Chris Yaw, an Episcopal priest whose prior career was in broadcasting, has launched ChurchNext , an invaluable site that brings the latest practical wisdom from church writers, thinkers, and consultants.

Chris is persuasive: I know it because he has twice talked me into spending an hour with him on-camera, first for an interview you can watch for free, then for an online course you can participate in for $25. I recommend them both! And I encourage you to check out the amazing wealth of other content to be found on ChurchNext. There is no quicker way to catch up on new ideas for congregational leaders.

Dan

Most eligible churches, synagogues, and related organizations have already missed out on an new tax credit in the 2010 tax year, but should prepare to take advantage of it for the current year.

The new credit, which will refund up to 25% of the cost of health insurance premiums paid by the congregation, is part of the Affordable Care Act of 2010, the health care reform law signed by President Obama last March. The credit applies to all employers equally, but nonprofits and congregations are especially likely to miss out because they do not follow tax-law changes closely. This credit is refundable, even to a congregation that normally does not file a corporate income-tax return.

To be eligible, an employer must:

1. Have fewer than 25 employees, including part-time employees counted as Full-Time Equivalents (FTE). Clergy who are “common-law employees,” as most are, are included in this count.
2. Pay an average of less than $50,000 per FTE employee. Clergy who pay self-employment tax and are exempt from withholding, as most are, apparently do NOT count in calculating the average compensation. Strange, but (evidently) true.
3. Pay premiums for health insurance coverage under a “qualifying arrangement.” The rules for qualifying are a bit complex, and phase in gradually; ultimately in order to qualify for the credit, an employer will need to pay half of the premium for all employees included in its health insurance benefit.

Nonprofit employers can calculate the credit on Form 8941, and claim it on Form 990-T, line 44f. Congregations do not normally file Form 990-T, so they should write “Request for 45R Credit Only” across the top.

All of this information comes to me from Richard Hammar, the most thorough and reliable provider of up-to-the minute legal and tax information for ministers and churches, and his newsletter “Church Law and Tax Report.” You can watch a video of Richard’s lucid explanation of the new tax credit on his blog. Hammar’s annually-updated Church and Clergy Tax Guide is the best resource I know of on its subject.

“Is it wise to hire a member?”

When hiring staff, congregation leaders often ask this question. Hiring members has both advantages and disadvantages. The advantages are that members are apt to be familiar with the congregation, committed to its mission, and used to working hard without pay. The drawbacks are that a former lay leader may have difficulty accepting supervision, and a minister or board that tries to fire a member may wind up in hot soup with the member’s friends and family…

Download a printable copy of this article here: 110707 Becoming Staff.

One of the most successful purchases I have made for my home consulting office is the Plantronics Savi Office WO100 headset, which connects to my plain-old-telephone line and also to my computer for Skype calls. The headset comes with both over-the-ear and over-the head options. The sound is great, both for me and my clients. My only complaint is that the over-the head band flops down when the headset is charging, lifting it out of the charger. A nuisance at best.

I’ve found a pretty-good solution and am putting it here for the benefit of anyone who searches the Web. I wrapped a wire tie around the headset so that the loose end points toward the headband, and trimmed it short, so that it serves as a latch, keeping the headset from flopping down. As a result, the weight of the headband pushes the headset into the charger instead of levering it out.

No sooner had the Puritans set foot on the shores of New England than they began to grapple with some of the same church-state questions we still deal with in our churches.

Most of the early Puritans, for instance, believed that ministry should be supported by voluntary gifts, and shun dependence on the state. This was understandable because the Church of England, from their point of view, had grown lax and corrupt from state support. Beholden to the crown, the church had to adjust its ways to placate each new monarch or archbishop. Having accepted everybody’s taxes, the church felt pressure to treat everyone as Christians, even those who—by the standards of the Puritans—were obviously not.

The Puritans knew from experience that accepting government support could undermine their vision of a disciplined and energetic church whose every member took joint responsibility for their great mission in the wilderness.

