by Josh Bryant
Medical doctors likely have the most complicated and complex jobs on the planet. There are over 13,000 known diseases that can be treated with 6,000 different medications and 4,000 different medical procedures. Despite this complexity, minor surgeries that used to carry a 10% or greater chance of death are now common and relatively safe. Out of more than 50 million operations every year, only 0.3% end in fatality. Of those, 75,000 deaths are preventable. Despite decades of specialist training through college, medical school, residency and fellowships, mistakes are still made.
How does that relate to the church? About 65% of Americans claim to be Christians. Of those, only about half indicate that they are active in church and fewer cite Jesus as a necessity for salvation. For the sake of argument though, we'll say half of 65% (or one third of all Americans) are redeemed. That means there are 200 million people in the U.S. that do not know Jesus as their Savior. In 2017, more than 2.8 million people died in the United States. Do you see where this is going? Two thirds of 2.8 million people accounts for 1.88 million people who died in the US in 2017 that did not know Christ. Over 5,000 per day die without Jesus; since you've been reading five to ten people in the US have died not trusting Jesus for their salvation.
What if as in surgery half of these deaths without Christ were preventable by the church? Almost a million preventable deaths without salvation compared to 75,000 preventable deaths due to surgery. Compare the complexity of how the church works to how surgery works. The story of the gospel is far simpler than open heart surgery. How many souls could be saved if Christians worked as hard to eliminate preventable deaths?
In his book "The Checklist Manifesto", Atul Gawande attributes the decline in preventable surgery deaths to a simple and ancient tool - the checklist. What all does your church do? Routinely there is the task of sermon preparation, worship service planning, staff meetings, Sunday School lessons, custodial work, sound checks, announcements, mission trip planning, outreach, guest assimilation, child care, volunteer recruiting and management, offering collection, counting and deposit, accounts payable, payroll, facility maintenance, bus ministry, food pantry, pastoral counseling, and the list could go on.
How have these things gone wrong for you in the past? Did you forget to tie your sermon into the gospel and share it in such a way that calls the lost to salvation? Did you forget the words to the songs you were leading? Was there a typo in the lesson material you distributed? Did someone fail to take the trash out of the nursery that contained week-old dirty diapers? Did the sound system squeal during the service? Have events not been promoted well? Were mission trips poorly staffed? Did no one invite someone to church? Did a first time guest not get a follow up call? All of us can probably think back on times in ministry in which things like this have gone wrong.
You know the next question - how many checklists does your church have? Most churches I encounter do not have any. The focus has been on policy. Policy is easy. "We report child abuse." That's a good policy. "We clean the entire church weekly." That's another good policy. But relying on policies like this is like a pilot relying on the policy "we start the airplane." Turning on an airplane engine is far more complicated than pushing one button. There is a process - a checklist.
When the checklist is not followed by a surgeon, people die. When the checklist is not followed by the pilot, planes crash and people die. There are times when churches act in a variety of ways that it generates liability. Reporting child abuse is necessary, but if people in the church do that on behalf of the church in different ways without a checklist or process the variables in that process can cause problems. Steps get missed, evidence is tainted, certain calls are not made, and the church finds itself in trouble.
What if the church had checklists? Could we prevent unnecessary deaths without Christ? Could we be a church that is winsome; to which people want to come? Could we be a church that takes steps to mitigate risk and avoid legal harm? This is the power and necessity of process in the church over policy. Learn more about how process can protect the church here!
by Josh Bryant
In a previous article, I described 5 questions that church leaders need to ask in terms of making a decision that would result in the church being called ethical. In reality, no one church leader makes all the decisions that result in an organization's actions. The Senior Pastor, staff, key lay leaders, other leaders, and volunteers all act in a manner that reflects on the church itself. These actions are the actions of the church as much or more than they are the actions of one person. How then do we restrain the conduct of the organization? In short, a strategic ethics program.
Many would say that the church of all places needs an ethics program the least. Churches don't need policies and procedures because no volunteer would intentionally harm the church or have the authority to do anything that would. Churches don't need to worry about violating obscure laws because churches are "small fish" compared to big corporations. Churches don't need codes of conduct for volunteers because we all follow Christ and will do the right thing.
These statements simply could not be further from the truth. More and more lay counseling programs are popping up that are poorly supervised and trained. Volunteers are operating chainsaws, heavy equipment, and automobiles full of children. Churches aren't so small any more. Mega churches and multisite churches are growing in number, and many times in size. As churches grow, budgets grow. Volunteers will always do the right thing? Tell that to the churches and charities that will lose $5 billion this year alone to fraud and theft. We must lead our churches to be very intentional in structuring the church's conduct. Here are four levels of ethics to strive for, each building on the one before it.
