've seen this from successful organizations like Charity Water, right? Yeah. Where they've actually tied people's giving specifically to a well, they can view live and they can view the launch of Yeah, right. That's pretty cool. compassions done it for decades, right? Where they tie you to a specific child. Yeah, I have. Actually, my, my wife and I, we recently adopted a new kid through compassion to give towards, and it's a, it's a Filipino kid actually kinda looks like my son. So that's kind of weird. Everybody thinks it's like a family photo. But it's compassion. I love that. Yeah. But on the other topic of compassion, whenever you give them a gift, whenever you give your child a gift, they send you a letter back from the kid, but they also detail exactly where every single dollar went. That's cool. And I think that's beautiful. Because that's putting so much trust in Wow, I'm impacting someone and something through that. And I have been in churches before where they share a goal. So not even a full flush vision, they share a goal. And they don't say what the deadline is, how much they're trying to raise, or updates along the way. And that's frustrating to me, to be honest, I think if a member in the church is really requesting detailed financials you've already lost actually go on. Because the thing is that the impact of the giving should be so evident. Yeah, right. It should be so evident that, hey, if you said that, you know, we're gonna give to start a new campus. People should see the new campus started. Yeah, if we're gonna give towards the building, they should see the building, right. And these things might seem obvious, and you can scale it up or down based on your context or your stage phase. Yeah, or your churches that, but it should be evident. And so if it's not evident, are we incorporating into our communications enough? Are we communicating number one, to our church enough? Yeah. are we incorporating in a way that breaks to the noise? Yeah. Is it part of the Sunday worship experience, where we do local updates, global updates on what's going on? Are we telling stories, stories, move people, that's what Captivate for sure captivates people. And so I do think that when people start getting into the line item phase of wanting to know, I need a detailed financial statement. Now, I'm not saying that you shouldn't be ready to present that. All I'm saying is, I think you've already kind of lost if that's the game that you're playing. Yeah. Well, now you have permission to respond in kind to me on this, but like, am I wrong? For wanting to if I know that a church or an organization has a certain goal? Am I wrong for wanting to know, updates of it of like, where are we in that goal? Because quite honestly, it's my competitive nature. Like I'm like, if I if there's a stretch goal, I'm like, how much more we got to go. I'm like pumped about it. You're definitely not wrong. I would say that. That is common, you know, if there is going to be a so let's, let's use a Silicon Valley lesson here. So overflow is a startup based in the Silicon Valley. We're a software company. We have investors. Yeah. What I do is I update our investors on a very frequent basis. Right? Sometimes the cadence is monthly. Sometimes the cadence is quarterly, but they can expect to hear from me anywhere between six to 12 times a year. And I specifically update them on Hey, this is what our goals were in the beginning of the year. And this is how we're tracking towards our goals. Guess what, anytime I am doing a fundraising round, those investors that feel communicated to that feel valued. They're so happy to jump in on the new fundraising round because they feel like they know where the organization is at. Yeah, it's a very similar concept in church life, right is if the only time they're hearing meaning from you, regarding finances is once a year when the church really needs money. That's probably not the best way to cultivate generosity. Yeah, right? Yeah. Because really, it's an exchange of trust. It's an exchange of value and trust, and they're gonna put a lot more value or they're gonna mock a lot more value, if they have a higher level of trust. And trust is not built once a year. Trust is built consistently across the year. Yeah. And, you know, they have websites out there for nonprofit specifically, like charity, where people are submitting input on how trustworthy an organization is. Sure, obviously, with churches, it's a different ballgame altogether. So it's completely your responsibility to show that you are breeding ground for attrition? Yeah, yeah, yeah. No, this is a hot take. I have, and we might disagree on it. And so we can talk through it, but disagree, sometimes still get along. That's right. I will say this, we disagree. But then we refine our points of view, respectively, so we can come to a point of agreement. I actually don't agree with this. The whole let's agree to disagree. I think that's actually the point of division. I think that if you are in a disagreement about something, and this is actually a church thing, right? If you are in disagreement about something, let's say it's, you know, the team with a team lead or a staff member with their pastor, or something like that you should not rest to hey, let's just agree to disagree. You should actually pursue a higher level of agreement. Yeah. So it's not wrong to disagree. But it's also not right. To stay in disagreement. Yeah. Right. You want to pursue unity. Yeah. Right. And so like, go ahead. No, I was gonna say, I heard the phrase, it's not agree to disagree. What you're ultimately trying for is agree to disagree agreeably. Oh, as in, we've come up with a common ground that even So basically, what you just did, yeah, like that. So anyways, my hot take is around 990s. Which, before I give it, can you give people an understanding of what 990? Sir, yeah. So in the 501, C, three space, charitable organizations are required to fill out and submit to the IRS a 