And so, in the first churches of New England deacons passed the plate and used the proceeds to give alms to the poor and pay the minister.

This worked best in the bigger towns, many of whose ministers had independent wealth (the equivalent, in those days, of a spouse with a good job). It worked less well in smaller towns, whose ministers disliked sharing the plate with the rest of the poor and started to demand that the colonial authorities assure them of a “stinted stipend” or fixed salary. In most places, the only way to manage this was to force townspeople to divvy up. The result was the system of church taxes that endured in most of New England for some time after the adoption of the First Amendment in 1791.

The Puritans spent much of the 1600s arguing among themselves about how to balance the convenience of public support against their vision of a disciplined and covenanted community of saints. I wonder whether it is time for us again to talk about this question.

Public support for congregations endures today in several forms, including exemption from direct taxation and a variety of indirect benefits like the charitable tax deduction and the clergy housing allowance.

As you may have heard, the Freedom from Religion Foundation (what a wonderfully irritating name!) has sued to stop tax-favored treatment of the clergy housing allowance. The case will take some time to work its way up through the courts, which have ducked the issue since 1954 and may duck it again. But what if they don’t? Each of us may soon have to decide how to respond in public to a court decision—either to affirm the constitutionality of the clergy housing allowance or to strike it down.

Leaving aside for now the constitutional question, I would like to hear us talk among ourselves about whether public support—including the clergy housing allowance—actually helps or hurts us in accomplishing our purposes.

One fact needs to be laid on the table frankly: as with most tax benefits, the big beneficiaries of church tax exemption are the big players—large congregations and highly-compensated ministers. A few clergy—those who earn over $100,000 a year—make out very well. Such a minister, married to a surgeon, living in a million-dollar house can save more than $20,000 a year in taxes compared to a non-minister in similar circumstances.

Small, marginal congregations benefit from tax-favored treatment, in the sense that their buildings can sit idle as their numbers dwindle, and sometimes for years afterward. But is this really a benefit to congregations, or to faith? What if failing congregations had to close more quickly, as other non-profits do when they have ceased to serve the public? Might the religious enterprise actually be strengthened?

A sudden loss of the clergy housing allowance as a result of an adverse decision would undoubtedly be harsh and unfair. We should lobby hard for legislation to soften the blow. But if we take the position that tax-free housing is our right, or necessary for the freedom of religion, we risk making ourselves look a bit ridiculous.

Religious institutions have a public image problem. High-profile scandals have confirmed some of the gravest worries members of the public have expressed for years—that “organized religion” cares more about its own material success and power than it does about its message or the people that it serves. This is unfair to most of us, but the public perception is a fact we need to consider as we decide how to respond to court decisions about the special tax treatment we have become accustomed to.

Beyond public perception, we need to pick up the question that the Puritans laid down when they accepted tax support in the mid-1600s: does public support actually help religious institutions to achieve their purpose, or does it weaken more than strengthen them? I would like to hear a conversation among religious leaders about whether it is time to let go of some privilege in the process of reclaiming our vitality.

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“Faithful Finances: Special Privileges and Church Vitality” originally appeared in the May/June 2011 issue of Clergy Journal (logosproductions.com) , and was republished as Alban Weekly, May 30, 2011. Comments welcome on the Alban Roundtable Blog.

In olden times, we like to think, society accorded great authority to clergy. Whether or not this rosy generalization stands up to scrutiny (it does not), we mainstream clergy certainly have lost some of the cachet our counterparts enjoyed from 1945 to 1965 or so. Many people then believed attending and supporting congregations to be just as much a part of being a good person as stopping at stop signs, dressing neatly, and keeping your lawn mowed.

I believe our loss of authority presents clergy with a great opportunity. Authority, appealing as it is, can also be confining. In the days of easy postwar growth, U.S. congregations fell into rigid patterns and became more similar to one another. Like an inbred, highly cultivated strain of livestock, they became vulnerable to common threats. The social changes of the 1960s brought death to many congregations, especially—I would say—those that depended too much on authority.

