Courage

Max Lucado shares a story of a decisive battle fought in 1066. 

William, Duke of Normandy, dared to invade England. The English were a formidable opponent anywhere, but next to invincible in their own land.

But William had something the English did not. He had invented a device which gave his army a heavy advantage in battle. He had an edge: the stirrup.

Conventional wisdom of the day was that a horse was too unstable a platform from which to fight. As a result, soldiers would ride their horses to the battlefield and then dismount before engaging in combat. But the Norman army, standing secure in their stirrups, were able to ride down the English. They were faster and they were stronger.

The stirrup led to the conquest of England. Without it, William might never have challenged such an enemy.

Because they had a way to stand in the battle, they were victorious after the battle. 1

Courage to stand in battle is essential to bring victory. The increasing pressures of our day suggest it is time for us to level up in terms of courage.

What challenges do ministries face today? Let me suggest a few. The recession officially ended in 2009, but most folks across the U.S. apparently haven’t received the word. While overall giving is up to ECFA members, the solid increases in giving to larger ministries masks the overall decreases in giving to smaller ministries—you may be serving an organization that sees giving decline each year.

The rapidly changing social climate is also impacting many ministries. Continued threats to reduce charitable giving incentives are troubling to many. You may be experiencing unexpected staff transitions. There are often challenges to find quality board members.  Perhaps there is a lawsuit here or there. The list goes on and on.

Yes, courage is definitely required to lead a Christ-centered organization today!

It is easy to use courageous words. But courage takes more than words—it requires action of leaders in the context of their beliefs. There is an increasing appreciation for words backed up by courageous action—because we are seeing far too many words that are not backed up by any action, let alone courageous action.

Three things happen when courageous leaders stand in battle:

1. Victory is assured. “Those people who keep their faith until the end will be saved” (Matt. 24:13);
2. Accomplishment is assured. “The Good News about God’s kingdom will be preached in all the world, to every nation.”  (Matt. 24:14); and 
3. Completion is assured. “Then the end will come” (Matt. 24:14).

A courageous leader is eager for the fray. Staff do not want to go to sea with a captain who would rather stay in port.

A courageous leader abhors the status quo, paves the way for change, and brings continuous renewal to the organization.

Courageous leaders make bold moves. “You will never take big hills without making bold moves. The alternative is incrementalism. ... Make a few bold moves, or you’ll breathe your last leadership breath far too soon.”2

A courageous leader sets the tone for integrity at the top of the organization, realizing that integrity rarely starts at lower levels of an organization and works its way up.

A courageous leader bravely pours oil on troubled waters, directly communicating with those who may have been offended.

A courageous leader discerns consequences—is not blindly courageous—looks through the lens of experience and failure … the lens of the future.

A courageous leader is vulnerable, obedient, and humble. “Jesus was so vulnerable that He was perceived to be weak, He was so obedient that He opened himself to the charge of insanity, and He was so humble that He became the object of contempt.”3

A courageous leader does what Jesus did—becomes dispensable, approachable, and touchable.

A courageous leader delegates authority. When Jesus delegated authority to His disciples to heal the sick and cast out demons, He never took it back.

A courageous leader knows when his or her work is done. Jesus knew when His work was done and when it was time to leave. He let go at the peak of His power and counted on the Holy Spirit to fulfill His promises to us.4

Courageous leaders go the distance. The Brazilians have a great phrase for this. In Portuguese, a person who has the ability to hang in and not give up has garra. Garra means “claws.” What imagery! A person with garra has claws which burrow in the side of the cliff and keep him from falling.5

It’s not the gifts we have cultivated, the lessons we have learned, or the goals we have achieved as leaders. It’s about the courage to rely on God (Zech. 4:6).

1    And the Angels Were Silent, Max Lucado, Multnomah Press, 1992, p. 123–24.
2    Axiom, Bill Hybels, Zondervan, 2008, p. 33.
3    Christ-Centered Leadership, David L. McKenna, Cascade Books, 2013, p. 46.
4    Ibid, p. 47.
5    And the Angels Were Silent, Max Lucado, Multnomah Press, 1992, p. 123.

A Deficit of Trust and Truth

Trust is difficult to earn, easy to lose, and even more difficult to regain. 

It has been said  “Trust leaves on horseback and returns on foot.” If true, there is no wonder it feels like the Kentucky Derby, Belmont Stakes, and Preakness Stakes have all three been running 24/7 in some high circles in the United States.

As just one example, with disturbing disclosures made in May of this year, the current trust deficit of the IRS is hard to measure. Five nonprofit IRS officials have been replaced—some whom I have known, some with whom I have had private meetings in the recent past, including Lois Lerner—are all gone. Then, there were the extravagant IRS conferences, the line-dancing video, and more. Clearly, trust left the IRS on horseback.

What can we learn from this? If we as Christian leaders desire to be trusted, just saying “trust us” is not enough. We must demonstrate trustworthiness. We must lead organizations in which people can place their trust and be assured that their trust will not be betrayed. 

Trust and truth are inextricably intertwined. People may not trust us even though we tell the truth, but not telling the truth ensures lack of trust. 

The Bible provides the baseline for truth: “Whatsoever things are true, whatsoever things are honest, whatsoever things are just, whatsoever things are pure, whatsoever things are lovely, whatsoever things are of good report; if there be any virtue, and if there be any praise, think on these things” (2 Timothy 4:8).  

Francis Schaeffer said, “Today not only in philosophy but in politics, government, and individual morality, our generation sees solutions in terms of synthesis and not absolutes. When this happens, truth, as people have always thought of truth, has died.” And Sir Winston Churchill once said, “Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened.”

How can Christ-centered organizations be beacons of trust and truth in an environment where these qualities are often lacking? Let me suggest a few principles.

Exemplify truth in all we do—internally and externally. For our organizations, it means truthfully accounting for our operations and ministry outcomes. Exemplifying truth starts with a keen understanding of what is true and false.  


Add clarity to truth. Start with truth and then add clarity. Nowhere is this needed more than in our communications with our constituents, especially with givers and potential givers. There is often a tendency to be expansive in explaining ministry accomplishments. After all, isn’t it all about how much ministry impact we can claim? Fuzziness—or worse, exaggeration—in our funding and other communications can easily turn into lost trust. The concepts of truthfulness in our communications with givers are embedded in ECFA’s stewardship standards. They are increasingly important as givers tend to focus more on ministry outcomes.


Be exemplary in managing resources. One of the key ways we gain trust is how we steward God’s resources. Christ-centered organizations are not unlike the people described in the parable of the talents—we all have different amounts of resources with which to work. Yet, we are all called to steward what we have been given as unto the Lord.  

From the parable, we see that the servants didn’t get to keep the money for themselves. The two successful servants aren’t working for their own increase—they are working for the increase of their master. Their true reward is sharing in their master’s happiness, and their own happiness comes from serving others.

So it is with us. We are stewards of the Master’s money. We don’t get to keep it for ourselves. We are working for the increase of our Master!  

