| By Cynthia Gordon-Floyd, CPA, Columnist I have been attending various webinars and discussions over the past 2 weeks about financial management for non-profits. I’d like to share with you some information that relates directly to churches. Here are the best suggestions that I’ve received that I thought might be helpful as you navigate these uncharted waters. The church must keep being The Church. This is the time for us to reach out to not only our congregants but to everyone, we are able to touch. Yes, it is financially difficult to be closed but as Christians, we are expected to exercise generosity especially when times are difficult. Caring for our elderly, those who are unemployed, depressed and worried are what we do best. We can do ministry without money. Let’s find ways to shine the light of Christ on everyone we can reach through social media and other electronic means while we are social distancing. Make short-term cuts to build your cash reserves. Begin reducing expenses for your building and ordinary expenses as quickly as possible so that you may reserve cash to pay salaries. Our focus should be on people, not things. Look around you and make decisions that will help you hold onto as much cash as possible including paying bills on credit cards to stretch out the cash need. Draw down the availability on your line of credit. If you are blessed to have a line of credit, please consider drawing the cash from the line and parking it in your cash account. Don’t spend it, please. Yes, you will incur interest expense on the amount withdrawn but it is better to have the cash and not need it than the reverse. During the 2008 crisis, banks began curtailing the ability to borrow on existing credit lines because they were concerned about everyone’s ability to repay. Currently, banks are very leery about the viability of many churches. Prepare a weekly cash flow forecast. Now, that you are starting to develop a pattern of who will give online, carefully monitor your cash inflows and outflows on a weekly basis. Plan out how long you can manage the current situation. This is the time to adjust to our new reality, it will only last a season. Find creative ways to encourage giving. Our first concern is for those who may need our help. We should remind our congregants that we need their help to remain financially stable and we also need their assistance to help those in need. Ask those who have more than others to step up more because to whom much is given, much is required. The CARES Act will provide government-guaranteed loans. The CARES Act will provide low-interest loans for employers (including non-profits) with less than 500 employees. These loans will not be difficult to apply for but the problem is the Act is designed to help employers. If your church only has a few employees, you will be at the bottom of the stack. The goal of this legislation is to get employees back to work. Talk to your bank now if needed. Please know that banks are not interested in bailing out churches. Be prepared for the difficult conversation. Please have those conversations early, not after the church is in a difficult financial situation. Move balances over $250,000 out of one bank. The FDIC insurance will only cover $250,000 per depositor not per account. If you are carrying more than the limit, please consider moving some of your cash to another bank. Online/Text Giving is a must not a luxury. If you don’t have online/text giving that is easy to use, please implement it immediately. There are several programs that are quick and easy to implement. Givelify, Pushpay, Tithely are a few of the most popular programs. |
For more information, please visit willingsteward.com. |