990. It's basically an accounting and tax record of how funds have been used and how it's allocated. And things like that. churches in America have a particular you know, provision where they don't have to actually submit a nine, nine. So it's a bit of a wild wild west out there. Do you know why that is? Why did that provision happen to begin with? That's interesting. So this country was founded as a Christian nation, on Christian values. And, you know, the local church has been a part of this nation's history since the beginning. Maybe it has to do with that. I actually don't know the origin story of why that is. But yeah, that's what it is. Okay. Yeah. So honestly, the context for this is that my heart is so broken for all of these churches that are just crumbling, when it comes to a lack of accountability. Right. And so actually, the number one reason for church failure, right is actually not moral failure. Yeah, it's a failure of finances. Yeah. And Seth Godin has this brilliant turn that he calls putting yourself on the hook. Oh, and I think the same method could dare I say, should be applied in a church context is just because you don't have to submit a 990 Why not put yourself on the hook, go and put transparency, be front footed, in your transparency, and how much money is coming in? How much money is going out? Where it's going? And who it's going to? I'll take it one step further. Get your financials audited, even though you don't have to? What does that process look like? Yeah, so it actually is kind of an investment, it will take like 15 to $20,000, to have fully audited financial books from an outside accounting firm, where they will go through all of your accounting practices and your processes. And they basically write a letter saying, Hey, we've audited this organization, they handle their finances through GAAP standards, which basically is the generally acceptable accounting practices. And so, ultimately, what an audit is, is to bless the financials saying, hey, what's represented here is what is true. Okay. It's not, you know, false, or misinformation. Yeah. And so that's what an audit is. If you don't have the 15 to 20k to invest into it, even though I think it's worth it because you're being front footed. You're being proactive. Yeah. And that breeds trust. Then you can do what's called a financial review, which is much cheaper. It's a magnet to choose maybe a couple $1,000 You could hire an outside accounting firm so they don't do the full gamut of what an audit would entail. But the financial review process is better than nothing. Right? And you did do the work of getting an outside accounting firm, to look under the hood of your financials. There's also an organization called ECFA, the evangelical Christian Financial Accounting Board, which is probably one of the highest standards that certain churches in America to the 10s of 1000s of churches, at this point adhere to, again, these are all proactive measures. If you listen to this as a church, will you get in trouble that you don't do any of these things? No. But maybe we should look from a perspective of not okay, what's the bare minimum? I can do, right? But hey, where can I be proactive? Where it's going to breed trust in my organization? And actually, you know, submitting yourself to things like an audit will actually make you better. Right. So yeah, most of the time, it's not that most of the time, literally, pastors CFOs of churches, there's there's actually no ill intent. I mean, sometimes there is, but I would say that's a minority, not the majority. Yeah. Most of the time, there's no ill intent. But there might be ignorance. Yeah. And that's not to throw shade or shame. You don't know what you don't know. Right? And a lot of times when you're a church plant, you're just starting out maybe just a few years in, you don't have MBAs on your stuff. Yeah, yeah. I'm not saying that, you know, churches shouldn't have those type of people. We should we should hire top talent. Yeah. If you don't have those type of people yet. You don't know. You don't know. So submit yourself to wise counsel to outside counsel, and the area of finances go above and beyond, it'll make you better and will make your organization more trustworthy? Yeah. 100%. I agree with that. And I think the deeper principle is, you know, you've heard messages before, were they like, if God put on the screen up in front of us everything that you've ever done? What would you think, you know, like, you've heard examples like that before? scare you into? Like, are you living a biblical lifestyle? Yeah, well, those weren't the altar calls a really big thing, if you got hit by a bus tomorrow. But I mean, the concept is the same as if you're listening to this. And you're like, why don't really wanted everyone to know, well, maybe that's the first telltale sign that you should get on this, because that is how you set yourself up for success in your stewardship. Right. And that's what all this is about is is stewardship. Is everyone going to read? The Financial? What's that thing at the end of the year? The Annual Report, right? The Financial Report? Sure, maybe not. But the fact that you are willing to put it out there and say, Hey, we know that this means a lot to a lot of people, and we want to show you where it is, then I think that really would behoove the organization. And that's another way to build trust, here's a pro tip, we will offer our financial statements to anybody who requests it, that is a giver. And so there's people out there that are just wanting to, you know, be hateful. Right? And if they're not a contributor, if they're not a consistent giver, really, you know, they have no, right. Yeah. So that's a little pro tip that you don't have to make your financials just available to anybody and everybody. But those people that are supporting your organization that are consistent, faithful givers. You should make it clear, yeah, hey, there's a request process. We're