“Anyone can be a leader during the easy times. It’s only in the hard times that you find out who the really good leaders are.”

When I first heard this insight I knew what kind of leader I wanted to be. These words settled deeply into my conscience and, even today, they motivate, encourage, and guide me to “step up” whenever a challenge arises.

It’s no secret that tough financial times still lay ahead as many churches continue to face decreases in giving and difficulties in managing expenses. At the same time, a surprising number are also seeing giving rise, attendance increase, and ministry expand. In every case I’ve studied personally, the difference between the churches that are thriving and those that are merely surviving can be summed up with this distinctive: they have good leaders. Here’s why:

1. Good Leaders Rally People around Vision. When times get tough, people have a natural tendency to see problems, not opportunities. Good leaders encourage others to keep giving, serving, and caring about God’s work. They remind people that when God casts a vision He never checks with Wall Street.

2. Good Leaders Encourage People to Do What They Can. Far too many pastors worry that they will be accused of being “pastorally insensitive” if they talk about giving in a down economy. This concern is really unbiblical
for two reasons. First, poverty in the 1st century was widespread and far, far worse than anything we’ve ever seen in the USA. Yet Paul still urged Christians to “excel in this grace of giving” (2 Cor. 8:7). That means the capacity to give is a gift from God. Second, the Scriptures never condone pressuring people to give. We see Paul’s “stewardship sensitivity” in 2 Cor. 8:17 -- “For if the willingness is there, the gift is acceptable according to what one has, not according to what he does not have.” So combat the negative news in the media and invite people to experience the blessings come from consistent giving and serving.

3. Good Leaders Build a Financial Team to Help Them Plan and Implement. You may not know budget planning, expense control strategies, and prioritizing resource allocations but you probably have people in your church who do. By all means, don’t carry the burden all by yourself! Whether you find help from your staff or from willing volunteers in your church, take full advantage of their skills. Do not ignore problems, either. They won’t simply go away. Address them directly and you may be surprised to find a solution is closer than you thought.

4. Good Leaders Embrace Challenges as a Way to Learn New Skills. Think back to your most valuable learning experiences. Were they discovered during easy times or difficult times? More than likely, you learned the most when you were pushed the hardest. For some reason, we almost never learn much when “life is good.” We tend to coast. So, while tough times may not be very fun, they can also provide the context and the catalyst to make wiser, more knowledgeable, and more resilient. Robert Schuler once wrote a best-selling book entitled, Tough Time Never Last, But Tough People Do! That’s a great title. It’s also a good read.

5. Good Leaders Watch Out for Fatigue. During tough times, most people either find a way to adjust or they give up. With the current recession dragging on, this is warning for you to not let crisis become your primary focus. Good leaders know the value of quick breaks to clear their minds. Good leaders also stay alert for examples of how God has been at work during the struggle because they trust He is always at work (John 5:17). Share examples of how God is meeting needs and touching lives with your people. It will inspire them and you. As step 3 noted, good leadership, planning, implementation, and the help of the Lord will bring results.

6. Good Leaders Place a Premium on Personal and Corporate Integrity. A byproduct of the credit and banking crisis has been a widespread, unbiblical attitude about the repayment of debt. Surprisingly, this view has even infiltrated the thinking of more than a few pastors, too. Some, when faced with the need to make their payments or cut expenses to the bone, have decided it’s OK to let their loan payments go into default. This decision calls to mind the chilling words of Psalm 37:21, “The wicked borrow and do not repay…” As Christians, we are called to higher standard. We must always tell the truth to our people about the needs and issues we’re facing (Co.. 3:9. Eph/4:15). That will create trust and motivate help. We must also keep our word to repay our debts. Not only is that a hallmark of good leadership, it’s an indicator of genuine spirituality.

7. Good Leaders Take Action! When it comes to dealing with financial crisis, simply “hoping things get better” seldom works. Spending more than what comes in is a recipe for disaster, whether you’re talking about a business, church, school, or family checkbook. If you see a steady drop in income, cut expenses to match the drop. As soon as you know what to do, do it as quickly as you can. There is a time for study and deliberation but there is also a time for action.

