CHURCH PLANTING & Why the “Lean Start-up Movement” changes everything #video

Harvard Business Review, 1/16/18: “Why the Lean Start-Up Changes Everything”

New ventures are searching for a business model, not executing one. Download a customizable version of this video slide deck here or watch here:

For more, read “Why the Lean Start-Up Changes Everything.”

MULTIPLICATION & 5 Ways Too Much Money Can Rot Your Church Plant

Commentary by Professor B: As I research/write a new course on “church multiplication and growth,” I am encouraging students to think of creative new ways to fund church planting. Having planted a church myself, as well as having written/coached many church plants, I believe the usual funding model is inadequate and forces church plants to be less contextualized. In the past 25+ years, I have seen that reliance upon external funding and external contexts often rob a church plant of its contextual intelligence.

Here’s an article published by Missio Alliance about this problem. I will be using this article in my new course to encourage students to design innovative ways to address it.

“The Big Problem with Barna’s Study on Church Startups and Money”

by Jared Siebert, Missio Alliance, 5/9/16.

… 5 Ways Too Much Money Can Rot Your Church Plant

Planters and denominational folk, please pay attention.

1) Excessive external funding can kill a church’s feel for context.

… Church plant structures and expectations need to be tied to context. Intimately. The best kind of church planting is committing long term to a specific location among a specific people group. We’re at our best when we tie our fate to people and place. It worked for Jesus and it will work for His church. Your life, your practices, and even your finances all need to be shaped by context. This is fundamental to incarnating the gospel.

Too much external funding interferes with this process. Tuning your communal lives to your context takes feel. It takes tension. To do it right your church will need to live somewhere between what the people want and what the people can afford.

2) Excessive external funding robs us of creativity.

You’ve heard that necessity is the mother of invention? Excessive external funding robs us of necessity. Without the tension created by necessity you won’t be as likely to actively seek out novel contextual solutions. Forcing your church, as much as possible – to be here in this place with these people – creates irreplaceable fuel for your church’s imagination.

This lack of invention doesn’t just affect the local church either. It spreads to the broader church too. One of the great gifts that planting gives the broader church is inventiveness. Less local innovation means less denominational innovation. Calling us to double down on the same old models should be a sure sign that we have a growing imagination deficit. More money won’t fix that.

3) Excessive external funding robs your church of its survival instincts.

The will to survive properly resides within the plant itself. Denominational coffers should never house your church’s survival instincts. Instead, the will to survive should come from a deep collective sense of God’s calling, love for each other, and your deep burden for the needs of your context. Your survival instincts have to be built together piece by piece over time. Too much outside financial support messes with this process. It can also make people outside your church the owners of your church. Not good.

4) Excessive external funding can mess with your sense of calling.

Planters would also do well to check their own motivations for church planting. The kind of planting work we have ahead of us will not be for the faint of heart. Reaching the hard to reach peoples in North American culture is going to take time. The harder to reach the more fruitless years you may have ahead of you. Are you ready to put in 15+ years with next to nothing to show for it? That’s not an uncommon missionary reality. Google it. It may soon be our reality too.

Read more at … http://www.missioalliance.org/the-big-problem-with-barnas-study-on-church-startups-and-money/

And for even more about this problem (and some solutions with examples), check out the Abingdon Press book, Growth by accident, Death by planning: How not to kill a growing congregation. Three of the above five missteps with external funding mentioned by Siebert are addressed with solutions in my book.

BUDGETING & When Does Pledge-based Fundraising Work? A Leadership Exercise.

by Bob Whitesel D.Min., Ph.D., 11/11/15.

Sometimes churches have budgets that are generated by a congregation “pledging” their giving for the upcoming year.  The church then budgets according to the level of pledges it receives.

While this can be a valid way to set budgets, it can also have some caveats.  On this issue one of my student’s once wrote, “we ran with this system and I hated it. I felt that it was way too restrictive and left little room for God to move.  The budget was set strictly on what was “pledged” – vital ministries were cut. Some of the leaders got tired of me pushing and asking “how big is your God?” – and I did so without the idea of getting stupid and jumping into huge (none-God-lead) increases just for the sake of it. So over time we have totally moved away from any pledge drive. Our budgeting process begins in prayer and we go with the increases we believe God is calling us to. I also preach/teach the tithe –and sense we have moved to this the giving has actually been better than it was when we were just pledging.”

The pledge-system he describes is really a type of “line item budgeting,” where a “faith promise” now takes the place of just incrementalizing last year’s budget.  As Butler noted (2010, p. 71) a strategic budgeting combination of line item and zero-based approaches creates a more holistic approach.  Butler calls this “strategic budgeting” (ibid.).

J. D. Berkley writes, “The system has drawbacks, however.  It is so very cut-and-dried that is lacks the emotion and spontaneity that enlivens much Christian giving. Events arise that genuinely inspire giving, but if the church is locked into a rigid one-ask system, the moment is lost. Needs cannot always be anticipated…” (Berkley, 2000, p. 37).