The opportunity for us lies in developing a new capacity for leadership. Ron Heifetz, in Leadership without Easy Answers, sheds light on the differences between authority and leadership, and suggests how by depending on authority less and learning to lead better, we can redevelop a more varied, robust, and disease-resistant strain of congregations in America.

Authority is the legitimate power to make things happen. Check-signing authority, for instance, is the power to compel the bank to release funds. The right to direct the work of others, to hire and fire, to sign contracts, or to choose sermon topics—all these are examples of the formal authority given by a congregation to designated leaders.

Authority can be informal also: when some people speak, others listen. Jesus “spoke as one with authority,” and so do certain long-time, trusted leaders of a congregation, whether they hold office at the moment or not. Formal or informal, authority is always given to us by others

And sure enough, those who give authority expect something in return. Check-signers must sign only the approved and proper checks, congregations must provide expected services, and preachers are expected to give sermons people like. Anyone who has authority and wants to keep it needs to pay attention to the strings attached.

Leadership, as Heifetz defines it, is quite different. Leadership is not a personal trait, but an activity: getting the whole group to address its most important challenges. Leadership is measured not by whether leaders get their way, but by how well the resources of the congregation come to bear on crucial questions.

Authority can be a help to leaders, giving them the right to convene meetings, name issues, and hold the group’s attention. But the expectations that accompany authority can be a hindrance. People do not usually give authority in the hope that leaders will distress them by inviting them into hard conversations! Only certain people—call them managers—can use authority, but anyone, from any seat or pew, can lead.

Managers use their authority by making decisions; leaders exceed their authority by making others ponder troubling questions. Managers calm people by resolving ambiguity; leaders often frustrate people by refusing to decide quickly what can only be solved slowly. The most important challenges are too big for individual decision-makers to address alone. That’s where leaders come in to bring the whole group’s gifts to bear.

Which situations call for authority and which for leadership? One consideration is the nature of the challenge to be faced. If the furnace breaks, it must be repaired. The congregation needs to authorize someone to pick a contractor and spend money pronto. But a once-successful youth program that no longer attracts participation may need a cross-section of good heads to take whatever time they need to cook up a fresh vision of youth ministry.

A second factor in deciding whether to use authority or practice leadership is the amount of courage available. A “broken” youth ministry may be fixable simply by replacing one of the moving parts—for instance, a staff member. That’s the easy course. But for a brave congregation, even a broken furnace could become the kind of challenge Heifetz calls “adaptive.” Such a congregation might choose to interpret the cold sanctuary as a wakeup call, and ponder whether to install a new, “green” heating system.

The deciding factor often comes down to the fact that even the bravest congregations can deal with only a few adaptive issues at a time. Many congregations have no “bandwidth” for adaptive leadership at all, because their leaders are too busy using their authority. A clergy leader who cannot delegate to staff and volunteers soon has no time to address bigger issues. A governing board that is reluctant to delegate authority to staff ends up in the same position. Without a firm and mandatory plan for delegating authority, the decision-making demands that come with authority quickly overwhelm the people at the top of any organization. It is tempting, when this happens, to interpret every issue as a technical, decision-making matter.

The temptation to quick fixes is nowhere greater than in the fields of money, property, and personnel. A deficit, at one level, is merely a problem in arithmetic: expenses exceed revenues. The problem can be fixed by lowering one, raising the other, or a combination. Looking at a deficit this way leads us to ask questions of authority: Who can cut spending? What fund-raising methods will induce greater giving? When it comes to money, where does the “buck” stop?

But a deficit invariably points beyond itself to deeper issues. Perhaps the congregation has become overly dependent on endowment revenues. Perhaps it is still trying to engage people in outdated concepts of membership. Perhaps it clings to a grand style of congregational life that no longer fits the values or lifestyles of potential members.

Questions like these deserve the sustained attention of a varied group of leaders, information from outside, and time for conversation, prayer, reflection, and decision. Who will do this? Unless the senior clergy and governing board have freed themselves by delegating some of their authority to others, they will never get around to dealing with the most important matters on their plate.