Now is the time to refocus on the basics of spiritual leadership, to reemphasize the top priorities of your ministry, and to work hard to learn new leadership skills that may have escaped you so far. With God’s help and the ongoing support of those alongside you, these tough times can actually become a tremendous way for you to “step up” your leadership efforts. The results will be written in eternity!

Dr. Kregg Hood
Senior Vice President
Loan & Capital Solutions

Even through the recent recession, AG Financial Solutions has continued lending to churches from coast to coast. While other lenders remain tied to the terms of the government or financial markets, AG Financial Solutions has stayed the course, maintained cash to lend, and has even lowered loan interest rates. This level of discipline stands in sharp contrast to being tied to the volatile swinging of the market.

If ministry growth is your objective, now is the time to finance your vision with a loan from AG Financial Solutions. Any church seeking to finance a building--or with a current loan that's about to balloon or adjust to a higher rate--can receive a free loan analysis quickly and easily.

Contact Loan Solutions at 800.449.5626 or loans@agfinancial.org for details, and find out why AG Financial Solutions is the nation's leading ministry lending institution.

The IRS is establishing new correction program procedures under the Employee Plans Compliance Resolution System (EPCRS) for 403(b) plans that are not in compliance with the new regulations. The details on the EPCRS program will be announced at a later date. If you would like an email alert when this information is available, please submit your information below.

 This information and the information contained in links are not considered legal or tax advice. AG Financial Solutions and MBA are available to give guidance and assistance to your ministry but we recommend you consult your own tax and legal advisors.

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View the 2009 Annual Report »

Kregg Hood
Senior Vice President
Loan & Capital Solutions

From Charisma & Christian Life magazine, October 2009. Copyright 2009 Strang Communications; all rights reserved. Used with permission.

IMPORTANT: All of the following conditions must be met in order to have the extended deadline:

• The employer must adopt a written plan by December 31, 2009, that is intended to satisfy the requirements of 403(b) and the regulations.

• During 2009, the plan sponsor operates the plan in accordance with a reasonable interpretation of 403(b) and the related regulations.

• By the end of 2009, the employer makes its best effort to retroactively correct any operational failure (that is, a failure to meet the written plan/403(b) requirements) during the 2009 calendar year to conform to the written plan.

We encourage you to create a written plan as possible. If your ministry has not completed this document, click here to finish that today. For assistance, contact us at 800.622.7526 or e-mail us at 403bRegs@AGFinancial.org

Click here for more information on 403(b) Compliance Regulations »

• Sloppy and unprofessional in presentation;
• Contain numbers that don’t add up (for example, where total assets does not equal total liabilities plus fund balance)
• Contain amounts that look unreasonable based on the size and activity of your church (for example, recording loan proceeds as income will overstate income); 
• Omit key balance sheet amounts, like property and equipment, accumulated depreciation, principal balances of loans, etc.

You should know these errors are usually “deal breakers” for the outside party, because they foster a lack of confidence in your ability to record and communicate financial  information. You can put your best foot forward with potential lenders and donors by  keeping your books in an orderly manner and making sure your financial statements are professional and accurate!

Dave Dallenbach
Loan Consultant
AG Financial Loan Solutions
DaveD@NJAG.org

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(Note: It is assumed that you have already organized a qualified building committee and have policies and procedures in place for them to follow.)
 
Determine Your Budget
The first and most important step is developing your budget. Without knowing how much you can afford almost all of your efforts and money spent on an architect will be wasted. Contacting a reputable church lender with a qualified consulting team is the best way to do this. They will assist you in determining what you can afford.

Cash on hand and money that you designate from your general operating funds are the least expensive sources of funds, but usually the smallest amount of money available too. Money that is raised through a professionally led capital stewardship campaign is the next least expensive source of cash. Sometimes there is property to sell. The last source of funds is what you can borrow. This is also the most expensive source, so every effort needs to be made to keep this amount as low as possible and to pay it off as soon as possible.

The total of all these sources is your maximum budget. Because there are many unknowns and uncontrollable things that will arise, in addition to the fact that it takes significant time to actually get to the project (usually at least a year or two), it is a good idea to reduce your budget by 20-25% to be assured that you will be able to complete the project in the end.
 
