A healthy church is a home for your church family, a public space, a safe space, an open space, a space for quiet, a space for loud rejoicing – in short, it is a beehive of activity. Add to that the rising costs of materials, more damaging storms, and other variables – it becomes very challenging to find cost-effective insurance coverage.
Managing all the different risks involved in church operations requires far more study and discussion than this brief newsletter post. (Check out the recording of the recent Conference webinar on this topic and other resources.)
Your Missouri United Methodist Foundation encourages you to consider how long-term investments of designated funds can complement your overall plan to insure and manage risk. Here are a few ideas to consider:
1. Start a general long-term reserve fund. The initial goal is to grow the fund to meet or exceed your various insurance deductibles.
- Higher deductibles tend to lower the premium payments. An adequate reserve could allow you to consider a higher deductible.
- Many churches will maintain long-term reserve funds in an account at the Foundation. In a typical year, these funds will not be needed, and the hope is that they will not be needed for several years running so that they can benefit from compounding investment growth.
2. Once your reserve meets or exceeds your deductible goal, you might start an annual draw on the fund to further off-set premium payments and/or to address maintenance needs before they become a problem.
3. Start a Building Endowment Fund. This can be a wonderful opportunity to attract legacy gifts from members and to grow long-term, sustaining support.
- The key idea of “endowment” is that the gifts are not spent – rather only the earnings that accumulate in the fund are used.
- Just like colleges and universities, churches with significant campus facilities must add new sources of revenue for long-term viability.
Call Your Foundation!
No matter the size of your church, there are ways to get started in creating long-term funds! The Foundation staff has the experience and expertise to help your church reach its reserve funding goals. Learn more about ways to assist your leaders in implementing effective stewardship practices, adopting appropriate administrative policies, and managing resources for long-term financial health by contacting Laura Murphy at lmurphy@mumf.org or visit the Foundation website at www.mumf.org.