Level 1 Church - Compliance Driven Ethics
At this level, your church's method of ethical behavior is driven by a need to protect the organization. You have policies and procedures in place designed to meet the government's requirements of the church. You have rules and disciplinary procedures for staff members to enforce compliance with your code of conduct. The focus of your ethics program is all about "following the rules."
In some regards, most churches find themselves in this area of the spectrum or below. Far too many churches do not have any policies and procedures. Too many church leaders are completely unaware that their church is violating several laws that could result in serious harm to the church. This state of blissful ignorance has been tolerated and ignored for a long time, but we are starting to see that tolerance end. Churches have control over staff by threats of being fired, but they do not have the same "control" over their volunteers. Most have such a volunteer shortage that they will not fire a volunteer at any cost. In order to fully meet the requirements of even a compliance driven ethics programs, these are areas that the church must address.
Level 2 Church - Risk Driven Ethics
At this level, your church has developed a more sophisticated system for measuring risks and mitigating them. You have resources assigned to tackle them. You have begun to create an ethical culture at the church among staff and volunteers, but your efforts are still very inward focused. The church is more concerned with the effect of the conduct of its employees and volunteers on the church than the effect of that conduct on the outside world. In other words, you're still acting to protect the church.
Very few churches exist at this level. Even those with well developed policy manuals usually do not have a great system of measuring what risk is out there and how to ethically mitigate that risk. Very few churches have an employee with the responsibility of doing so. Very few churches are employing quality risk assumptions and liability waivers that one would expect at this level. Most churches are comfortable either ignoring the issue or simply ensuring staff comply with the rules.
Level 3 Church - Reputation Driven Ethics
At first glance the name of this level sounds prideful and self-centered, but it isn't. We want the church to look good to the outside world. We want what Jesus offers to be attractive without the church making it less attractive.
At this level, the church is paying attention to the ramifications of its decisions on the world around it - those directly impacted by its actions. Instead of a tyrant enforcing policy on staff, the church pays attention to what would make their lives better. The church focuses on how it can make its members and guests lives better. When the church is concerned about its reputation - not pridefully but for the cause of Christ - its relationships with employees, volunteers, members, and guests grow stronger. Employees and volunteers are more productive. More members volunteer.
I can hear you already - "we are focused on a lot of these things." There are many churches who do very well meeting ethical obligations at this level. But statistics show that most church staff are still severely under paid. We are concerned with providing a great worship experience and spiritual growth for our members and guests, but people are coming less frequently. These are our goals, there is just no ethics program attached to them. There is nothing that governs the church's conduct to make sure this happens. There are no policies and procedures governing parking lot greeters or the process by which a guest speaker is vetted and approved. Furthermore, all of this is built on a foundation that is crumbling at best. Each level builds on the previous one, so if we do not fix those problems, we could very easily find the comfy chair of our laurels that we are resting in get kicked out from underneath us by a litigious, hostile world.
Level 4 Church - Culture Driven Ethics
At this level, your church is adding value to its community and to other churches. Your church is considering future generations and people who have not yet been born who will worship at your church decades from now. Some believe that to reach this level your church must be concerned with its environment through recycling programs, clean energy usage, carbon footprints and more. None of these concerns are bad or unbiblical, even if you do not believe in global warming (I offer no opinion on the subject). Your community not only benefits from your church, it trusts your church. As a result, your church's conduct optimally achieves its mission.
Here you have policies and procedures for the entire church. Every operation is performed within the same parameters every time. As such, the community begins to rely on and trust those operations. The chances of variable conduct derailing the train and causing a legal disaster are minimized. You have a code of ethics that is part of your DNA. You talk about it, teach it, publish it, and live it. Your church's conduct is intentionally designed to bring value to the Kingdom of God, to do everything it is obliged to do, to take care and shepherd those God has entrusted to it, to fulfill the Great Commission, and to be a trusted and valuable member of society. This is the kind of church ethics program we should strive for.
by Josh Bryant
People talk an awful lot about business ethics. Not as many talk about church ethics. It's a bit silly to argue that businesses are moral actors but churches are not. So why aren't we talking more about church ethics? Here are 5 ethical questions church leaders should be asking about every decision.
1. What would God want?
Call me Captain Obvious. In business ethics, one of the questions in ethical decision making is "what brings the most value to the owner of the business?" This is the classical theory of business ethics. Jesus is the head of the body, the church. We who are in it have been bought with a price. He owns it all! So naturally, we must make decisions based upon what would bring the most benefit to him.