Develop a Rough Project Outline
What do you need? What do you want? Dream a little, have your leadership team dream with you. Recognize that all of this will need to fit within your budget, so prioritize your list, as some things may need to be postponed to a later phase. Don’t be too concerned about the specifics now. After you hire your architect these things will be brought into place as you focus on your top priorities. Also recognize that your needs should always supersede your wants.

Develop a Potential Candidate List
As you are dreaming and developing a rough project outline also start building a candidate list. Talk to other churches that have just completed projects. Visit churches and make a list of your likes and dislikes. Talk to the senior pastor, staff members, custodians, etc., as you visit the churches. They give great insight into “We wish we would have done this differently.” Your list should probably have 5-10 potential candidates.

Write a Request for Proposal (RFP) and Contact Each Candidate
This is a critical step and it is intended to pre-qualify the candidates. Your RFP should clearly state your budget, (not your maximum but the amount that is 20-25 % lower than your maximum), your basic desires for the project (rough outline), and specific questions to be answered about the process, the cost, and what is and isn’t included. You should ask for the costs to be itemized by phases (ie: master plan, design development, schematics, construction documents, etc.). Your RFP should give a deadline for a response. The more detailed you are in your RFP the better your responses will be. Send the RFP to all of your candidates.
 
Review Proposals and Choose Finalists to Interview
Once you receive all of your responses/proposals, be sure to note if they responded to your specific requests and questions. Also note the timeliness of their response. If they did not respond to your specific requests and questions or missed your deadline that should be a major red flag. Review any other information, brochures they may have sent, and check their references. It would be a good idea to contact all the churches they list in their brochures and ask those churches for additional references. After doing this you will probably be able to reduce your list of potential candidates to about 3 that deserve an interview with your building committee team.
 
Interview, Choose and Sign Contract
Assuming they meet all of your other qualifications, preferential consideration should be given to those located in your general region. They understand construction, codes, etc. in your area. Ask them to tell you about the projects shown in their brochures. Give particular attention to those that are “sketches” not photos. That could be significant in your decision. Remember architects get paid for drawing pictures, not constructing the buildings. You want an architect who will design something you can afford to actually build. Many of the “sketches” shown in an architect’s brochures may never be built because the church couldn’t afford it. You need an architect who knows your budget and will not exceed your budget with his grandiose designs. This cannot be emphasized enough. You also want to question the architect about his willingness to involve the contractor early in the design process. The earlier the better as the contractor gives great input into the cost as well as what can and cannot be done.  
 
Quite often your final choice has risen to the top during the interviewing process. If not, you’ll need to choose. Once chosen be sure you sign a contract. They will probably offer a standard AIA contract, but read it and make sure it fits your specific needs. If not, make sure it is revised so that it does fit your needs.

Now you are ready to start the architectural planning for your project!
 
Wendell Kruger
Vice President
AG Financial Loan Solutions
wkruger@agfinancial.org

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• What is the builder’s history of on-time performance?  
• What is the builder’s history of staying on budget? 
• How does the builder handle change orders? 
• What warranty does the builder offers? What is his history of satisfying the client in warranty work? 
• Does the builder only build churches?  If not, how many churches has he built? 
• How does the leadership feel about the person who represents the company?  

Remember, you may spend 18 months to 2 years working with the person.  Do  not underestimate the importance of personality.

• Does the builder offer a Guaranteed Maximum Price?
• How does the builder handle issues of disagreement with the client?  Ask the builder to give you the name of a church where the project did not go as well as  the client anticipated. How was the issue resolved? 
• Don’t just ask the builder for references.  Ask the builder to supply you with the name of churches they have built.

A good builder wants to come as a partner and will desire to bring the project to completion on time and within budget:  Examining their performance history will be a good barometer of what you might anticipate with your project.

Dave Blattner
Loan Consultant
AG Financial Loan Solutions
dblattner@agfinancial.org

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We hear lots of bad news these days, don’t we? Turn on the TV or radio and it won’t be long before a news reporter or talk show host points out the latest round of negative economic news. Spreading fear is keeping the media in business. Only a foolish or hard-hearted person would doubt that our nation is facing difficult times. But, there is another voice that needs to be heard. It is the voice of God. And you, as a faithful minister of the gospel, have the opportunity to speak for the Lord against fear.