Enhancing trust is what ECFA does. For 34 years, the ECFA peer accountability concept has had a tremendous impact by creating and maintaining trust. But, in the final analysis, it is up to you—up to your organization—to create and maintain an atmosphere of trust with your constituents. May it be said of us: “The works of his hands are faithful and just; all his precepts are trustworthy” (Psalm 111:7).

Then and Now

“If ECFA had not been formed, another organization would have been needed to fill its role,” said Lauren Libby, ECFA board member and TWR president.

Still, questions are sometimes asked, such as “Where would we be if there were no ECFA?”; “Why ECFA?”; and “Why does ECFA get to set biblically-based standards for nonprofits in the areas of sound governance, financial oversight and accountability, and stewardship practices?”

To answer these questions, it is helpful to take a brief look at history. Thirty-four years ago, there was no evangelical organization setting standards for sound governance, financial oversight and accountability, and stewardship practices.

Billy Graham and a handful of other leaders had a vision to serve the evangelical community by forming ECFA. They envisioned an evangelical organization which set high standards, accrediting other evangelical organizations. Ministries would voluntarily apply, requesting to be held accountable for compliance with the standards.

The leaders knew that ECFA would not provide integrity to a ministry; ECFA accreditation would be an external reflection of a ministry’s internal integrity.

In 1979, significant questions were being raised about how certain religious leaders were handling funds provided by their supporters. In those days, the media was quick to criticize ministry leaders and extrapolate the misgivings of a few to the entire religious community. Sound familiar? There is generally a similar rush to judgment by today’s media.

Thirty-four years ago, ECFA took a stand on behalf of religious organizations—for self-regulation and against additional government oversight. Today, through the Commission on Accountability and Policy for Religious Organizations, ECFA is doing exactly the same thing as it facilitates responses to Senator Charles Grassley on a host of nonprofit tax policy issues.

Commission Chairman Michael Batts said, “ECFA exists to foster a policy of integrity in the form of self-regulation and accreditation without burdensome government regulation. That’s what ECFA exists to do. It is an opportunity to provide meaningful input into these areas that will really make a positive difference for the Kingdom.”

So, what are the differences between then and now? Then, there were no standards for governance, oversight of finances, and the raising and handling of charitable gifts. Then, there was no peer group to accredit evangelical organizations—no standards to achieve and no accreditation of Christ-centered organizations.

Now, ECFA’s standards are a model for the Christ-centered arena and other accrediting organizations. Even the Internal Revenue Service has come to embrace some of the governance principles of ECFA’s standards as their own.

Today, ECFA has a time-tested approach of accrediting Christ-centered organizations and assuring their supporters that they are complying with all of the standards—all of the time.

Today, more and more givers look for the ECFA seal of approval. ECFA helps accredited organizations operate within the ECFA guideposts—think of them as a guardrails or bumper guards. These guideposts allow more freedom to provide ministry within the parameters than if there were no standards to follow.

What was once a dream has become a reality. Today nearly 1,750 Christ-centered organizations, with 1,200 related entities and programs, are demonstrating integrity in that they utilize independent boards, engage independent CPAs for their annual financial statements, avoid conflicts of interest, handle charitable gifts with care, and much more.

So, “Why ECFA?” Because for more than three decades, ECFA has modeled consistent, confidential, and fair application of high standards—many of them beyond the law. The ECFA seal enhances trust of givers, providing increased resources for ECFA accredited churches and nonprofits to fulfill the Great Commission. Christ-centered organizations increasingly want to participate in ECFA’s peer accountability process, so they can show third-party accreditation as evidence of integrity, transparency, and accountability.

Religious Liberty

We are in the midst of an era of religious liberty challenges.

Religious organizations and religious communities are faced with this new reality: The federal government has decided that it can and should define two classes of religious organizations, two kinds of religion, and two degrees of religious freedom. Churches, being inwardly oriented, get an exemption—full protection for their convictions and practices. All other religious organizations, being outwardly oriented on service and not only inwardly on worship, are not exercising pure religion, according to the government, and thus only merit a lesser degree of religious freedom—an “accommodation.” This deeply mistaken conception is the biggest problem underlying the contraceptives mandate under the health care law.¹

But it doesn’t stop there. “[T]he deeply troubling contemporary trends [are] for laws and regulations themselves to be less accommodating of religion, and for constitutional interpretive schemes to prioritize other values over religious freedom. If these trends continue, then fewer religion-accommodating rules will be allowed to stand, and then fewer court decisions will end up favorable to religious exercise by individuals or institutions.”²

Some positive news came last year with the U.S. Supreme Court’s unanimous Hosanna-Tabor decision, upholding the right of religious organizations to select their ministers without governmental interference.³ Consistent with First Amendment guarantees of religious freedom, the Supreme Court recognized that religious organizations should be autonomous in important matters of self-governance.

Since its founding in 1979, ECFA has played a vital role in preserving the freedom of Christ-centered organizations to carry out the Great Commission. ECFA is unique in that it facilitates an environment for organizations in the Christian faith community to exercise self-government and demonstrate appropriate accountability, alleviating the need for burdensome government oversight.

Critical to ECFA’s success in this area are its time-tested standards requiring accredited members to operate with biblical integrity and excellence in the areas of governance, finances, and fundraising.

Especially in recent years, concerns have been voiced by some donors and lawmakers that leaders of certain nonprofit organizations and related parties are abusing their organization’s tax-exempt status by receiving excessive compensation or other unreasonable financial benefits. In response, the ECFA board has just approved an enhancement to ECFA’s existing standards, including a policy for excellence in compensation-setting and related-party transactions. In doing so, ECFA once again takes a leadership role in promoting and upholding the highest degree of ethical standards within the Christ-centered nonprofit community.

ECFA’s history and present activities demonstrate its strong commitment to religious liberty:

• ECFA’s founding. ECFA was formed at a time when the behaviors of some religious institutions caused concern and distrust with the giving public. 

Leaders in Congress began to question whether they should step in to provide additional government oversight to ensure tax-exempt religious organizations were operating ethically and within the bounds of the law.

Senator Mark Hatfield met with Christian leaders and encouraged them to form a group where interested organizations could demonstrate integrity and accountability to their donors and the government and, in turn, avoid the need for new burdensome legislation.

• Commission on Accountability and Policy for Religious Organizations. The Commission was formed in 2011 at the request of Senator Charles Grassley. 

The senator’s inquiry into the financial practices of several media-based ministries raised issues concerning whether new legislation would be necessary to regulate the activities of churches and other religious nonprofit organizations.

Senator Grassley turned to ECFA to address the tax and policy issues raised by his staff’s inquiry. In doing so, he recognized ECFA’s proven track record of self-regulation to avoid unnecessary legislation and preserve religious liberty: “The challenge is to encourage good governance and best practices and so preserve confidence in the tax-exempt sector without imposing regulations that inhibit religious freedom or are functionally ineffective.”⁴

ECFA formed the Commission and its panels of religious sector representatives, nonprofit sector representatives, and legal experts—comprised of experienced leaders known for their integrity—to provide input on these issues.

