3 Things Every Ministry Should Consider Doing Before 2018

By Raul Rivera

There are times when we all put things off until the last minute. Some of us do this more often than others and this is referred to as procrastination. 

In essence, one who chronically procrastinates will intentionally avoid difficult tasks and deliberately look for distractions.

I want you to take a moment and think back to the beginning of this year. Are there things you told yourself that you would do or take care of for your ministry this year, but simply have not had time to do?

Whether it be attributed to procrastination or not, it is okay! This just goes to show that we can get so busy in our lives and in our ministries, it is easy to leave things on the proverbial “back burner.”

For churches and ministries, it is the administrative and compliance aspect that often gets overlooked or left on the “back burner.”

But don’t worry because there is still time in the year to take care of some of these “back burner” tasks . . . and we can help guide you through the process.

In this blog, I want to share with you 3 things your church or ministry should consider doing now to propel you into 2018.

3 things to consider doing before the end of the year

1. Begin forming your ministry’s legal foundation now.

 Many of you have intentions of starting your church or ministry in 2018, and to that I congratulate you and encourage you to keep pressing forward in your calling. 

I also want to encourage you to not wait until “some time next year” to begin forming your church or ministry’s legal foundation. 

In fact, there are multiple benefits to forming your legal foundation and establishing a corporation before the end of the year, especially if you are preparing to launch your church or ministry in 2018.

Two benefits of forming your legal foundation and corporation now are as follows:

Benefit #1: Forming your legal foundation and corporation now ensures the tax deductibility of donations to your church or ministry. 

When the IRS approves a Form 1023 application, it grants the approval retroactive to the date of incorporation for all churches. For a non-church entity, the IRS grants this retroactive approval if that charity applies within 27 months of incorporation.

If you are unsure if your ministry has passed its 27 month window, give us a call at 877-494-4655 and one of our team members will be glad to help!

Benefit #2: Forming your legal foundation and corporation now creates a corporate veil of protection to substantially limit the liability for board members, church members, or participants in your organization. 

When a church is incorporated, a legal entity (corporation) is created separate and distinct from the members of the organization.

A corporate veil is the legal concept that involves liability protection. 

Under the corporate veil, if court action was taken against a corporation, the personal assets of the members would be protected. If no corporate veil exists, the members of the organization (including board members, church members, and ministry partners) could all be held liable in litigation against the organization.

The next two items are geared a little more towards churches and ministries that have already started and been established for some time, but these are just as important for newer churches and ministries to take note of.

2. Get your finances in order now . . . not later.

Having a financially sound ministry is important to any pastor or ministry leader. But in order for that to happen you have to be intentional with getting your ministry’s finances in order and maintaining that order.

This all begins with establishing a budget for your church or ministry. In short, there are six easy steps that you can take to create a healthy budget for your church or ministry. Those six steps are as follows:

1. Begin planning early.
2. Get a realistic idea of the income you expect your church or ministry to bring in.
3. Determine your church or ministry’s financial responsibilities.
4. Determine your church or ministry’s financial goals.
5. Create “buy-in” to the budget.
6. Make a plan for how you will manage expenses.

These six steps are explained more thoroughly in a previous blog and you can click here to learn more. 

The hurdle that most pastors and ministry leaders face when it comes to adequately maintaining budgets and ministry finances is TIME. This is why we created our Bookkeeping Service. 

By utilizing our Bookkeeping Service, you will work with a personal bookkeeper and seasoned CPAs who will help streamline and make sense of your church or ministry’s budget and financial records. 

3. Make a plan to not miss your ministry’s filing requirements in 2018.

We work with both churches and ministries in all 50 states. If there is one thing that can easily trip up churches and ministries in their quest to maintain compliance, it is the filing requirements at both the state and federal level.

Most states require both churches and ministries to file what is called an annual report.

Each states’ annual report will differ in the amount of information required of you and when the annual report is due. But one thing that is true across the board is that if you fail to file a timely annual report with your state, you could find your church or ministry administratively dissolved. 

In addition to annual reports, some states require franchise taxes to be paid. Such franchise tax fees can be steep, however, as a charitable organization, you have the ability to file for franchise tax exemption. 

If you have questions about franchise tax exemption in your state, give us a call at 877-494-4655.

Lastly, for all charitable organizations, except for churches, the IRS requires you file an annual information return known as Form 990. I addressed the implications of not filing Form 990 in a previous blog and I encourage you take time to read it, as the consequences of not filing Form 990 can be costly.

(Recommended reading: “Revoked for One Missed Form”)

I mention all of this not to be a discouragement to you and the good work you are doing through your church or ministry. 

Rather, I mention this to highlight the importance of staying on top of your church or ministry’s yearly filing requirements. 

If you find that you need help in keeping track of your church or ministry’s filing requirements and want to ensure that you not miss one due date, I invite you to consider utilizing our invaluable KeepRIGHT Program. Learn more about it by calling us at 877-494-4655.

Recommended articles for you:

• “Can the IRS Tax Pastor Appreciation Gifts?”
• “Overcoming the Challenges of the 21st Century Pastor”
• “An Easy Way to Attract Visitors to Your Church”

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