Our leadership team at AG Financial Solutions knows that you are on the front line of ministering hope to people. We also know how easy it is, even for those in ministry, to be worn down by negative news. That’s why we have developed this sermon resource.  Here’s the simple faith strategy we’re encouraging you to follow:

Pray – Ask the Lord to give you new and better ways to preach and model trusting God. While the essential faith themes are not new, the approaches we use must be refreshed and updated often, especially in difficult circumstances. I’m often reminded of the old phrase, “Beware of the barrenness of a busy life.” Listening to a constant barrage of negative news will definitely leave you feeling barren. Focus on hearing the still, small voice of God.

Prepare - Many churches today are familiar with series preaching and I’ve always liked the month-long format. However, you may only feel you need a week or two of emphasis on this topic so, whatever your preference, use these outlines as you see fit. In fact, if you develop different outlines, please send us a copy so we can share the best examples and learn from each other.

Preach – Stay positive, practical, and personal. Don’t be afraid to preach on how God has led you and others you know through difficult times. It is always in the darkness that light shines the brightest.

May the Lord use you to lead your people to financial freedom as you teach God’s promises, especially during this unusual time.

Your fellow preacher and Freedom Fighter,

Kregg R. Hood, Ed.D.
Senior Vice President
AG Financial Solutions
Springfield, Missouri

Positive, Motivational Tone

A positive tone in your messages sets the stage for victory. It should convey that you understand there will be challenges, but that you know God is the answer. Have every sermon provide practical ways for people to take a step up in how they trust God.

God-Directed

Study and pray over each sermon outline. Then, determine what you think God wants you to present to your listeners that will show His faithfulness in the midst of contemporary situations.

Share Your Struggles and Your Victories

Your personal experience is powerful and real. People will follow you as they sense that you understand their fears. At the same time, they need to see that you are a fellow person of faith as well as their leader able to overcome challenges the enemy might throw their way. Personally, I always try to preach first to myself and then to my listeners.

Personalization & Illustration

Obviously, these outlines are just detailed suggestions. No preacher is exactly like any other, so adjust the wording to fit your personal communication style. Add up-to-date statistics and situations that fit your region of the country. Be as fresh and timely as possible. Weave in sermon illustrations and personal stories from your congregation or ministry experiences whenever possible. There are a number of sermon illustrations in the outlines, but always stay alert for ones that fit you or your listeners even better.

Length

Each lesson takes about thirty minutes to preach. Your time could vary due to many factors, such as your speaking rate, the amount of material you use from each outline, and new material you develop.

Download the complete From Fear to Faith Leaders Guide

I would recommend a combination of the two. Establish your new budget based on prior year history and then adjust it for any materially known specific income  or expenses that were not common in prior years.

Income should be adjusted up or down based on the trend of increase or decrease of the prior year.  Any specific projects, fundraisers or miscellaneous funds can be added as needed.

Expenses should be based on reviewing the trends of the last couple of years. However, be as specific as possible for major expense areas like salaries, mortgage payments, missions, etc.  This will create a good balance between time  spent and accuracy for your new budget.

Remember, it’s okay to adjust your budget as the year progresses. Remember, the budget is not your master, but a management tool to help you make good financial decisions. It’s all part of being a good steward of what the Lord has given you.
 
Terry Steen
Consultant
AG Financial Loan Solutions
tsteen@agfinancial.org

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Most lenders place considerable emphasis on assessing the overall character of the borrower. Specifically, will the church honor its commitment to repay the  loan? In evaluating this measure, lenders look for a long history of operations, a  good credit history, and strong, committed church leadership.

The second focus is on cash flow. Lenders want to see a track record of positive income and attendance trends as well as a positive operating margin (revenues in excess of operating expenses). Flat or declining attendance or income can be a concern and operating losses mean that it may be difficult for the church to absorb a monthly mortgage payment within its budget.

Finally, lenders need to know that the amount of collateral (real property such as land and buildings that will secure the loan) is sufficient to repay the loaned funds in the unlikely event of default.

Churches interested in securing a loan with favorable rates and terms should be prepared to demonstrate strong performance in each of these three areas. 