happy to provide that by going through this request process. In addition to that, like I was saying earlier, if you have it, you know, it's funny, because you were saying how not everybody's gonna even read the financial statement. You know, why? Because that everybody knows how to read it. Yeah. And again, that's such a shame, but not everybody's an accountant. Yeah. And that's why I'm saying is like, that is a good thing to have. But it's actually not the main main thing. The main main thing is that your church goes above and beyond to make it evident that people's investment, people's giving is in good hands. Yeah. Because of this person's life changed because of this campus planted because we started this outreach because we responded to Maui's fire that literally is in history, one of the worst us fires that America has ever seen. Because we are active in our community, because we feed the poor because we are engaged in civic engagement because you know, so it should be so evident. Yes, it should be so evident that you are meeting the needs of the community that you are seeing people saved and discipled that you have small groups that are growing. Yeah, you know, what's healthy, gross, and so if your finances are healthy, if your people are healthy, if your staff is healthy, it'll grow and the impact should be evident. Yeah. And you know, we're obviously talking about safeguards. And I heard Mark Patterson and Rick Warren talking about ledges. Yes. And I was said to get Pastor Mark Batterson on the pod. I was always on a zoom with him the other day, and he is like the salt of the earth is the best. Yeah, in Capitol Hill. It's easy to see. Okay, make a note team marketing team, hey, expensive marketing team marketing team for Mark. So they both do a reverse type. Which means what does that mean? They are giving away 90% of the income and living off the 10. It's admirable. And I was so inspired when I heard that, that I was like, I want to make that a practice in my life and literally, like ratchet up the percentage points every year so that if I get to live this long, I'll be doing the same thing. The way that my bank account works, it doesn't work with that percentage yet. Yeah. Well, 1% is for attendance. I will say yes. But that's admirable. Yeah. But but it's just really the same thing of putting yourself in a place where you're always uncomfortable, because there's a God gap. I think that's, that's really what it all revolves around. And because we're talking about stewardship, I actually want to share this really fun fact, with the listeners, because we found this last week at the time of recording this. And we're talking about processing fees, and how we now offer the lowest cash processing fees in the industry. Yep. Which your givers would actually love to know that they love knowing that stuff. They want every dollar maximized, insofar as if you even give the option for people to pay the processing fees with their game, we added a feature, we added the feature overflow. That's so cool. And this was mind blowing that 48% of givers decided to cover the fees. Yes, that's crazy. That's crazy, almost half without being provoked. Like it wasn't like a from stage. And that was just like, default on on the platform. Right? They had to explicitly check toggle. Yeah. Wow. Yeah. So good. And but I think that speaks to a deeper principles that we care deeply. And if if we know that that's a potential opportunity or option, we'll come alongside that church that launched it not too long ago, they saw almost 4000 in savings. And how long last month in my time, so I don't do public math. But that's over $40,000 House annualized, if they keep going on that trend, which is phenomenal. And a lot of people are covering the fees on their recurring gift. And so they're covering the fee and perpetuity beautiful when you provide that option. Yeah. And so the world of generous gets larger and larger people are wired to give people if you just give them an opportunity, you make it easy through the platform. It's easiest to overflow, by the way, shout out. Yep. People do it. Yeah. It's really inspiring. Yeah, it is inspiring. And honestly, that's why I wanted to have this conversation as a millennial churchgoer, because we care about this. We care about the church, that's why we're invested. That's why we're giving. That's why we give our time. That's, that's why we want to be sowing into something that's bigger than us. And I think that when pastors and church leaders hear this, know that the work that you're doing is impactful. Come on. And along with that, your transparency is just as impactful to love that. Thanks so much for listening to the give it up podcast if you want to receive even more insights on church innovation, culture, and giving. Now you can sign up for free to be an overflow insider, where you'll receive exclusive content discounts direct access to Vance Roush to get your questions answered, and also invite only access to our monthly fundraising leadership forums, head to backslash insider, or just click the link in our bio to sign up for free today. In order to get this podcast in the ears of even more church leaders. Could you please subscribe and leave a review for the show? This tells the podcast players what people are enjoying and want to hear more of and we are adamant about providing maximum value to even more church leaders. Thanks so much. We'll see you next time.

why Millennials and Gen Z care about knowing exactly what is done with their donations
a discussion on why some churches do or do not communicate giving metrics and goals
should church members be updated on fundraising goals?
Zoe shares her hot take about 990’s (tax forms for churches)
what the process of auditing church financials looks like
what to do when someone asks for your church financial statement
what some pastors are doing to create financial safeguards
mind-blowing statistic we discovered about donors covering processing fees