In the Commission’s report, Commission chairman Michael Batts commented, “Religious freedom is one of the most sacred freedoms we enjoy in the United States and it must be preserved. Religious and other nonprofit organizations positively impact our society in virtually every aspect of life, and their good work is immeasurable. We cannot allow the behavior of a few outliers in the religious and nonprofit sector to threaten the freedoms of those who are not the problem—those who are doing the good work.”

ECFA continues to play a vital role in preserving religious freedom in this country by facilitating an environment of self-government and self-regulation within the Christ-centered nonprofit community. The recent enhancement of the ECFA standards and the latest work of the Commission demonstrate this ongoing commitment by ECFA consistent with its founding over 30 years ago.

The exponential growth of ECFA in recent years demonstrates that Christ-centered organizations are now more interested than ever in assuring the government and the giving public that they properly steward God’s resources with which they have been entrusted.

¹ Stanley Carlson-Thies, Institutional Religious Freedom Alliance, eNews for Faith-Based Organizations, November 14, 2012.
² Stanley Carlson-Thies, Institutional Religious Freedom Alliance, eNews for Faith-Based Organizations, September 11, 2012.
³ Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC, 132 S. Ct. 694 (2012).
⁴ Press Release, Sen. Charles E. Grassley, Grassley Releases Review of Tax Issues Raised by Media-based Ministries (Jan. 6, 2011), available at http://www.grassley.senate.gov/news/Article.cfm?customel_dataPageID_1502=30359.

Doing Well

Ever get tired and want to quit? I certainly have. And, there are certain times in life when we should quit. When we discern what we are doing is not in accordance with God’s plan, we should quit. If we are headed in the wrong direction, we should quit traveling that way. When our “passion has dried up,” as Hans Finzel puts it, “it’s time to go.”

Just tired while doing well? This is not a reason to quit. “And let us not be weary in well doing: for in due season we shall reap, if we faint not” (Gal. 6:9 KJV).

In 1945, Branch Rickey signed Jackie Robinson to play for the Brooklyn Dodgers and be the pioneer to finally break the integration barrier for baseball. Subjected to threats, taunts and humiliation, Jackie could have turned back, but few would have remembered him. For Jackie Robinson and for us, the margin between success and failure is often measured by our perseverance.

These are truly days that try our souls. As I talk to religious leaders, they highlight the increasing opportunities to serve compared with the limited financial resources at their disposal. Believers continue to be committed to supporting local churches and other worthy ministries, yet the impact of the national economy, including high unemployment and low investment returns, is being felt by Christ-centered organizations.

Few are the religious organizations that have not cut staff, reduced benefits, and eliminated programs. These are challenging days with no short-term relief in sight.

Yes, there is a danger of becoming weary in doing well.

John Piper observes, “Almost every one of you can think of something you were enthusiastic about recently, but now the joy is faded. Your first day of vacation on the coast the sunset was breathtaking and made you so happy you could sing. But by the end of your stay you hardly noticed it anymore. Vacationers get tired of sunsets, millionaires get tired of money, kids gets tired of toys, and Christians get tired of doing good.”

But this is no time to even consider losing heart. The Apostle Paul is saying there will be a payday someday. And the charge to keep on keeping on is motivated by the prospect of future reward. As John Wesley put it: “Do all the good you can, in all the ways you can, to all the people you can, as long as ever you can.” In short, don’t lose heart in spending yourself in love.

The prophet Isaiah said it well: “But they that wait upon the LORD shall renew their strength; they shall mount up with wings as eagles; they shall run, and not be weary; and they shall walk, and not faint” (Isa. 40:31).

Paul recognizes the direct correlation between persistence and motivation as he urges his readers not to “grow weary” or “lose heart.” John Stott observes that “active Christian service is tiring, exacting work.” So the apostle gives us this incentive: He tells us that doing good is like sowing seed. If we persevere in sowing, then “in due season we shall reap, if we do not lose heart.” If the farmer tires of sowing and leaves half his field unsown, he will reap only half a crop. It is the same with good deeds. If we want a harvest, then we must finish the sowing and be patient, like the farmer who “waits for the precious fruit of the earth, being patient over it …” (James 5:7).

When will we reap? The harvest will occur in due time, at the appointed season, the proper season, the due season, the proper time in God’s time. The fruit is reaped in the season that follows the sowing, but it is ultimately the time of God’s appointment.

The good news? The law of sowing and reaping will never be repealed.

As Hitler was mounting his attack against England during World War II, Winston Churchill was asked to speak to a group of discouraged Londoners. He uttered an eight-word encouragement: “Never give up! Never, never, never give up!”

When it comes to someone who never gave up, the Apostle Paul is our hero. In Acts 20 he said, nothing moves me. I’m going to keep doing what I’m doing and get it all done and finish the work Jesus gave me. And nothing stopped him.

In 2 Corinthians 4, Paul says, “Therefore seeing we have this ministry as we have received mercy, we faint not.” Never get tired, he says. “We are troubled on every side, yet not distressed. We are perplexed, but not in despair. Persecuted but not forsaken. Cast down, but not destroyed.” Yes, Paul, is our hero when it comes to doing well in spite of fatigue.

There will be times when we will become discouraged in our Christian service, but we must never, never, never quit doing well.

Rules

In my youth, I aspired to be a baseball umpire. Trained by a former minor league umpire, I pursued that aspiration for many years in my free time, umpiring hundreds of games, up to the college level—although not willing to give up my day job for the joy of making decisions on balls and strikes, safe or out.

Like any sport, rules are the backbone of baseball. Without them, the game would quickly turn into chaos. The rules must be so thoroughly understood by an umpire that they are applied instinctively—often in a split second.

Each of us lives by rules. In his marvelous new book, Crafting a Rule of Life, my friend Steve Macchia says “All of us have an unwritten personal rule of life that we are following, some with great clarity, others less knowingly. We wake at certain times, get ready for our days in particular ways, use our free time for assorted purposes and practice rhythms of work, hobbies, worship, vacation, and so on.”

He continues, “Your personal rule of life is a holistic description of the Spirit-empowered rhythms and relationships that create, redeem, sustain and transform the life that God invites you to humbly fulfill for Christ’s glory. Rather than being a set of laws that forbid us to do certain things, a rule of life is a set of guidelines that support or enable us to do the things we want and need to do.”

Just as individuals need a personal rule of life, so Christ-centered nonprofits need a biblical rule of organizational life. As a trellis offers support for a plant, guiding its growth in a certain direction, organizations need to adopt a rule to articulate their intentions (via their rhythms and relationships) and identify the way they want to function best to fulfill their mission.

The word “rule” derives from a Latin word, regula. In the ancient sense of the term, regula or rule meant “guidepost” or “railing,” something to hang onto in the dark, that leads in a given direction, points out the road, or gives us support as we climb.

Christ-centered organizations need a guidepost or railing to ensure consistent practices which glorify God. When financial or other pressures come like a flood, an organization needs to stay the course following its biblical rule of life.