Herein is a key weakness to the pledging approach. The pledging approach works best when a new “project” is about to be launched.  It can be a new program, a new building, a new staff person, etc..  Subsequently (and regrettably) churches often get caught in a cycle of launching new ideas (c.f. a new “building project”) to stimulate giving, because this (rather than the Good News of God’s missio Dei) inspires giving.

A Leadership Exercise:

Describe a time when you witnessed this type of “budgeting by crisis” or “budgeting by vision.”

What were the outcomes?  Give a paragraph to each.

  • Positive outcomes:
  • Negative outcomes:
  • Lessons learned:

Works Cited
Berkley, J. D. (2000). The Dynamics of Church Finance. Grand Rapids, MI: Baker Books.

BUDGETING & Benchmarks for Church Finances from 4 Scholars

Commentary by Dr. Whitesel:  “Below are excerpts from writings of five nationally-recognized scholars on suggested benchmarks for church budgets. Compare these with your budgets and expenditures to measure your fiscal health.”

Thom Rainer, Jun 16, 2012, retrieved from http://thomrainer.com/2012/06/16/three_questions_pastors_often_ask_about_church_finances/

What is the amount of personnel expenses that should be in a church budget? First, I’ll give the simple response. Personnel expenses typically should not exceed 55% of a budget. But such guidelines are subject to a number of caveats. If the church has debt obligations in its budget, for example, those payments will reduce the amount a church can put toward personnel costs. The average personnel costs are about 40% of budget, but averages can be misleading as well. As a general guideline, however, I would say the broad range of personnel costs should be 35% to 55% of budget.

What are the sources of income for most churches? As you would expect, the tithes and offerings are the dominant source of income for churches. About one-third of all churches have no other sources of income. But many church leaders may be surprised to know that, on the average, churches receive 13% of their income from other sources. These sources include investment income, ancillary ministry income (such as a school or mom’s day out program), denominational support, and rental income.

How can I know if the amount our members give to the church is healthy or not?   Begin with an average and work from there. The average weekly per capita giving (WPCG) in an American church is $26. That is the amount, on the average, that every adult and child gives to the church each week. To calculate your church’s WPCG, divide your average weekly undesignated receipts by your average worship attendance (including children). For example. If the average weekly budget receipts are $4,000 (roughly an annual budget of $200,000), and the average worship attendance is 150, the church’s WPCG is $26.67 ($4,000 divided by 150). That number would be very close to the national average. The economic demographics of your church, however, could affect this number significantly

Kent E. Fillinge, 5/02/11, retrieved from Christian Standard Magazine, http://christianstandard.com/2011/05/is-the-church-in-a-recession/

Average Weekly Giving Per Person

Weekly per person giving (that’s general fund giving divided by average weekend worship attendance) increased among three of the four church size categories last year.

After taking a slight dip in 2009, the weekly per person giving average in megachurches rebounded to surpass 2008 levels, but still fell short of 2007, prerecession giving figures. The average megachurch attendee put $26.77 per week in the offering plate last year. The average weekly giving ranged from a high of $40.66 per person at one megachurch to a low of $12.93 per person at another.

Emerging megachurch attendees were the most generous givers last year, with average weekly per person giving of $27.48, a 16 percent increase from 2009. Giving at emerging megachurches ranged from $76.30 per person to $13.31 per person.

Large churches also saw weekly per person giving increase in 2010, to an average of $26.63, a 50-cent per person increase from the year before. Average weekly giving ranged from $42.28 to $15.59.

Medium churches experienced a decline in average weekly giving of more than a dollar per person, to $25.60. Average giving ranged from $39.28 per person to $10.66.

James D. Berkley, 1997, Christianity Today, “Is Your Church Fiscally Fit? Ten ways to assess you financial strength,” retrieved from http://www.buildingchurchleaders.com/articles/1997/le-7l3-7l3057.html

Total annual income

Church-expert Lyle Schaller provides a simple benchmark for annual contributions. He writes in The Interventionist: “A useful beginning point is to multiply the average worship attendance times $1,000.” If my church has 125 attenders on an average Sunday, and annual giving is $125,000, we’re in the ballpark.

Another way to look at the same figures is to multiply $20 per head in worship for any given week. If my church averages two hundred in attendance, it should be receiving about $4,000 a week. Of course such figures need to be adjusted for churches in particularly wealthy or poverty-stricken areas, for especially small or large churches, for new church plants—well, for just about any church, because there is no typical church.

The Typical Churchgoer Pays about $10 A Week For Personnel Costs

“The ‘price’ of church is rising faster than the cost of a movie ticket,” notes Schaller. “It used to be the per capita ‘cost’ of church was close to the cost of going to a movie. Now it’s closer to the expense of going to a professional sporting event—about $20.” Of course, no church charges attenders their proportion of the weekly church expenses (“Marge, I’ve only got two twenties on me. We can’t afford to bring Billy to church this week!”). But Schaller’s analysis does show the comparative costs of “doing church.”

Another way to look at annual giving is to compare this year’s receipts per attender to 1968’s figures. Between 1968 and now, according to Schaller, the Consumer Price Index went up roughly 400 percent, and personal income rose even more. So if my church received an average of $200 per attender per year in 1968, and now it receives an average of $900, we’re ahead!