Randy Smith
VP, North Central Region
AG Financial Loan Solutions
rsmith@agfinancial.org

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Recent studies show that Generation Xers are giving nearly twice as much to charity on average compared to older generations. David Stillman, coauthor of When Generations Collide, says that Gen Xers may be giving less simply because they have not been asked. So what we need to do is connect with the Gen Xers of our churches so that they become the next generation of exceptional givers. The Gen X group has some interesting traits, and the following may help you tap into this incredible resource:

• Invite them to participate.
• Provide access to information and resources; Gen Xers have inquiring minds, and you must articulate the mission and purpose of your ministry.
• Gen Xers like to volunteer. Take deliberate steps to create programs and opportunities aimed at their interest and values.
• Gen Xers love action, not talk, and are attracted to work and programs that directly reward personal initiative.
• Take time to listen. Gen Xers want to interact, share, become part of the story, bring their talent or gift to the table, to be seen and heard.
• Recognize and appreciate. Reward the results of their efforts, involvement, and giving in a timely, specific way.
• Make the ministry fun. Fostering a spirit of fun in the organization will improve their morale, increase involvement, and excite giving.

With proper guidance your Generation X congregation can become the empowered, faith-filled, dynamic stewards that we need to see the church survive—and thrive.

Edward Davis
Consultant
MasterPlan Stewardship Campaigns
EDavis@AGFinancial.org

Leadership must make an intentional decision to create a culture of generosity and then be the first to model generous giving. Seldom if ever will people rise above the level of leadership that is demonstrated to them.

Confident and consistent preaching on biblical stewardship is very important. If you preach on giving, giving will go up. The challenge is to sustain that inspiration over time. A pastor friend of mine says that every service should have a main sermon, a mini-sermon for the altar call and a mini-sermon for the offering. I’ve been in his services and when the offering mini-sermon was finished, I was excited to give.

The people at his church respond generously each week because the church celebrates giving! In my opinion, celebration is the most effective way to nurture a culture of generosity. In my visit to the church, it was so refreshing to hear the congregation being congratulated for their generosity. They were reminded of the many people that are ministered to because of their faithful giving. Giving was presented as an awesome privilege and as something that distinguishes them as a church.

People in the church will understand what the church values by what the church celebrates. Find examples of cheerful giving in your church, share those stories, and then celebrate. Be consistent; it will take time to create a new culture of generosity, but it will happen.

Phil Drost
Senior Consultant
MasterPlan Stewardship Campaigns
PDrost@AGFinancial.org

The disciples were courageous and took a step of faith at the prompting of the Holy Spirit. In spite of this impending famine that would affect their own lives and futures, the disciples willingly gave to help others in need. Their action was not an emotional reflex to a sad story, but a deliberate decision on their part

Every financial decision we make is a stewardship decision. Even during difficult times, God may lead you to help someone in need. He may even challenge you to meet a greater need; to expand His Kingdom on earth through an investment in reaching the lost – people you may never even see.

In the difficult economic times we face today, the Church must remind God’s people of His provision. If the willingness is there, the wealth to do what God calls you to do will follow your act of obedience. He is wiser than we are, and will never challenge His Church and His children to a task unless and until He is prepared to help them resource it.

Larry Russell
Vice President
MasterPlan Stewardship Campaigns
LRussell@AGFinancial.org

A well defined process is necessary to optimize efforts and will lead to significant financial commitments.

The campaign plan should have a prayer team that will surround every step of the process with prayer.

To be a compelling reason for people to give, the vision must be more than a building; it must be changed lives.

The congregation must see passionate, visible participation by leadership as the campaign will not only work to develop current leaders in the church but also help identify new leaders.

As the campaign serves to create a new sense of ownership and responsibility, people will become owners of the church and its vision rather than consumers of the church’s ministries.

A well-designed campaign will make efforts to include everyone in the process.

Good stewards make good givers. The campaign should focus on and teach biblical stewardship principles, reaching all age groups; children, teens and adults.

People are more likely to give when they are inspired by leadership. A pastor that is passionate about the project is imperative to the success of a campaign.

Phil Drost
Senior Consultant
MasterPlan Stewardship Campaigns
PDrost@AGFinancial.org