The phone rings.  I answer.  The Board Chairman of “XYZ” Ministry introduces himself and says, “We have a long term staff member who is retiring in three months.  They just approached our Senior Pastor and shared that they were physically and emotionally prepared for retirement but that they had very little in the way of financial resources.  I’ve worked for the church for 30 years and we never had a retirement plan.  How are you going to help me to fund my retirement?”


He then said, “We don’t know what to do?  Can you help us?”

A liability?

Does the church or any other ministry organization have a liability in this situation?  If there is one, it does not show on the balance sheet and can’t be found in the Articles of Incorporation.  Yet, does the liability exist?  I’d suggest it is as real as the mortgage.

If the Chairman asks the congregation what they should do, the answer will be clear.
“We have a responsibility to………………….”  You can fill in the blank.

This situation is one that rears its uncomfortable head on a regular basis.  The Board Chairman continued, “We know we should have put in a retirement plan years ago, but we just didn’t.  The pastor never pushed for it and there were always budget reasons why not to do it.  I guess we just hoped that God would provide and then proceeded not to think about it or even start to address the issue.”

Addressing the issue

Our research shows that about 40% of all faith based 501c3 organizations do not have any formal way they are addressing this issue of “a moral liability that exists and is growing but not reflected on the balance sheet.”  The issue is clear and growing more prevalent every day with churches, but they are not the only ones.

It sneaks up on you

The moral liability sneaks up on some very silently and over a long time.  A significant mission organization came to us a few years ago and asked us to help them determine the long term financial health of the field missionaries.  The field missionary staff was aging and there was some concern among the headquarters leadership that resources at some point might get tight.  You see they had a defined benefit plan in place that paid out $13 per month for every year of service.  In case you have not done the math, $13 per month times 30 years of service amounts to a whopping $390 per month.

shutterstock_220991629.jpgIt took some time and lots of spreadsheet work but we calculated the amount that was needed to provide a long term missionary family with a $39,000 per year annual income, including social security, would require about 66% of their operating budget.  Big moral liability and the end of the ministry.  You see they had “assured” the staff that they would be “taken care of” in retirement.

That “being taken care of” seems to be the tacit assurance projected by many ministries to their staff when the issue is not addressed directly.

Not every decision is a good one

Another organization had a meeting 20 years before with key staff and explored the need for a retirement plan.  The leadership agreed that each would take care of their own and signed a document evidencing that decision.  Now it’s 20 years later and two of the five key staff members have approached the board.  “We know we said we would take care of our own retirement, but with everything that has happened in the course of daily ministry, we never did it.  Now we have nothing and are coming to you so determine how you are going to help us.”

The off balance sheet moral liability rears its head again.

One more example: There was a new ministry start up lead by a dynamic young pastor and his wife.  God blessed their ministry and it was growing quickly.  He was wise enough to approach his Board and suggest that they set up a retirement plan for himself and his wife.  He was quite specific about the need and even the process.  He was especially concerned about his wife if anything happened to him.

The Board in its wisdom determined that because of his young age and the growing need for resources, they would not set up a plan, now.  They did say, and they put it in the organization minutes that if anything happened to him, they would provide for his wife for her lifetime.  Yes, you are right, about 18 months later he died.  The board has paid out in excess of $500,000 over the ensuing years to care for his wife.  She is now in her late 70’s and going strong.  What was the opportunity cost for not taking wise stewardship action almost 40 years ago?

The off balance sheet moral liability that exists within churches and parachurch organizations is huge.

Not only is the potential cost in dollars for miniistry huge but also the cost in diminished ministry.  Good organizational stewardship takes many different paths.  Paying attention to the long term financial needs of your staff is certainly one of them.

shutterstock_399966472.jpgOne more twist to this conundrum.  Think of this, if 1/3 of your staff upon retirement were financially able to continue in ministry with you at no cost to the organization, how would the ministry change?  How would His kingdom be impacted?  And how much better would your “moral balance sheet” look?

We are convinced that ministry is for a lifetime and it must be funded in every season of life.  By your parents when you were young, by your profession, your work, thereafter and until you hit that last season we call the 4th Quarter.  Then ministry needs to be funded by the savings and good stewardship that took place during the prior years.  Putting a Future Funded Ministry plan in place need not be either expensive or administratively taxing. It is important!

Think about your balance sheet.  Think about the people.  Think about your stewardship responsibility organizationally as well as personally.  This is important.  Don’t put it off.


-Bruce Bruinsma