Episcopal Church Foundation Vital Practices - Vestry Papers - Finance and Administration

May 2014
Finance and Administration

Lessons from a Rookie Treasurer

Tyler D. Schleicher

This article is also available in Spanish here. Este artículo está disponible en español aquí.

Life as a church treasurer is tough – I know this. After serving as treasurer for St. Anne’s in Ankeny, Iowa from 2002 through 2011, I have an appreciation for the difficulties of the role. During that time, I tried a number of things to make the job easier – mostly because I didn’t know what I was doing (my only previous experience before becoming treasurer was balancing my personal checkbook), but also because I knew there had to be easier method.

I’m sharing some of my experience in hopes that it might help other novice treasurers.

Use Professional Accounting Software

I came into this role almost completely blind… with no accounting background and less than six months after finding our new church home in Ankeny.

When I first started, we were using the ancient DOS-based Episcopal Accounting Software (EAS). Even in 2002, I knew that program was a dinosaur. Something just didn’t ring true when I discovered the way to enter an offertory check into the system was a series of coded numbers typed into a blank screen. And when the previous treasurer mentioned that we should be able to get the developer out of retirement long enough to get a version that would load with Windows 2000 - I didn’t need to hear anymore…this was a non-starter!

So my first major task was to get a professionally supported accounting program set up on the church’s computer. I wasn’t an accountant and had never really used any accounting software. . I had a ton of things to learn in addition to getting the software and books updated.
Intuit’s Quickbooks was our first purchase. Once it was loaded I set up the accounts similar to the EAS system. Quickbooks’ accounting software package was great at handling basic accounting stuff, but was clearly NOT sufficient for the church needs alone. Specifically, there was no built in method for tracking pledges and donations. I tried to set something up but nothing worked.

We heard about – and attended – a demonstration for ServantPC’s Servant Keeper software. This was the missing link…. Servant Keeper was designed to handle donations and church deposits on a weekly basis and then export directly into Quickbooks. We use Quickbooks for budgets, vestry reports, bills, checks, and multiple accounts and types and Servant Keeper for membership management, donation and pledge tracking (which is almost always multiple accounts per offertory), addresses, and other pertinent parishioner info.

From our perspective, these programs were reasonably priced. We purchased Quickbooks Basic for around $100 (we’ve tried premier and Non-Profit and didn’t find them worth the additional fees). We started with the small-church version of ServantKeeper, also around $100, but later upgraded to the 250-member version to handle visitors, all family members, and external donors. I think that was an additional $100. BUT, we only upgrade once every 3-4 years so these fees are well worth it. Both are easy to use and train on, professionally supported with call-in support, and work well together to make a treasurer’s job much easier!

Implement Automatic Withdrawal

One day I looked at my personal checkbook and realized that I wrote checks for church and that was about it. It was inconvenient to look for my checkbook on Sundays before church and with inconsistent attendance, I occasionally found myself weeks behind on my pledge.

It’s embarrassing for a treasurer to admit that…

But, being the treasurer I did have some say in how we might be able to fix this. I wondered if others had the same problem. I discovered that our pledge performance ranged from 80% to 93% on an annual basis for all pledges combined in the church. Not only did this wild variation from year-to-year wreak havoc on budgets, it also represented a significant reduction of our annual planned income. For example, in 2008 our actual was $19,000 short of the pledged amount and $15,000 less in 2009. Not only were these large numbers, they varied by thousands of dollars from year to year with apparent randomness.

To account for this we plotted the historic results and settled on an average shortfall to use for our budget figures, using 92.5% for several years. More frequent statements to parishioners helped but the yearly income was still anyone’s guess. We could see what was happening… in the winter some folks stay home due to the weather. In the summer, folks take vacations. And when people fell behind by too much, they were unlikely to make it up.

At home, I had switched all of my bills to automatic withdrawal. The basic concept of automatic withdrawal is that a person can allow a business or institution to automatically deduct pre-specified amounts directly from a bank account at periodic intervals. I was comfortable with that system and knew this would make life easier for me personally as a parishioner.

The church leadership team was interested in exploring an automatic withdrawal system for paying pledges. A key barrier was the spiritual aspect of giving in our liturgical church: If parishioners don’t put their pledge offerings into the offering plate, how would their offerings get blessed? I was stumped until I discovered the colorful “I give electronically” laminated cards (http://www.ecfvp.org/yourturn/electronic-giving-card-for-offering-plate/) used at our local Methodist church. These cards gave parishioners something to put in the offertory plate that could then be blessed with the other offerings.

Our next step was talking with our local bank about helping us set this up. When they didn’t seem interested, we decided to look elsewhere. After talking with other local banks, we found one that offered this service for a nominal fee and felt like a good fit with the church.

We worked with this new bank to move our accounts and set up automatic withdrawals for our church. Several of us were trained to set up the forms with parishioners and how to request changes, additions, or deletions. Because the forms weren’t designed for church use, they were somewhat confusing to parishioners. To facilitate sign-ups, the secretary and I filled in most of each form, with parishioners filling in the amount, providing a cancelled check, and signing their names. To keep the bank fees low, we offer up to twice a month automatic withdrawals (first and fifteenth of the month).