Throughout its history, ECFA has provided key elements of a biblical rule of organizational life. It does this through its high standards in the areas of governance, financial management, and stewardship/fundraising.

While the word “rule” often has negative connotations, following ECFA’s “rule” enables an accredited organization to focus on what it needs to do. It allows it to function with intention and purpose in the present moment. Compliance with the law is a fundamental expectation of Christ-centered organizations. Many of ECFA’s standards go far beyond the law. In turn, many ECFA members have created their biblical rule of organizational life based on these standards, but they have taken their rule to an even higher level.

Could a Christ-centered nonprofit organization follow its own rule that is similar to ECFA standards without being accredited by ECFA? Yes, this is possible. But how does a nonprofit convince anyone it is following these standards if only a few insiders are privy to whether and how the organization complies with its own rule. It calls to mind the old fable about the dangers of the fox guarding the henhouse.

The strong benefit provided by ECFA is its third-party accreditation. The accredited organization is the first party. Givers and others entering into transactions with the accredited organization might be termed the second party. And ECFA is a third party not involved in the interactions of the accredited organization.

It is the third-party oversight of compliance with high standards which sets ECFA apart. When a question is raised concerning whether an accredited organization is in compliance with the standards, an objective decision can be provided by ECFA.

ECFA’s seal, signifying the standards and third-party oversight, sends a strong message to givers, enhancing their trust.

ECFA does not give an accredited nonprofit organization integrity. Organizations have their own integrity based on following their biblical rule of organizational life. ECFA’s biblical rule of organizational life lends its significant credibility to organizations that already have established integrity. The trust of givers is enhanced, providing more resources to carry out the Great Commission. Craft a biblical rule of life, follow the ECFA standards of integrity, and rejoice as your ministry flourishes under the guiding hand of God.

Integrity Slipping

What are the greatest household risks? Some are what you would expect: 460,000 people a year are injured by kitchen knives; manual and power saws account for about 100,000 injuries a year. Some risks are surprising. Got any draperies? Every year, 20 people in America are strangled to death by drapery cords. Some 4,000 of us seriously injure ourselves on pillows.

What is one of our greatest dangers for injury? An issue that tops the charts is the potential for a spiritual 911-type injury is when our integrity slips.

Politicians spin promises, telemarketers scam the elderly, job seekers enhance resumes, repair shops pad bills, and students steal essays over the Internet.

People do these things even though they know the scriptures say: “The Lord abhors dishonest scales, but accurate weights are his delight” (Proverbs 11:1).

But, you say, “Those examples do not often relate to Christ-centered organizations. What are some examples that apply to us?”

Having an integrity slip can happen in many ways. Here are two examples.

Integrity can begin to wane when we focus too much on comparing our organization with another.

John Ortberg tells the story of a conversation with two other pastors. One man said to the other, “So, how is your church going?” The pastor responded, “Excellent, we have about 1,000 at our church. How’s your church going?”

The first pastor said, “Well, the Lord’s blessing us all right. We run around 1,500 or so.”

John says, “Then they looked at me. I knew what was coming next. I was working at a church that had 250 attendees at the time. And then a little voice, so quiet I was hardly even aware of it, began to whisper a management impression strategy to me: Say the church has about 300 people. 250 people is really small.”

“Right at the same time, another inner voice responded: What are you doing? You don’t even know these men. Are you willing to trade your integrity, which, when you come right down to it, is all you really have, for the sake of the status you would gain by 50 people?”

Ortberg continues, “So I said we run about 2,000. Not just transfers from other churches, either. Seriously impressive converts—Hugh Hefner, Jimmy Hoffa, the Dalai Lama.”

A related integrity loss chart topper can involve competing. Many of us are driven to compete. Professor Jonah Berger, the James G. Campbell assistant professor of marketing at the Wharton School of Business, suggests that people who are slightly behind in a competition are more likely to win than those who are slightly ahead. He found that NBA teams that were down by one point at halftime were more likely to win than teams that were ahead by one point at halftime. It’s all about competing. No sports arena sells a giant foam hand holding up two fingers.

As an author for more than 20 years, I am curious, but not obsessed, about how books written by other authors are selling. As Ortberg says, “My hunch is that Jeremiah never checked out Israel Today to see if he had passed up Isaiah on the nonfiction bestseller list. William Shakespeare didn’t look to see how many copies of his plays Christopher Marlowe sold.”

Our attitude should be the same as that of Christ Jesus: “Who, being in very nature God, did not consider equality with God something to be grasped, but made himself nothing, taking the very nature of a servant” (Philippians 2:6-7). The entire life of Jesus isn’t the story of somebody climbing up a ladder; it’s a picture of someone coming down—a series of demotions. The problem with spending our lives climbing up the ladder is that we will go right past Jesus, for He’s coming down.

People who are servants—humbly, honestly, and joyfully—keep getting revealed as the biggest winners. People who recognize and embrace their smallness keep getting bigger and bigger in God’s eyes.  It’s the oddest scoring system.

So, step up and sign your own non-compare, non-compete agreement. Paul said it best: “Pay careful attention to your own work, for then you will get the satisfaction of a job well done, and you won’t need to compare yourself to anyone else. For we are each responsible for our own conduct” (Galatians 6:4-5).

2011 Remembered—2012 Anticipated

2011 was a memorable year for the Christ-centered community but 2012 portends to be a chart-topper in many respects.

     Let’s take a trip down the 2011 memory lane:

•   Grassley hands nonprofit tax policy issues to ECFA.  In January 2011 Senator Charles Grassley closed his investigation of six ministries and referred the open issues to ECFA for study. ECFA’s board accepted Grassley’s challenge, approving a new national Commission.

•   ECFA’s astounding membership growth.  2011 was ECFA’s fourth consecutive year of record accreditation of new members. Christ-centered nonprofits increasingly understand the ECFA seal enhances trust with givers. 

•   Resources.  2011 was the third year for nonprofits to secure resources in a recessionary environment. ECFA’s 2nd Annual State of Giving Report reflected ECFA’s members fared much better than the largest secular charities.

•   Religious hiring.  The U.S. Supreme Court opted not to hear a case that had potentially significant implications for religious organizations’ hiring practices, clearing the way for World Vision to continue hiring Christians.

•   Housing allowance.  After dropping one constitutional challenge, the same group filed a new case seeking a declaration that the clergy housing allowance violates the First Amendment.

    The Department of Justice also appealed a ruling which allowed a minister to exclude multiple houses under the housing exclusion rules.

What to expect from ECFA in 2012 as we serve our members and those who give to our members:

•  Issuance of a Phase I report from the Commission on Accountability and Policy for Religious Organizations

•  Expansion of ECFA’s web-based member profile, giving each member control over a section of their profile to communicate issues of donor interest

•  Launching of an ECFA church membership initiative, including a focused approach for the need of churches—a separate newsletter, Focus on Church Accountability, church-focused webinars, and more

•  Continuing the popular CEO Dialogues under the ECFA brand

•  Releasing the first in the Governance Toolbox Series—training for boards

•  Increasing the impact of the popular ServantMatch™ concept—expanding the giving opportunities well beyond the current 2,100 giving options

•  Republishing When Giver’s Designate Gifts (formerly Donors-Restricted Gifts Simplified) and Igniting a Life of Generosity from ECFAPress in hardcover format with a softcover version for ministry imprint

What does 2012 hold for the Christ-centered community? To coin a phrase from my pastor, I am only a “prophet of the obvious”—and this is what I believe is becoming obvious.

