Cash flow to an organization is like blood pumping in a person’s veins. Without it, we will not get the oxygen moving to fuel our body’s systems. The same goes for our organization. Cash flow provides the fuel to sustain our organization’s mission. Because of fear of misappropriating money, and the perceptions of pastors only wanting the money of others, coupled with our lack of education on how to lead the financial strategy of the church, many pastors shirk their dual responsibility as the CEO of the organization, not just Lead Pastor. It’s your responsibility as the CEO of your organization to not just lead spiritually, but to lead organizationally. To understand how to create what Les McKewon calls predictable success.
McKewon talks a lot about the life cycle of organizations and how to build them into a place of “predictable success.” This is not an easy task, but it is important as the CEO of your faith community to take responsibility for its financial health. Your job as an organization leader is to move the organization out of “early struggle” as quickly as possible. To do this you need a strategy.
For more education on the life cycle of an organization click here. One of the most important aspects of climbing out of “Early Struggle” for a church is the
Generosity System.
Often, pastors recoil at the thought that they are running a business, they often shout that churches aren’t businesses and that they have different problems. This is true. A church is not just a business. McKewon says, “You can’t cope with your uniqueness until you deal with the parts of your organization that is the same.”
In the next few moments, we are going to learn the building blocks of a solid Generosity System. I believe for every church to move quickly out of Early Struggle there are four phases in building a stellar generosity system for digital churches.
Set Up Your Ability to Receive Funds
1. File as a non-profit corporation.
This is imperative if you want to be financially solvent as an organization. However, there are many ways to complete this step. If you have denominational backing, follow their process and you likely will receive help filing with them. For those without a denominational covering, we highly recommend
StartChurch. StartChurch helps church planters like you with all the legal sides of organizing a church with the government.
2. Get a Church Bank Account.
Once you file, you will get an Employer Identification Number. With this number, you can open a bank account, and begin to open digital payment accounts.
3. Set Up Online Giving
Next, find a source for online giving. The best initial option is to partner with a sending church that will process your giving dollars for you, but if you don’t have that option there are plenty of great giving platforms out there. One of the best platforms for digital giving is iDonate. Find the right solution for your community, and get it set up as quickly as possible so that you can get fundraising dollars quickly.
Fund Your Salary
When it comes to sustaining church planting for the long term, I have found that it is imperative to build in phases and for the long term. That is why, when I coach church planters, I teach them to fundraise their own salary first. You can’t help people until you make sure your own “oxygen mask” is on.
1. Determine Your Yearly Salary
Although most might consider this self-explanatory, over the years I have noticed a need for travel expenses for donor development as part of the missionary budget. I add this on top of what I know I need to live. As a planter, I found that it was imperative that I minimized consumer debt to be a good steward. This may be where you are at now, and I would suggest working hard to rectify your financial picture before jumping into church planting. Debt makes a difficult endeavor needlessly more difficult.
2. Determine the number of Partners you need
Once you have your annual salary plus travel calculated, we need to do a little math to determine the number of partners you will need. We start by finding our monthly salary needs:
Annual Salary/12= X(rounded up to the next hundred)
Let’s say you needed $100,000. We would divide that by 12 which would equal $8333.34, but we would need to round to the next hundred. $8400 would be the monthly target we are trying to raise.
In my experience, The average gift is around $100 per month with an attrition rate in partners of 15-20% per year. Life happens and we need to be smart and take that into consideration as we build our support network. This means if we want to create a network that will consistently get us to $8400 per month, we need to look for 101 partners.
The math I did to come up with this is as follows:
1.2(8400/100)= 100.8 (round up to the next number)
101 Partners
This won’t ensure that will make my goal, but it will put me in the best statistical position to consistently make my $8400/mo. goal.
3. Determine the number of Partnership Meetings you must initiate
Next, we need to determine how many partnership meetings we will need to conduct for us to reach our goal. As I have fundraised multiple projects over a span of fifteen years, and have gotten better at the art of asking, I have found that I have been able to “close” 1 out of 2 meetings into a partnership.
I didn’t start out that way. Actually, I was horrible and timid. I began with a “close rate” of 1 out of 5. I actually believe you can do better. If you are a natural at asking for money, determine yours at 1 out of 3, if you are better than that, you need to be teaching the rest of us.
If you are worried, then you need to look at a “1 out of 4” close rate. I promise you, the more you ask, the better your close rate will get.
Now, take your Partner Number (our imaginary number is 101) and multiply it by the denominator of your close rate. So, your Meeting Equation will look like this:
Partner Number x Close Rate Denominator= Your Meeting Number
If you needed $8400/mo. and you have a close rate of 1/3 you will have a Meeting Number of 303.
4. Determine the number of Prospecting Calls you must make
Finally, we need to conduct our Prospecting Equation. We are gonna say we aren’t bad at closes but we are nervous (personally, I always calculate my close rate at 1/4). so we need 404 Meetings.
