Small Church Network – Session 3 - PowerPoint Presentation

Small Church Network – Session 3 Presented By: Susan Aldana – Assistant Controller Jonathan Blaker – director of Treasury David Fisher – Director of Foundations Andre Kierkiewicz - Controller September 30, 2019

Essential Topics in Parish FinanceTaxesUnrestricted Vs. Restricted FundsAuditStewardship and GrantsPlanned Giving SMG Grants New Matching Grant Resources 2

TaxesUnrelated business income tax – 2019 update Clergy Discretionary FundCharitable Contributions ReportingSales TaxesPayroll/Pension Information Reporting Income Taxes Property Taxes 3

Retirement BenefitsPension Defined Benefit 18% of Total Assessable Compensation is contributed by church employer. Pension RSVP Tax deferred retirement savings plan option May contribute any % or $ amount up to IRS max $19,000 – 2019 Ability to transfer assets and change allocation 4

Unrestricted vs Restricted FundsDistinctionResponsibility to honor donor restrictionsFinancial statement presentation – restricted funds separate from unrestricted 2019 change in classification 5

The AuditWhat is an audit?Why do we need one?Internal review.Audit Committee.Audit process. Title I, Canon 4, Section 4.5, Annual Audits 6

The Audit CommitteeHave not less than 3 membersBe appointed by the VestryNot include members who have responsibility for the records to be reviewedMay, but need not, include Vestry members 7

Audit Program SummaryReview prior year auditDocumentationAudit receiptsReview DisbursementsBank Statements and ReconciliationPayroll and TaxesBudget Variances Report 8

Stewardship and Grants9

Planned Giving10

11 “The Minister of the congregation is directed to instruct the people, from time to time, about the duty of Christian parents to make prudent provision for the well-being of their families, and of all persons to make wills, while they are in health, arranging for the disposal of their temporal goods, not neglecting, if they are able, to leave bequests for religious and charitable uses.” - The Book of Common Prayer, Page 445

What is Planned Giving? Planned Giving – ways in which various future gifts can be made to the Church utilizing different vehicles The process may involve Estate Planning – advice from legal and tax counsel in strongly advised Planned Gifts are often associated with legacy giving as the gift(s) can impact future generations

Common Planned Giving Vehicles Bequest in a Will – source of 80% of planned gifts Lifetime Gifts – guidance from legal tax counsel advised Outright Gifts Charitable Annuities (more complex) - fixed income for life - remainder or lead - chartable tax deductions can be taken with lifetime gifts Gifts by Beneficiary Designation Life Insurance Policy Individual Retirement Account (IRA) 401(k) 403(b)

The Current Giving Climate

P L A N N E D G I V I N G T R I V I A Q U E S T I O N S

Question #116What percentage of all charitable gifts made in 2018 in the Unites States were given to religious institutions? A. 29% B. 40% C. 57%D. 22%

Question #217What percentage of all charitable gifts made in 1985 in the Unites States were given to religious institutions? A. 37% B. 40% C. 53%D. 61%

Examples of Giving in the Diocese Bishop Quin Foundation Episcopal Foundation of Texas Our Congregations

Strategic Mission Grants

Strategic Mission Grants

Strategic Mission GrantsFund programs that will result in growing the Church by investing seed money in start-up concepts Foster new relationships with communities and encourage new ideas to build the Church Capital related projects are not eligible for funding Purpose of Strategic Mission Grants 21

Strategic Mission GrantsEncourage congregations to “look beyond their walls” Most grants are paid over 3 Years – usually in declining amounts each year (congregations will typically contribute funds for their proposed initiative) Funding provided by three EDOT foundations Bishop Quin Foundation Episcopal Foundation of Texas Great Commission Foundation Purpose of Strategic Mission Grants (cont.) 22

Internal AssessmentIdentify needWho is underserved in your neighborhoodConsult with EDOT Mission Amplification team Submit Concept via the SMG Website www.smgedot.org Can submit anytime Two Step Process Version in Spanish Process – Where to Begin | Strategic Mission Grants 23

