Managing Your Church

Three cases argued last month before the United States Supreme Court raise a key employment question that may significantly affect the way churches approach future hiring, firing, compensation, and benefits decisions involving nonministerial employees.

Though a ruling is not expected until the Supreme Court’s current term ends in the spring of 2020, legal experts say congregations with theologically conservative views of human sexuality should note the situation and contemplate taking several steps now to protect those positions.

At issue before the Supreme Court: How the term sex should be interpreted under Title VII of the Civil Rights Act of 1964. The federal law prohibits employers with 15 or more workers from discriminating against people based on their race, color, religion, national origin, or sex, the latter term long-assumed to mean biological gender (male or female).

The plaintiffs ...

I’m working on a policies and procedures manual for my church. It has grown to 28 pages, and I expect it will get longer. Would it be better to have separate documents—one for policies and one for procedures—or should everything be kept in a single document? Also, what else should we consider when developing policies and procedures for our church?

We went through this process a number of years ago and settled on the following best practices that may prove helpful to you.

Policies and procedures are separate documents

We decided to create two separate documents, but one references the other.

There were three reasons for doing this:

1. Church boards should be focused on policies and not on writing and monitoring procedures for policies. This helps board members stay focused on the broader area of church governance without burdening them with step-by-step procedural matters.

2. Procedures typically change much more often than policies, and they should. System, organizational, and other changes may trigger the need to rework procedures within a church. Procedures are best kept up to date by staff using some formal review and approval methodology to ensure they stay true to policy and operational standards.

Image: Glenn Carstens-Peters / Unsplash

The holidays are just around the corner—and unfortunately, the rush of the season can shift the focus away from essential tasks that need to be accomplished before the New Year.

This year, don’t be caught off guard when the end of December rolls around. Instead, jump into this season with a task list in hand. To start, these three guidelines can help you:

1. Set clergy housing allowances. If your church gives a housing allowance, it’s important to designate the amount annually. As the year wraps up, be sure to compare actual housing expenses to what you’ve designated to be sure you're setting the correct amount. If your minister’s expenses exceed what was designated, they may not be eligible to receive the full tax benefit. You can always amend your church’s housing allowance or even add one if you haven’t yet, but the housing allowance designation can't be made retroactively. For more help with parsonages and housing allowances, check out Chapter 6 of the annual Church & Clergy Tax Guide.

I. Thou shalt not allow the church's intellectual property to be used for personal purposes.

Rule: Under the work for hire doctrine, any property developed within the scope of the job duties of an employee is the property of the employer.

Practice Tip: An intellectual property policy should be carefully crafted and adopted. It should address all areas of concern, such as curriculum, sermons, and music.

II. Thou shalt not have a substantial amount of revenue derived from unrelated business income.

Rule: An organization may have some unrelated business income, but too much can endanger the exempt status of the church.

Unrelated business income is generated from activities that are r egularly carried on; not substantially related to exempt purposes, and trade or business.

Practice Tip: The rules are complicated and there is an exception to every exception. Each activity must be separately analyzed. ...

Image: Lukas Blazek / Unsplash

We recently fielded this question from a church administrator in Virginia:

Is there a minimum gift amount for which a contribution statement must be issued? For instance, if someone visited the church one Sunday and dropped a $10 check in the offering plate, is the church obligated to send a statement?

Churches typically face this question in January, but also may encounter it throughout the year if they issue regular quarterly giving statements.

No law requires the church to issue the donor a receipt. The receipt is issued as a courtesy to the donor to allow them to deduct their contributions. Churches should also be aware that due to changes in tax law there is no longer an incentive for the vast majority of donors to itemize deductions.

If the church issues a receipt, it should meet all the tax requirements to allow the donor to deduct the contribution.We did some research on this administrator's ...

As the current president of the Christian Legal Society (CLS), Attorney Sally Wagenmaker is well-acquainted with myriad potential legal issues facing the church today. With this in mind, she led efforts to add a “Pastors’ Forum” to the CLS national conference taking place this October 31 to November 3 in Chicago.

Editor Matthew Branaugh recently interviewed Wagenmaker about CLS and the Pastors’ Forum, and the ways churches can secure legal representation when needs arise and resources are limited.

What speakers and resources will the Pastors’ Forum feature?

CLS seeks to liberally share its attorney resources with pastors who want to learn about legal compliance, liability, risk management, and best practices for handling legal issues, as well as about legal aid resources and how to shepherd and care for the legal professional within their congregations.

The Forum ...

A new email scam poses a significant threat to employers including churches, says Batts Morrison Wales & Lee (BMWL). The accounting firm issued this warning on September 13:

BMWL has learned from multiple sources about a new attempted scam related to employee payroll direct deposit accounts. In yet another version of “spear phishing,” fraudsters send a genuine-looking email to the payroll department in an organization purporting to be from an employee, requesting a change in the bank account to which the employee’s payroll direct deposit is sent.

BMWL stressed that payroll departments should verify email requests for any changes “with employees independently of email,” which could include a phone call or an office visit.

For more articles on best practices for payroll, see the following articles:

• “Unpaid Payroll Taxes: A Hidden Liability for Churches and Leaders”