To get our Prospect Number, I have found 2 out of 3 people you ask for a meeting say yes. Over the years, I have found that a personal, clear ask is powerful enough for people to listen. Especially, when you use the power of referrals to build your list. But to get to the 2 out of 3 number we know that 1 out of 3 will say no. So, we build that tolerance into our Prospecting Number.
That means the Prospect Equation will look like this:
Meeting Number x 1.33= Prospect Number (rounded to the next one)
Let’s use our imaginary number:
404 x 1.33= 538 Prospects
There you have it. We need to call 538 prospects to mathematically make $100,000 a statistical probability– even if we are subpar at the ask.
With this formula, we can be confident if we do the work even when we are getting a lot of “NOs.” And trust me, you will get more “nos” than “yeses” at the beginning. Don’t give up. The Numbers, and more importantly God (if he is calling you to this), are on your side.
5. Create Your Fundraising List.
This is simple. If you want $100,000 annually, you need 538 names and phone numbers to call. Period. So, list them. And don’t wait to start fundraising until you have the 538 names.
Studies show that friends of friends are actually more likely to be better for networking and fundraising. That is why you need to lean on the power of the referral. Ask
every person you speak with to connect you to three people they think would love your mission via text or email. This is the secret sauce to finding your 538 names.
Here is an interesting note, as you build your email list as you learned in the Engagement Engine session, you will always be expanding your network to help fund your vision in the future.
6. Create Your Tools.
You need three things for you to win:
A Phone Script
Your Phone Script needs to be friendly, clear, and concise. Here was mine from the last time I fundraised:
Hello______, this Chestly Lunday. _______ connected us because they thought you might resonate with what my wife and I are doing in ministry. We are looking to build a Mission support team for this ministry, I was wondering if you would be willing to sit down over a cup of coffee and allow me to share with you our vision for the ministry. If it resonates with you, I would love you to consider financially partnering with us, and if not, I would love to share with you so you can share with friends about what we are doing. Would you be willing to meet with me? (shut up until they answer, Chestly!) Awesome! I have three times available Thursday @ 9 am, 11 am, and next Monday at noon. Which would work for you? (shut up again) Great, do you mind if I get your email and send you a calendar invite for that day? (if they are squeamish, then let them off the hook, they are not a person of peace for me) Thanks, can’t wait!
A Mission Pitch
This is a clearly laid-out presentation script of what you will say to prospective partners once you are in front of them. Today, I rarely do coffee with these people. Zoom is very easy. Unless they are a huge donor, I do zoom. If they have very deep pockets I have been known to fly to meet with them. I would suggest you do the same.
When it comes to your Mission Pitch, it will align with your Pitch Deck… It is the words that you will say as they watch your Pitch Deck.
A Pitch Deck
A Pitch Deck is a Visual Slide show that outlines your reason for asking for funds. You need the following for a successful Deck:
The Cover Slide
As someone that is asking for missionary funding, I love to give them an amazing picture of my family. This meeting is about them loving you and the mission God is sending you on.
The Overview
The overview is like the elevator pitch– if you had ten seconds to say what you do, this short pithy sentence would display clarity of mission, swagger, and Passion. As Donald Miller says, “It needs to pass the Caveman grunt test.”
The Opportunity
This is your opportunity to share the missional opportunity where God is asking you to serve. Share the potential of your mission field. Visually communicate the trends in this field. Share with them your people of peace, and the digital places you can find them.
The Problem
Share why they need you and people like you on the mission field to serve them. Share what your people of peace need and what the church is not providing them.
The Solution
What is your strategy to reach these people? Share how reaching people the way you want to reach them will result in more Jesus followers.
The Traction
Share with your potential partners why the evidence points to you being a success when you serve them. Stories of previous success are great content here!
The Person of Peace
Go deep with them about your heart for the person God has placed on your heart to reach with the Gospel. Share with them your Person of Peace Profile, and the study you have around this person.
The Financial Goal
There should be a Goal for funds, and a breakdown of the use of funds. You don’t need to be overly detailed, but let them know the expenses you do incur on a monthly basis so they can see it laid out. They will know that your number is not unrealistic–unless, of course, you are asking for a G6. Actually, the opposite is true too. Most of us aren’t asking for a private jet. The truth is we often undersell our needs to people out of fear. The best givers know this, and actually, see it as a matter of stewardship, to be honest, and accurate with what you need. So if you need $100,000 because you live in an urban setting, DO NOT ask for $40,000.
The Ask
When you make the ask, make it clearly and boldly. Also, set it up as subscription-based giving with three options. I like $100, $150, and $200 as my go-to, but tune into your intuition on a person’s economic status and don’t be afraid to ask for more when you sense the leading to.
Make sure to have a link to your giving page in the deck. This is important as they need a quick way to get there while you are presenting. I like to send them the link via zoom in the conversation right away.
7. Keep your donors in the loop.
Make sure to Create a Template for a Newsletter. Below is a picture of the template exercise we did when I first was trained on how to create a fundraising newsletter.