Step #2 – Invitation to Submit an Application SMG Committee will review Proposals at their meetings (they meet four times per year) Committee will decide to: Invite congregation to complete an Application Refer to EDOT Mission Amplification Team with feedback | Strategic Mission Grants 24

Strategic Welcome Grants (SWG’s)

Strategic Welcome Grants (SWGs)Purpose is to fund attractional projects like beautification of campus or evangelism projectsExamples: bathrooms, landscaping, nursery, etc.They are not for deferred maintenance itemsGrant is up to $4,000 of matching fundsGrant is to be submitted to Mission Amp, who will review and recommend to the SMG Committee of GCFPayments are made after the work has been completed and receipts are provided 26

ResourcesDiocesan PersonnelThe Rev. Canon Joann Saylors – Mission AmplificationLinda Riley Mitchell - Chief Financial Officerlmitchell@epicenter.orgAndre Kierkiewicz - Controller akierkiewicz@epicenter.org Susan Aldana - Assistant Controller saldana@epicenter.org27

ResourcesDiocesan PersonnelJonathan Blaker – Director of Treasury jblaker@epicenter.orgDavid Fisher - Foundations & Property dfisher@epicenter.org Zee Turnbull - Human Resources Administrator zturnbull@epicenter.org EDOT: 713-520-6444 28

ResourcesClergy Manual (each priest has a copy)Vestry Resource guide Manual of Business Methods (TEC)Download from Diocesan website: http://www.epicenter.org/diocese/the-office-of-financial-services/ Available in English, y en Español Vestry Resource Guide from Forward Movement The Vestry Handbook from Church PublishingFinancial Management for Episcopal Parishes 29

30 Calendar of Important Dates * Date will vary depending on Council dates January 15th* Churches to submit Parochial Reports January 15 th * Churches to submit Journal Directory, Lay Delegate Certifications and Necrology repots January 15 th * Churches to submit Christmas Attendance and other metrics as requested January 31st Form W-2: Employee‘s Wage and Tax Statement Form provided to all employees, including parochial clergy. January 31 st Form 941: Employer‘s Quarterly Payroll Tax Return File return with the Internal Revenue Service for quarter ending December 31. January 31 st Form 1098: Mortgage Interest Copy of form provided to recipient (for any mortgages held by churches or dioceses). January 31 st Form 1099: INT & MISC. Copy of form provided to recipient. January 31 st Substantiation of Contributions statements provided to donors of gifts over $250. February 28 th Form W-2: Employee‘s Wage and Tax Statement Forms remitted to the Social Security Administration along with Transmittal Form W-3. February 28 th Form 1099: INT & MISC Forms remitted to Internal Revenue Service along with Transmittal Form 1096 March 1 st Form 1099: INT & MISC Forms remitted to Internal Revenue Service along with Transmittal Form 1096 April 30 th Form 941: Employer‘s Quarterly Payroll Tax Return File return with the Internal Revenue Service for quarter ending March 31 May 1 st Churches to Submit Changes to Parochial Reports May 1st Diocesan Journal Volume II Posted June 15 th Diocese to send Lay License reports to churches July 31 st Form 941: Employer‘s Quarterly Payroll Tax Return File return with the Internal Revenue Service for the quarter ending June 30 August 31 st Churches to submit Lay License Applications September 1st (or sooner, as required by Diocesan Canons): Audited Financial Statements of all congregations and institutions to be filed with the Diocesan Office September 1 st Annual Diocesan Report to be filed by all dioceses with the Executive Council/General Convention Office September 30 th Diocese to send Assessment Letters to churches October 31 st Form 941: Employer‘s Quarterly Payroll Tax Return File return with the Internal Revenue Service for the quarter ending September 30 November 1 st Council Registration for Attendees, Volunteers and Exhibitors Open and Forms Posted November 15 th Council Forms emailed to Churches December 31 st Diocesan Journal Volume I Posted December 31 st Assessments due

Q&A