•   Impact of the economy. In nonprofit budgetary planning, caution will continue to be the watchword.  Some Christ-centered nonprofits will flourish while others will be challenged to match income with outgo. There will likely be an increasing pressure on smaller nonprofits to maintain or increase resources.

•  Tax legislation. While conventional wisdom dictates that new tax legislation impacting nonprofits will be delayed until the Presidential and Congressional elections of 2012 are history, tax legislation could be passed on a rather impromptu basis as Congress desperately searches for new and increased sources of Federal revenue.

    Continuing challenges to the charitable deduction are virtually certain to come in 2012. A charitable deduction floor is the most likely of the options to become law.

    If the Charitable IRA provisions are extended for 2012, it likely will not occur until late in the year—again making charitable gift planning very difficult with respect to gifts from IRA’s.

•   Increased collaboration and, yes, some mergers—especially at the small to medium size charity level. A great example is the agreement of CrossGlobal Link (formerly IFMA) and The Mission Exchange (formerly EFMA) to merge, forming a body representative of 35,000 evangelical missionaries.

•  The courts. The decision of the U.S. Supreme Court on healthcare reform will have a significant impact on the future of healthcare for nonprofits and staff.

•   Donors. Individual donors will likely continue to contribute over 80% of all donations to nonprofits. Donors will increasingly look for assurance (peace of mind) that charities are legitimate charities and will make good use gifts.  They will strongly value the accreditation of charities, looking for appropriate transparency. This is where ECFA shines.

     Overall, 2012 will be a time to focus on the open doors God provides—and walk through them. It will be a time to discern God’s plans—a time to say:  “You speak, I am listening.”

Serve Boldly

A few weeks ago, I flew into Lambert Field in St. Louis. The young man driving the bus for my favorite rental car company (to protect the guilty, they will remain nameless) seemed to be less than energetic. My first indication of this was when he didn’t offer to help me onto the bus with my luggage.

Then, after picking me up, we stopped at another terminal. Patiently waiting was a mother and her eight-year-old daughter. The girl was in a wheelchair. Without leaving his seat, the driver asked if he should send another vehicle that had a chair lift. The mother said No, she could lift her daughter into the van. I hesitated, thinking the young man would get up—but there was no movement. With no thought of doing anything heroic, I quickly helped the mother get her daughter, the wheelchair, and their luggage on the bus. On the way to the rental car office, I visited with the mother and daughter and learned of the girl’s multiple back surgeries and their trip to St. Louis to again visit their surgeon.

I concluded that the young man driving the bus that day probably had been awol for the training session on boldly serving customers. The experience on that hot day in St. Louis served as a reminder to me of the importance of serving boldly—going far beyond the job description—going the second mile.

In this recessionary environment, it is a vitally important time to focus on serving boldly. Whether we serve with a for-profit or nonprofit organization, those of us who serve Christ should set the example for others.

Now is our time to serve boldly following the invitation and command of Jesus who set the ultimate example of serving boldly. Many Scripture passages describe Jesus as God’s Servant. He came as a servant to accomplish God’s will in the redemption of humanity.

To serve boldly, we must develop the servant attitude of Christ which calls for humility and obedience. In His instructions to His disciples about His servanthood, Jesus described His own role of service: “And whoever desires to be first among you, let him be your slave—just as the Son of Man did not come to be served, but to serve, and to give His life a ransom for many” (Matt. 20:27-28).

The servant of a human master works for his master. God, however, works through His servants. When we come to God as His servant, He first wants us to allow Him to transform us into the instrument of His good pleasure. Then He can take our life and put it where He wills and work through it to accomplish His purposes.1 Only then are we in a position to serve boldly.

Elijah served boldly. He challenged the prophets of Baal to a public test to prove once and for all whose God was the true God (1 Kings 17:1). He took a big risk as he was outnumbered 850 to one. Elijah proposed that the prophets of Baal prepare a sacrifice and ask their god to send fire to consume it. He would do the same and appeal to the God of Israel for fire. God answered with fire consuming the sacrifice (and even the stone altar) as Elijah had proposed. God did His mighty work, but He acted through His obedient servant, Elijah, who served boldly.

Peter and John were ordinary men who served boldly. After Jesus’ resurrection, God healed a crippled beggar through Peter. Peter and John were called before the Sanhedrin to give an account of their actions. Filled with the Holy Spirit, Peter spoke boldly to the religious leaders, and “when they saw the boldness of Peter and John, and perceived that they were uneducated and untrained men, they marveled. And they realized that they had been with Jesus” (Acts 4:13).

Do you want to serve God boldly in the large or small issues of your church or nonprofit? Then find out what the Master is doing and submit yourself fully to Him that He might use you to further that work with boldness. Jesus said: “If anyone serves Me, let him follow Me; and where I am, there My servant will be also. If anyone serves Me, him My Father will honor” (John 12:26). Serve boldly!

 1 Experiencing God, Henry T. Blackaby and Claude V. King, Broadman and Holman Publishers, 1994, pp. 25-27.

Blurring

Whether you are watching TV, a movie, or looking at a photograph in the newspaper or a magazine, it is difficult to tell if the images are real or not. Video games are nearly as realistic as film. There is a blurring of the lines between virtual and real.

The blurring of lines can be a challenge when it comes to truth telling—sometimes we call it shading the truth—changing it enough to suit our desires.

People are desperate to know the unvarnished truth. Whether in advertising, politics, or the news, people are skeptical about what they see, hear and read—there is so much blurring.

Recently a witness in a murder trial was accused of “falling on the sword” for her accused daughter—a thinly disguised phrase suggesting the witness lied. A politician made a false statement in an interview and his or her staff later “walked back” the comments—more blurring.

Is it the real deal or are we looking at graphically-enhanced pictures, hearing slanted news, or reading bloviated stories? Who can we believe?

The ninth commandment is part of a broad biblical condemnation of sins through speech (and a correspondingly vigorous promotion of speaking the truth). While false and deceptive witness was clearly and repeatedly condemned, several famous stories indicate the rule was not always strictly observed, even by the heroes of the faith. For example, Jacob was frequently engaged in deceptive witness, Isaac bore false witness about his own wife Rebekah, and Samuel deceived some of Saul’s people when he went to anoint David as Saul’s successor.¹

Despite this inconsistent performance by biblical characters, the teaching of Scripture is constant. The book of Proverbs is especially full of counsel about our speech. Two of the “six things that the Lord hates” and that are an abomination to him are “a lying tongue” and “a lying witness who testifies falsely” (Prov. 6:16-19).