Fortunately, anyone can lead. While it is far from the ideal solution, when official leaders fail, then leadership can still emerge from the periphery: from ad hoc planning teams, from voices crying in the wilderness, even from the mouths of babes.

This post was originally an article in the Clergy Journal, Jan-Feb 2011, and was reprinted by Alban Weekly, Jan 31, 2011.

Many people flinch at the mention of evaluation, and with reason. In congregations, staff evaluation often is conducted as a popularity poll with anonymous respondents rating staff performance on the basis of subjective impressions. In effect, the staff members answer to hundreds of semi-invisible bosses who can invent new things to blame them for at any time. This approach raises stress and does little to improve performance. Others dislike staff evaluation because people who are in conflict with a staff member often propose evaluation as a way to express unhappiness.

Despite the pitfalls, evaluation is important to effective partnerships, starting from the board and head of staff and moving throughout the staff. Firm boundaries require accountability, and accountability requires an atmosphere in which people give each other feedback. When evaluation is done well, it clears the air and motivates improvement. It can also sharpen awareness of differences between an individual’s sense of calling and the congregation’s emerging vision, leading to adjustment or even to separation. Although a unilateral decision to end a partnership is rarely easy, avoiding problems to postpone the pain makes it no easier.

Regular evaluation helps to surface issues while the relationship is good enough to make it possible to work on them. Effective evaluation is:

• Scheduled: Evaluation takes place by the calendar, not in response to a problem.
• Mutual: Everyone gives and receives feedback.
• Goal-centered: Previously established goals are the basis for evaluation.
• Individual: Evaluation asks, “Am I meeting the expected standard for my job?” “How am I contributing to our goals?”
• Collective: “What progress have we made toward our goals?” “How do we need to adjust course?” “How are we fulfilling our vision for this particular program area?”
• Backward looking: “What did I accomplish?” “How well did we do?”
• Forward looking: “How can I improve?” “What should we do differently next time?”

Nothing can make evaluation easy all the time. Sometimes difficult words need to be said and heard. But with a healthy process, evaluation can help leaders pull together toward shared goals.

This article was reprinted by the Lewis Center from Governance and Ministry: Rethinking Board Leadership by Dan Hotchkiss, with permission from the Alban Institute. Copyright © 2009 by The Alban Institute, Inc., Herndon, VA. All rights reserved. It is available from the Alban Institute. It is also available from Amazon.com and Cokesbury.com.

When board- and committee-centered congregations engage paid staff, they sometimes struggle to find language to describe how staff members should relate to one another and to the rest of the organization. Especially if the staff person leads a program area like education, music, or youth work, which is “owned” by a committee, it seems natural that the committee should hire, orient, and supervise the new staff person.

Dial the clock forward ten years. The staff member is full-time, still working “for” a committee (though by then he or she may actually handpick its members), and in conflict with another member of the staff, possibly the senior clergy leader. What is the process then? Do you assemble the two staff members and their respective committees to try to reach a solution? Do you all go to your mutual boss, the board, and ask it to judge the case? If the congregation elects both the committee and the board, does the congregation have to vote?

Having seen all these methods tried, I have concluded that “a staff member reports to a committee” is one of those things that you can say in English but that makes no sense. . . . . Committees simply cannot supervise paid staff, because they are not present when the work is
done, and it is too difficult for them to speak with one voice. A staff member deserves a boss who works at least as many hours a week as he or she does.

Others can participate in the evaluation process or in making policies about staff treatment. But a congregation that wants to remain sane will set its staff up as a single team and hold it responsible for sustaining its own working relationships. Designating someone to be “head of staff” or “leader of the staff team” — and requiring the staff team to make its own plans, resolve its own conflicts and carry out its own evaluations (inviting others to participate in all of these except the conflicts) — gives the staff the space it needs to operate effectively.

The Lewis Center reprinted this from Governance and Ministry. Good idea! I’m reprinting it here as well.