A third way to look at annual receipts is comparing them with total household income. What percentage of members’ income is being given to the church?

A little sleuthing at the local planning agency will probably produce a figure for average household income. Multiply that by the number of households in the congregation (and adjust a little for the comparative wealth of a given church), and this approximates church members’ total earnings.

Then, divide the church’s total giving by its total earnings. If the result is 10 percent, the church is a biblical lot! More likely it’s under 5 percent or perhaps around 3 percent. If we can find the figures, we can compare the percentage of income given in previous years to establish a trend.

 Stephen Anderson, excerpted from the book, Preparing to Build retrieved 2013 from http://www.frugalmom.net/giving_in_the_church.htm and http://amichurchconsulting.com/purchase/?hop=frugalmom

When initially working with churches that need to build, I always ask two very simple questions.

1) What is your average attendance, counting men, women and children of all ages?

2) What was your total income in tithes and offerings last year (or last 12 months)?

Once these two numbers are ascertained with reasonable accuracy, it is a simple process to divide the total income by the total average attendance to determine the average giving per person per year. A church with 150 average attendance and annual giving of $165,000 would be $1,100 per person per year.

Over the years, I became aware of what seemed to be an emerging pattern in the relationship between income and attendance. It appeared that for a significant percentage of churches, one could take their average attendance and by adding three zeros, come up with a very close approximation of their annual income. If true, this would mean that average giving in the church was approximately $1,000 per year for every man, woman and child in attendance. This happened so many times I decided to put my impressions to the test. Over the years I had accumulated hard data, including giving and attendance information, from churches into a database. I exported the information into a spreadsheet and did the simple math. I was pleased to discover that mathematical analysis confirmed my anecdotal estimate.

An analysis of nearly 200 churches, with average total attendances ranging from 9 to 2,500 persons, indicated a median giving per person per year of $1,038.

There appears to be no significant correlation between the size of the church and giving per person. In fact, 80% of the churches that ranked in the top 10 for giving per person had attendance of less than 500 with 2 of those reporting attendance of less than 50 persons and 2 reporting 1000 or over. The average attendance of churches in the giving per person top 10 was 305, with an average income to the church per person per year (counting men, women and children of all ages) of $2,250.

It is important to remember that averages are just that, an average…

Church giving drops $1.2 billion reports 2012 Yearbook of Churches, retrieved from http://www.ncccusa.org/news/120209yearbook2012.html

New York, March 20, 2012 — Churches continue to feel the effects of “the Great Recession” of 2008 as contributions dropped $1.2 billion, according to the National Council of Churches’ 2012 Yearbook of American & Canadian Churches.

Membership trends in denominations reporting to the Yearbook remain stable, with growing churches still growing and declining churches still declining, reports the Rev. Dr. Eileen Lindner, the Yearbook’s editor.

The 80th annual edition of the Yearbook, one of the oldest and most respected sources of church membership and financial trends in the U.S. and Canada, may be ordered for $55 each at www.yearbookofchurches.org.

Not all churches report their financial information to the Yearbook, Lindner said, but the downward trends are reasons for concern.

The nearly $29 billion contributed by nearly 45 million church members is down $1.2 billion from figures reported in the 2011 Yearbook, Lindner said.

“This enormous loss of revenue dwarfs the $431 million decrease reported last year and provides clear evidence of the impact of the deepening crises in the reporting period,” Lindner wrote.

In terms of per capita giving, the $763 contributed per person is down $17 from the previous year, according to Lindner, a 2.2 percent drop. The decline “took place in the context of ongoing high unemployment and a protracted economic downturn,” Lindner wrote.

DONATIONS & An Unexpected Windfall. A Case Study on Unexpected Donations

by Bob Whitesel, 6/515.

I often give my students the following hypothetical scenario regarding what they might ethically and strategically do with an unexpected and sizable financial gift to their organization. Take a look at this example. Then you can search this wiki for the phrase “an unexpected windfall” and find many insightful (and some humorous) responses.

An Unexpected Windfall (a hypothetical case study)

Miss. Winnie Fall’s family has had a long history in your church. A matriarch, and the last remaining member of her clan, Winnie passed away recently in Florida. Having lived there for many years, she has not communicated with you or previous leaders of the church for several decades.

In her will Winnie leaves $500,000 to the church to be “used at _____fill_in_your_name____’s discretion.” She has given you no other direction for the disbursement of these funds.

Now, you must recommend to the church board what to do with this revenue. I ask my students to do some research and then give me a paragraph with a plan for spending the Win Fall money.

BUDGETING & How to Prioritize Innovation in Your Budget

Commentary by Dr. Whitesel: “Our Good News is so imperative for the world to hear we must find innovative ways to tell it. But, often churches are left in the flotsam and jetsam of society because our message, while eternal is not innovatively shared. This Harvard Business Review article points out that if you are spending less than 10% of your budget on innovation, you will never become a creative communicator.”

Read more at … http://blogs.hbr.org/2014/09/how-to-prioritize-your-innovation-budget/