The other side of this broad condemnation of false witness is the equally extensive praise of truthful witness. Proverbs commends wise, noble and true words: “A word fitly spoken is like apples of gold in a setting of silver” (Prov. 25:11).

Truthfulness is an underlying principle of ECFA’s standards—everything done in the name of our Lord should reflect truthfulness.

One of the key elements in good relationships between a church or charity and their givers is truth telling. Once trust is gone, a relationship is difficult to restore. Failure to tell the truth can be done so subtly that it goes unnoticed. We begin by blurring the truth about “small things” that “don’t matter.” Then a pattern develops. Soon valuable credibility is lost.²

ECFA especially focuses on truth-telling as it relates to how our members secure charitable gifts. The relationship between a giver and an organization is one built on trust. That trust is developed and maintained through truthful, honest, reliable, and trustworthy communications.

The concept is so vital that two decades ago ECFA established separate standards to especially ensure that a member’s relationships with those who financially support a member are maintained at a high threshold. Under these standards, ECFA members commit to represent facts truthfully when communicating with those who are considering whether to provide a charitable gift.

When communicating a giving opportunity, it is important to consider how it will be understood by a giver. After reading or hearing the appeal, the giver’s perception of the giving opportunity should be as close to the actual facts as possible. The accurate representation of words, pictures, graphs, and other information is vital.

And thinking like Jesus doesn’t only apply to raising resources—it applies to everything we do; it’s all covered when we think His way.

Telling the truth is a fundamental concept as we strive to be a reflection of God. May it always be our witness!

¹ Doing Right, David W. Gill, Intervarsity Press, 2004, page 283-4
² Based on Honesty, Morality & Conscience, Jerry White, Navpress, 1996, page 51

Much Ado About Little

Reporting on the recent revocation of tax status of 275,000 nonprofit organizations, the New York Times reported the action shrinks the nation’s nonprofit sector by roughly 17 percent, to about 1.3 million charities, trade associations, membership groups and labor unions. The IRS took action against charities that failed to file required paperwork for three consecutive years.

While it shrunk the number of nonprofits on the IRS’ list by 17 percent, it certainly did not reduce the number of nonprofits by 17 percent since most of the 275,000 organizations were apparently non-existent for many years. The IRS indicated about one-quarter of the 275,000 received tax exemptions before 1980 and many simply stopped operating without telling the IRS.

Until a change in federal law in 2006, only organizations with annual revenue of $25,000 or more — roughly one-third of the 1.6 million nonprofit groups — were required to file.

That law, the Pension Protection Act, required all organizations to file returns, but because it was embedded in 393 pages of a law that otherwise dealt with pension issues, many nonprofit groups did not know that.

This process is another example of legislation which, while well-intended, provided little benefit while creating an enormous amount of work—both for those in the government sector at taxpayer expense—and for charities, requiring perhaps millions of dollars of charitable contributions to fund the expenses of impacted charities.

Click here to read more.

Giving to ECFA Members Exceeds National Trends

While the dominant headlines during the recession have focused on the decrease in giving to nonprofits, this is not the entire story.

We have just completed an analysis of giving to ECFA members. It revealed that for ECFA members renewing membership in the last six months there has been a net gain in giving of 2% from 2009 to 2010. Pre-recession giving compared to three years later was $6.18 billion in 2007 and $6.32 billion in 2010, or an increase of 3.3%.

It is very significant that this segment of the giving world was resilient and maintained itself during a difficult economic time. This suggests a strong commitment of givers to the Christian faith and the generosity of God’s people.

The recessionary impact on giving was more significantly felt by smaller charities. Organizations with annual revenue above $10 million reflected an increase in giving for the 2007-10 period of 3.1%. While the organizations under $10 million annual revenue saw a decrease of 3.2%.

Of the 552 member’s data studied, 43% reflected an increase in giving between 2009 and 2010, 44% showed a decrease and the data for 13% was about the same (plus or minus 2%).

Click here to read more.

The Challenges of Charitable Solicitation Registration

There are few topics as confusing as state charitable solicitation registration. Nearly everyone who is in a charity leadership position is familiar with the concept but few clearly understand the implications of the laws in the various states as it relates to their charity.

One of the reasons this issue is so confusing is that it is a state, not a federal issue. With so much variation between the charitable solicitation laws in the 50 states, it is no wonder this matter leaves charity leaders puzzled.

Charities that seek contributions nationally must typically register in 39 states and the District of Columbia before starting to solicit. Since many states are increasing their enforcement efforts to ensure that charities and fundraisers are complying with initial and annual registration requirements, it's important that charities and fundraisers abide by these statutes—especially since noncompliance can result in the imposition of significant fines and penalties.

We have some excellent resources on the ECFA website to help you wade through the details of charitable solicitation registration including a state-by-state summary prepared by our friend and attorney, Chip Watkins.

To better understand these issues, join us for a special Charitable Solicitations Issues Webinar on June 22 at 1 pm EST. The two presenters, Karl Emerson and Dick Travis, are among the most knowledgeable individuals on this topic in the U.S. Karl is an attorney with Montgomery, McCracken and is the former director of the Bureau of Charitable Organizations of Pennsylvania. Dick Travis consults with many nonprofits on charitable solicitation issues and is the president of The Travis Group.

Click here to register.

A Time for Discernment

Decisions by leaders and boards of Christ-centered organizations are made constantly. For leaders, decisions are made nearly every day. Boards make decisions every time they meet.

Many of these decisions are seemingly small or routine—sometimes made offhandedly and without much thought. Other decisions are of organization-altering magnitude. Especially with these more significant issues, spiritual discernment is fundamentally important.

As leaders and boards, we are confronted with new perspectives, emerging trends, and economic and regulatory developments. It is a daunting task to make biblical decisions against a mosaic of options!

We focus on the Bible, prayer, faith, and wise counsel—all important elements in biblical decision making—but too often we do not consider spiritual discernment in the process.

In I Kings 3:5-9 (ESV) we learn that while Solomon was at Gibeon to offer sacrifices to the Lord, God appeared to him and said simply “Ask what I shall give you.” We are commonly taught that Solomon asked the Lord for wisdom but he requested more than wisdom; he asked for discernment. He became both wise and discerning. This teaches us that God honors discernment and those who seek after it.¹

Discernment is evidence of God at work and is deeply rooted in both the Old and New Testaments. The early church used the language of discernment. Paul and Barnabas were sent to Antioch with a letter that said,

"For it seemed good to the Holy Spirit and to us to lay upon you no greater burden than these essentials” (Acts 15:28-29 NASB).

This is the language of discernment.²

Romans 12:2 (ESV) directly refers to discernment, “Be transformed by the renewing of your mind, that by testing you may discern what is the will of God, what is good and acceptable and perfect.”

We do not get to listen to God’s voice thundering on the top of Mount Horeb. Instead, we must rely on the more subtle dynamics of the Holy Spirit witnessing with the human spirit about things that are true.