Congregations almost always say they want to grow, but I’ve come to doubt that many really do. The more accurately people picture how a congregation changes when it grows from family-sized to pastoral, program, corporate and beyond, the more clearly they see that growth means losing the worshiping community they know and love and trading it in for one where they will feel—at least initially—like strangers.

Ministries of service to others pose similar challenges. Like outreach to potential members, serious service to the needy requires donors and volunteers who understand that the church or synagogue exists for others at least as much as it exists to serve its members. Casual generosity will support casual service—sustained social responsibility requires a revolution in most congregations’ understanding of their purpose.

… read the rest of “Funding for Today and Tomorrow” at the Alban Institute site.

“How is your model different from the Carver model?” Since Governance and Ministry came out, I hear this question now and then, especially from people in the United Church of Canada, the Mennonite Church, and the Unitarian Universalist Association, where John Carver’s Policy Governance is widely known.

I have benefited from John Carver’s writings and agree with him on many things, for instance:

• Boards should focus primarily on long-range, big-picture matters,
• Boards should record their most important decisions in written policies.
• Boards should delegate substantial day-to-day management authority so decisions can be made away from the board table. In organizations with staff, it makes sense to delegate management authority to the staff leader.
• Boards should exercise effective oversight of those to whom it has delegated authority without involving themselves too much in management.

Where Carver is well-known, you don’t need to say much more than this for some people to peg you as a Carverite—not because any of this is original with Carver or unique to him, but simply because people who know the “Carver model” may not know much about the broader conversation about nonprofit governance. Especially in churches and synagogues, where “normal” decision-making practice tends to be quite chaotic and diffuse, there is a tendency for any good advice to sound like any other, simply because it is so different from what we’re used to.

I appreciate Carver’s contributions to thinking about governance and have benefited from the clarity of his thinking. But I have some disagreements with him, and some reservations about the use of his model in congregations. Here are some areas of difference:

• Carver relies heavily on the distinction between ends and means—what we intend to accomplish versus how we are going to do it. I agree that this is a useful distinction, but do not agree that decisions can be clearly classified one way or the other. Like many clear distinctions, this one is a polarity or spectrum, not a set of pigeonholes. This may be especially true in congregations, where “how” we do things is a major part of “what” we want to accomplish.
• Carver’s seems to me to picture an organization as a machine that can be programmed to follow a set of rational directions. I take a more systemic or organic point of view. The official rules governing decision-making account for very little of what happens even in well-ordered groups. The special nature of a congregation, with its overlapping constituencies and multiple relationships among people, make systemic and organic metaphors especially useful.
• Carver states in many places that “chief executive performance is identical to organizational performance.” This may be a useful fiction in some organizations, but in a church it is can be quite pernicious, both because “performance” is so difficult to define and measure, and because the job of a senior clergy leader is only partly to lead the organization. Clergy contribute a great deal through their personal ministry, and congregations succeed or fail for many reasons–clergy performance being only one of them.
• The separation of board and staff functions in Carver, while clear, seems to me less than ideal. I have never seen a board that could discern mission or cast vision without participation—nay, leadership—from staff leaders. In the book I define a zone of overlap between the board and staff that includes both discernment and strategy. While it needs to be clear what bucks stop where, only a shared process can produce the wide support such decisions require.
• Like me, Carver says the board is a fiduciary for the organization’s “true owners.” But Carver’s “owners” are always human beings. If there are members, they must be the owners. For me, the true owner of a congregation is its mission. The board’s core responsibility to to ensure that the congregation serves its mission; likewise, when members vote, they vote not as owners, but as fiduciaries for the mission.

I am a grateful reader of John Carver’s writings and respect the effort some congregations have made to follow Policy Governance as closely as they can. My approach is similar in some ways, different in others.

Perhaps the most important difference of all is that my “model” is not a model at all. Congregations are different, and they can and should govern themselves in a variety of ways. I’m always delighted when my readers and consulting clients invent wildly unexpected variations on the basic themes of Governance and Ministry.