In the first year, 40% of our parishioners signed up; the system has been virtually problem-free. There was an immediate – and positive - change in our pledge income and a new stability in our budget. Before automatic withdrawal we had some lean months when we would delay paying salaries, but not after.

Today, around 60% of our pledge members use automatic withdrawal. Not everyone is comfortable giving this way, but it’s okay because many of these members are regular attendees. As of 2013, we have three consecutive years with pledge income above 100%

With 100% coming in regularly, we no longer utilize theoretical percentages for pledge income budgeting. Instead, we use the exact dollar amount pledged (which equates to thousands more in our income part of the budget). There is still uncertainty on the loose plate income, but this has proven to be more stable over the years and also only equates to a fraction of the pledged figure.

Learn to delegate, responsibly

Shortly after becoming treasurer, I found it was taking about four hours a week to get everything done. That did not include worship and other church time and I quickly noticed that my new “job” was competing with other important priorities. One in particular was my new bride. I had no intention of making this treasurer gig into a long-term position but I also didn’t really know what to do to fix the problem. I had committed to doing the job and was only starting to understand everything I was supposed to do. But it couldn’t go on this way for much longer and no new treasurers were lining up to take over for me.

The first thing that helped was identifying the things I was responsible for as a treasurer. In the event of getting hit by a bus, the next treasurer would need to know what to do. Here’s a basic list of the things that seemed to fall under my jurisdiction:

Weekly deposits and offertory tracking
Weekly check writing and bill paying
Weekly account monitoring and transfers to/from savings
Monthly vestry treasurer reports
Monthly bank reconciliation
Monthly salary checks and pulling appropriate withholdings
Quarterly pledge statements to pledgers
Quarterly tax filings for employee tax withholdings
Annual Meeting treasurer report
Annual W-2 forms to all employees
Annual budget creation
Annual Parochial Report filing (financial portion)
Ensuring completion of annual audit

There was a lot of responsibility, and a few duties that were more stressful than others. These were the tasks that, based on my limited background, I had no business doing – like figuring out the withholdings and W-2 forms at the end of the year. I started asking around and found our church had a tie with a local accounting company who had done our audits in the past. After talking with them, they offered what I can only describe as a true gift from heaven. They would be willing to handle the tax portion of the church for us and take the W-2s at the end of the year off my hands. That was a huge relief because I really didn’t feel qualified to do those tasks. The list of tasks shrunk by a couple of items and I was on my way to making this role sustainable.

A few years later, our church hired a secretary. Another blessing. After she was in the position for about six months and a certain level of trust achieved, I started to transition some of the weekly treasurer duties to her. We took it slow and made sure that her hours could accommodate the new work. With this training period, she was able to take on the weekly responsibilities, within her original working hours. I continued to help whenever difficulties popped up and I periodically monitor the accounts.

Before, handling the offertory deposits alone would take a half-hour or more each Sunday; time my family did not really want to share. The offertory cash presented a security question that we wrestled with before arriving at a solution. Our new process has a vestry member count the loose cash from each offertory (a task that usually only takes 5 minutes), marking it in a notebook. This figure is later compared to the cash deposit made by the secretary to ensure no cash was lost from offertory to the bank. The net result of this delegation was that I now had more time with my family and their resentment about the position faded. Our secretary felt she was doing more meaningful work for the church and that she was trusted and valued.

Once these changes were made, the remaining treasurer duties that I personally needed to accomplish included:

Monthly vestry meeting treasurer reports
Monthly salary checks and appropriate withholdings
Annual Meeting treasurer report
Annual budget creation
Annual Parochial Report filing (financial portion)
Ensuring completion of annual audit

I was finally able to dedicate more energy towards strategically important treasury tasks. For example, the vestry was really interested in hearing about giving and pledging trends, what it costs to keep the doors open, and what a typical pledge was worth in our parish. Armed with this information, the vestry was in a much better position to assess the health of the church and make decisions accordingly. One advantage of a donation-based business is that commitment and engagement can be quantified, to some degree, by the trends in numbers of pledgers and total pledged dollars. It can be difficult to use data to make church decisions in most cases, but these trends can help and should not be ignored.

The treasurer role can and should be as a top advisor to the church leadership. It should NOT be looked at as a check-writer and offertory counter. To perform the treasurer position at its best, you will need to identify and focus on those parts of the role that most matter to the health of your church. Find the tools that make the job easier, do everything you can to make life easier for donors, and delegate tasks so you can focus on what matters.

Tyler D. Schleicher is senior warden at St. Anne’s Episcopal Church in Ankeny, Iowa.

Try This: What’s the variance between pledges and actual payments for your congregation? Are you budgeting based on pledges or on the actual amount received in prior years? Go through your records and calculate your pledge performance over the past few years. Share this information with members of your congregation and explore ways to close the gap such as offering automatic withdrawals for pledge payments. Print out the image of St. Anne’s “I give electronically” card [http://www.ecfvp.org/yourturn/electronic-giving-card-for-offering-plate/] and share how it is used to ensure that everyone’s offering is blessed.

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