Discernment presents unique challenges in contemporary Western culture, because it requires us to move beyond our reliance on cognition and intellectual hard work to a place of deep listening and response to the Spirit of God within us and among us.³

Discernment involves thinking in a specifically Christian way about each issue. At the same time, our hearts have to be engaged in devotion to Christ. Then, and only then, will we find ourselves in tune with the mind of God and be able to make good judgments and appraisals, because to the believer is promised the presence of the Holy Spirit.⁴

Discerning God’s will is a spiritual dynamic beyond human wisdom. Always a key principle for leaders of Christ-centered churches and non­profits, with national and world events occurring at a frenetic pace and the second coming of Christ closer than it has ever been, the importance of spiritual discernment is vital.

We hear countless voices in a given day—some belong to co-workers, the media, or friends. Other voices exist within us (memories, emotions, or desires), and these can be the hardest to filter. For the believer, hearing the Lord is most important, so discernment becomes critical in distinguishing His voice from the others.⁵

As leaders and board members, we are expected to pursue discernment; the Bible repeatedly cries out for this.

¹ The Discipline of Spiritual Discernment, Tim Challies, Crossway, 2007
² “Discerning God’s Will Together: A Spiritual Practice for the Church,” by Danny E. Morris and Charles M. Olsen
³ Strengthening the Soul of Your Leadership, Ruth Haley Barton, InterVarsity Press, 2008
⁴ The Lost Art of Discernment, R. C. Sproul
⁵ “Developing Spiritual Discernment,” article by Charles F. Stanley

Trust the Processes

The last 24 to 30 months have brought mind-numbing financial challenges for a few churches and ministries. For others, the days have been challenging to say the least.

For years, it seemed so easy. Revenue increased nearly every year; expenses were allowed to proportionately increase. Everyone received a salary increase each year; there were few lay-offs. The number of people served by our programs went up. Reserves often increased.

But then, revenues began to decline. There was no certainty on how far they would go down. Budgeting principles, as we knew them, were out the window.

Organizations cut expenses but many found themselves behind the curve. Some looked for a “new normal.” While “normals” feel permanent, they never are—they just don’t stick around very long. It has been a process.

It is a sobering thought but a vital one. The things I know best about Him are things I learn through the process of day-to-day ministry and life.

You wake up in the middle of the night—you hear a voice that quietly but firmly points out that there is One who can gather up the circumstances of our ministry and use them to His purposes and to our good.

It is partially, at least from this perspective of bad times and good times, that I so strongly see and believe this fact: one can come to know that God is infinitely willing and abundantly able to bring good out of the processes of our ministries.

In Dorothee Soelle’s book, Death by Bread Alone, she suggests “the language of religion is experience.” She writes about a deep experience she went through: “It began to dawn on me that people who believe limp somewhat, as Jacob limped after wrestling with God on the shore of the Jabbok. The experience of the sufficiency of grace for our life, and the experience that nothing—not even our own death—can separate us from the love of God, are experiences we can recognize only after the fact. Such experiences are not written down and incorporated in drawings and plans which we can examine and check during the course of construction.”

The processes of life are when we come to know Him as we should. We start out with a “profession of faith.” It is not that what we are saying is not true—His promises are definitely real. But we do not own these beliefs yet because we have not bought them with the experiences of our journey. In the last couple of years, many Christian leaders paid the price of buying their beliefs while working through the processes of ministry.

When I was younger, I was a frequent attender of Christian retreats. Bob Benson, an executive with Benson Publishing, was my favorite retreat leader. In one retreat prayer time, he asked us to envision a blank sheet of paper with a horizontal line across the middle. Then, giving us time for reflection, he asked us to remember the good things that happened over the last couple of years—to think about them and rejoice over them. He asked us to put those things above the line.

Then, to help us get a truer perspective of how God works in our lives, he asked us to recall the negative things that had come to us as well—the dark, deep, troublesome times that threatened to engulf our souls. He asked us to list those below the line.

Bob asked us to commit the whole paper to Him—He is the God of the list on the top and God of the list on the bottom.

That day as I made my list, there were some things, for the life of me, I didn’t know where to put them. Some of the things were so evil it would seem their place would be a foregone conclusion. The day they happened, I knew, all right. The bottom of the bottom wasn’t low enough. I did not know whether I would make it or not. But looking back, I could see how God used for good what seemed so bad at the time.

That retreat with Bob Benson was years ago and he has gone on to the treasure laid up in a life-time of devotion, discipleship, and dedication. Still today, even the worst things that have happened to me in the last few years, I find them creeping up, over the line—illustrating that even out of the direst circumstances His call to us can be heard.

Listen to all your ministry has to say to you. He calls you from the processes.

Based on Bob Benson’s book He Speaks Softly, Word, 1985.

The Long View

We live in a 24-hour news cycle, results-now world. In contrast, our God takes the long view.


Seeking immediate results is rarely more common than when our ministries are impacted by an economic recession. All of our measurement tools are in place to report short-term measurable “success.” We impatiently scan our ministry reports for positive data indicators.


Are concerns about short-term data important? Yes, par­ticularly if questions of sustainability of the organization are in play.


Yet sound guidance of a ministry is more like running a marathon than a sprint. It is focused on the Great Commission with an appropriate desire to attain short-term effectiveness.


Matthew 14:15 records the recommendation of the disciples to Jesus as they told Him, “This is a remote place, and it’s already getting late. Send the crowds away so they can go to the villages and buy food for themselves.” In his recent book, The Longview: Lasting Strategies for Rising Leaders, Roger Parrott, president of Bellhaven College, suggests “the committee’s decision seemed like a reasonable solution.”¹


But Jesus took a long view perspective in mentoring these disciples, knowing the solution had sweeping ramifications beyond where to get dinner. Bolstered by the miracle on the hillside, Peter found the faith to step out of the boat and walk on water. That evening had long view implications.


God often builds his church using the long view principle. William Carey, the first missionary to India, worked for seven years before he had his first convert. Robert Morrison, the first Protestant missionary to China, labored for a quarter century and had fewer than a dozen converts.²


When taking the long view, the following principles are fundamental.

• Remembering. We are often so focused on the current challenges that we do not take time to remember. How has God helped us in the past? Has he ever failed us? What lessons did He teach us in past challenging times?

• Reflecting. Identify the season your organization is in by reflecting on your environment. Bill Hybels refers to the seasons of growth as consolidation, transition, malaise and reinvention. He traces the seasons idea back to Ecclesiastes 3:1, which says that “there is a time for everything, and a season for every activity under the heavens.”³ Simply naming the season we are in is the basis of determining the implications of the season.

• Vision-casting. “God’s vision for your ministry will not change quickly, nor will it be something you will accomplish rapidly. His vision will require years of active pursuit. The vision itself may even outlive you!

“Thus, the heart of the vision will remain unchanged over a prolonged period. Some of the details lying at the outer edge of your understanding of the vision may shift somewhat over the course of time. But the core of the vision—the people you have been called to reach, the task you have been called to do, the purpose for which you exist—will remain constant.


