Establishing a solid legal foundation is crucial for every church, as it provides the necessary support and protection for the resources and responsibilities entrusted to them by God.
1. Review the Board Minutes.
Maintaining accurate board meeting minutes is essential for your church’s compliance and legal standing. These documents serve as official records, demonstrating that your church operates within the bounds of the law.
Ensure detailed minutes exist for all your church board meetings from the previous year. Verify their accuracy, confirming that they faithfully capture the proceedings. Each set of minutes must be reviewed and approved at subsequent board meetings.
If any minutes are missing or if your church doesn’t have records, your board can consider the concept of ratification of prior acts. This approach allows the board to approve decisions made in the past year retroactively. While this is a temporary solution, it’s vital to document previous corporate decisions accurately. When applying this retroactive approval process, provide your best estimates of dates and times for these decisions.
2. Consider Additions and Removals of Board Members.
The annual board meeting serves as a strategic occasion to recalibrate your board of directors. According to your organization’s bylaws, this meeting offers the opportunity to handle various matters, including accepting resignations, welcoming new members, and, if necessary, removing existing board members. It’s a chance to ensure your board comprises dedicated individuals aligned with your mission, working harmoniously to achieve common goals. This process guarantees that your board remains dynamic and effective, paving the way for a fruitful year.
3. Review Compensation Agreements.
The start of a new year provides an excellent opportunity to review, restructure, and reapprove all compensation agreements. This evaluation is especially crucial if this is the first year of compensation for you or another staff member at your church. It is essential to determine the employment category of the individual—whether they are a ministerial employee or a regular employee. Approval for each individual’s compensation must be obtained before disbursement.
4. Manage Donations With Exceptional Stewardship.
Understanding the distinctions between restricted and designated offerings, as well as knowing the correct procedures for managing non-cash donations like vehicles, is vital. Additionally, having a structured process for counting tithes and offerings is crucial. Addressing these aspects demonstrates good stewardship, ensuring church compliance and enabling donors to claim tax deductions for their contributions.
The IRS offers valuable resources, such as The Charitable Contributions Publication 1771, outlining the obligations of both charities and donors regarding various donations. Utilizing dedicated software to track and manage your church’s donations is advisable.
5. Start Setting Aside Funds.
Regardless of your church’s financial status, making gradual savings is a prudent investment in your ministry’s future. By consistently setting aside funds, your church will accumulate a significant amount in its savings account over time.
As Proverbs 13:11 says, “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.”
6. Outsource Your Bookkeeping.
Consider hiring an outsourced bookkeeper for any organization, whether a nonprofit, church, or ministry. A bookkeeper’s role involves maintaining detailed financial records, including income and expenses, transaction dates and amounts, tax planning, financial planning, and consulting services. They oversee all accounts and ensure the accuracy of accounting procedures.
Having the right team member onboard can relieve the burden, allowing you to concentrate on your ministry. Outsourcing your bookkeeping ensures accountability and legal compliance and offers numerous benefits.
First published on StartChurch.com. Used by permission.