“Because He is not a God of confusion but of order, because He is a God who is in control, because He takes great pleasure in seeing us find success in our service, He will be faithful in His support of the vision.”⁴


Reflecting on these principles, have you made short-term decisions in the last 12 months impacting the budget, programming, personnel, and much more? You probably have and this was important to do in the short-run. But even the short-term decisions can and should be made with the long view foremost in mind.


¹ The Longview: Lasting Strategies for Rising Leaders, Roger Parrott, David C. Cook, 2009.
² Ibid.
³ Axiom, Bill Hybels, Zondervan, 2008.
⁴ The Power of Vision, George Barna, Regal, 2009.

Keeping Up with the Health Care Reform Changes

For all plan years beginning on or after September 23, 2010, employers are required to dole out an array of reform notices to all plan participants. Here are six notices that should be provided to employees:

• Dependent coverage notice. All health plans are required to offer a one-time enrollment opportunity to participants’ children who are under age 26. In addition, participants must have 30 days to enroll their dependents. Participants must be notified of the changes no later than the first day of the plan year beginning on or after September 23, 2010.
• Lifetime limits notice. Under the new law, plans are prohibited from putting lifetime limits on the dollar amount of coverage plan participants receive. Participants who had previously reached the limits of their healthcare coverage must be given a special enrollment notice that lets them know they are once again eligible for coverage.
• Primary care designation and OB/GYN notice. Employers must communicate to employees that they have the right to designate a primary care physician within the plan’s network to coordinate their medical care. Additionally, female employees need to be informed they can obtain OB/GYN care without prior authorization.
• Grandfathered status notice. All participants must be notified as to whether or not their health plan will retain its grandfathered status. If the plan does keep its grandfathered status, participants must be told that the plan is exempt from certain reform law provisions.
• Cancellation of coverage notice. Participants’ healthcare coverage cannot be cancelled or terminated retroactively except in cases of deliberate fraud or similar situations. However, if a plan does cancel a participant’s coverage, the individual must still be given at least 30 days advance notice of the cancellation.
• Claims appeals notice. A notice must be given to all participants who have a claim denied, explaining their right to appeal the denial. It must also outline the plan’s procedures for internal appeals and external reviews of those decisions.

For model language to satisfy these six notice requirements, see http://bit.ly/model384. Health plan providers may also furnish you with the proper notices.

What You Need to Know About Medical Expenses and 2011

The impact of health care reform begins to pick up speed after 2010. While churches received a reprieve on one health care-related issue, other changes are right on schedule even if little information is available to carry out some of the provisions.

The reporting reprieve. Churches were scheduled to report the value of employer-provided health coverage on Form W-2’s for 2011 to be filed in 2012. However, the IRS has now given churches (and other employers) a one-year reprieve (Notice 2010-69). Reporting the value of the health coverage for 2011 is now optional. The IRS has determined that this relief is necessary to provide churches (and employers) the time needed to make changes to payroll systems or procedures in preparation for compliance with the new reporting requirement. So, the information will now be required on Form W-2s for 2012 filed in 2013.

In addition, the IRS announced that it has issued a draft Form W-2 for 2011. When churches report the value of coverage under a church-sponsored group health plan (optional for 2011 Form W-2s/required for 2012), the data must be reflected in Box 12 with a code of DD.

Remember: The cost of church-provided health insurance is not taxable. The new reporting requirement is intended to be informational only and to provide employees with greater transparency into overall health care costs.

A 2011 change that is right on schedule. Over-the-counter drugs and medicines are not eligible for tax-free reimbursement under an employer-sponsored health plan beginning January 1, 2011 (insulin is not a medicine or drug for purposes of this rule).

A few large churches have cafeteria plans and many other churches have health care flexible spending accounts (FSAs). This new limitation imposed by the Patient Protection and Affordable Care Act impacts reimbursements under these plans (OTC drugs and medicines were never deductible as medical expenses on Schedule A.)

It is very important to determine whether a particular OTC item is a medicine or drug because the new rules do not apply to OTC medical supplies and equipment (such as contact lens solutions, bandages, crutches or durable medical equipment or diagnostic devices such as blood sugar test kits.)

The new OTC rules apply to medicines or drugs (other than insulin) incurred on or after January 1, 2011, without regard to the plan year of the plan. Thus, a plan with a fiscal plan year must begin complying with the rules mid-plan year. And, expenses for OTC drugs and medicines incurred during the two-and-a-half-month grace period following the end of a 2010 calendar plan year must be accompanied by a prescription.

What to do. Churches should make the following preparations:

• Form W-2’s for 2012 to be filed in 2013. Even though reporting the value of coverage under a church-sponsored group health plan, it might be a good plan to report the data on Form W-2s for 2012 to get ready for the reporting required for Form W-2s for 2013.
• Establish a flexible spending account. Your church doesn’t have to even be close to megachurch size to have a FSA. The smallest church in the U.S. can set up an FSA at virtually no cost to the church and allow church staff to have amounts reduced from salary and used to reimburse medical expenses tax-free (free of federal income and social security taxes—and often free of state income taxes).
• Amend existing cafeteria and FSA plans. Existing plans must be amended to reflect the new OTC rules. Fortunately, plans may be retroactively amended effective January 1, 2011 so long as the amendment is adopted no later than June 30, 2011.

Health Care Reform Legislation Requires that W-2s Show Value of Health Coverage

Thanks to the health care reform legislation, employers are required to report the value of the health insurance coverage they provide on each employee’s annual Form W-2 beginning in tax year 2011.

This reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers, according to the IRS.

There has been considerable confusion generated concerning the reporting of the value of health insurance coverage—with rumors spread that the amount is taxable for income tax purposes. To be clear, the amount reported does not affect tax liability, as the value of the employer contribution to health coverage continues to be excludible from an employee's income and it is not taxable. For more information: http://www.irs.gov/newsroom/article/0,,id=220809,00.html?portlet=6

It might appear that this additional reporting requirement does not impact nonprofits until January 2012 when the 2011 Form W-2s must be filed. However, departing workers can ask for a W-2 within 30 days of the final paycheck or the date the request is made, whichever is later. Even though few people do this, charities will need to be ready in early 2011. The calculation of the health plan’s value is the same as the value used to figure the allowable premium for COBRA coverage.

Preparedness to comply with these new government regulations is the key.

The Hidden Costs to Charities Just Keep Rising

A recent study commissioned by the National Business Travel Association says that travelers pay up to $101 in sales, hotel, rental car and other extra taxes aimed at them on an average three-day domestic trip.

Since many nonprofits have significant travel budgets, taxes that target travelers are understandably concerning.

The study found that a typical business traveler pays $101.27 in taxes on average for hotel, rental car and meals during a three-day, two-night stay in Chicago—more than in any other city. And travelers pay more than $85 in similar taxes during the same length of stay in Seattle, Minneapolis, New York and Boston.

As states and local municipalities continue to struggle to balance budgets, taxes on travelers will undoubtedly continue to rise—impacting nonprofit and other travelers.