Not so fast. It's easy to say that, but we don't have to look too hard to see churches neglecting this necessary question. Would God want us sweeping sexual assault claims under the rug? Would He want us quietly dismissing pastors who abuse children without saying more? Would He want us to be unwelcoming to someone who has a different color skin or dresses differently than us? Of course not. If churches are going to make ethical decisions, we need to follow the advice of Oscar Hammerstein and "start at the very beginning, a very good place to start."
2. What agreements are relevant to this decision?
Another theory of business ethics is the contract theory. In essence, ethical decisions are those which keep all of our agreements; unethical decisions violate an agreement. On its face this seems ridiculous for the church, but let's dig a little deeper. Have we made agreements with God? Is the church not in covenant with Him? Have we not pledged fidelity to Christ such that as Cyprian said, "The spouse of Christ cannot be adulterous; she is uncorrupted and pure" and He fidelity to us when he said "I will be with you always"?
Have we made agreements with each other? In a global context we cannot choose fellow believers any more than we get to choose our brothers and sisters. However, we do make agreements in the local context. Each local church is built upon a set of collective agreed upon beliefs and practices. I've heard a story of when new members wanted to change the fundamental character of a local church, to which the pastor replied, "we did not join you, you joined us."
We must ask what we have decided together to believe. What is it that we practice fundamentally? What decision best benefits the body of Christ in this local context? What agreements have we made with our neighbors, vendors, suppliers, service providers, communities, and others? What decision affects those agreements most beneficially? These are the questions this theory uses to ascertain right and wrong, and it is not completely inapplicable to the church.
3. Who is affected by this decision?
This question addresses the stakeholder theory of organizational ethics. In any decision that the church makes, there will be groups of stakeholders that are affected. Who are the stakeholders? Every individual person in the church is an individual stakeholder. You can organize them in many different ways. We tend to organize people by gender, age, and ministry (i.e. women's ministry, young adult's class, choir, etc.).
We cannot just stop with our church though. There are stakeholder groups in the community - the lost, those who depend on the church's food pantry, those who own or use property surrounding our church, and state and local governments. In some situations, local law enforcement may be a stakeholder (i.e. church security). In other situations, a youth group that you haven't even heard of yet may be stakeholders who call and ask for a place to serve on a short term missions trip. Your association and network of churches are stakeholders. As church leaders run down this list of stakeholders, they must determine how a decision affects these stakeholders.
4. What advances the gospel?
This is another question that seems so obvious it is hardly worth mentioning, but it is probably one of the most important. The agency theory of organizational ethics determines a course of action as ethical based on whether it helps or hinders the purpose of the organization. The decision that advances the gospel, promotes worship and fellowship, and secures spiritual growth and service opportunities for guests and members is the most ethical decision to make.
It is easy for churches to be short-sighted when answering this question. Some would argue that an incident of abuse must be kept quiet because for that to become public would hinder the gospel. I counter that when the allegation comes out (as it invariably will), the fact that the church swept it under a rug will harm the church far more than had they dealt with it at the time.
5. What makes our church a good citizen?
This one tends to be a bit more controversial. When people start discussing questions of good citizenship things can sometimes devolve into a political discussion. Some will say that the church has a moral obligation under the citizen theory to be environmentally friendly while others would argue the opposite. But this question is a bit more complicated than that.
Is your church part of an organization or network of churches? If so, how would this decision affect that network? Does your church impact your community? If so, how would this decision have a positive impact? How would this decision affect our standing with our community, state, and national leaders? Does it submit to their authority or is it rebellious? Do our policies obey the law? These are all questions that must be considered when making an ethical decision.
A question I routinely get is, "what if the answers to these questions point to different conclusions?" My response will typically be, "Are you sure they do?" Most of the time, these questions will all point in the same direction. However, if the decision is to obey an order of the government to stop preaching on Sunday mornings, obviously it appears that the citizen theory conflicts with the agency and classical theories at least. One way to overcome the problem is to ask, "would we really be a good citizen by ceasing to preach the gospel?" My answer would be a resounding "no." Another way to overcome it is as James and Peter did - let the government decide whether it is right obey it over God, but we cannot help but preach Jesus. Lastly, we need to understand that even in the easiest of analyses that we are guided by the Holy Spirit. A set of five questions cannot put Him in a formulaic box. He is God. We must be guided by His Spirit to make good decisions.
by Josh Bryant
Nehemiah had a big task in front of him. Jerusalem was in ruins, its walls battered. "You see the bad situation we are in, that Jerusalem is desolate and its gates burned by fire. Come, let us rebuild the wall of Jerusalem so that we will no longer be a reproach," he said to the Jewish leaders in Nehemiah 2:17. Likewise, it should be clear to church leaders that we have a big task in front of us. The Church in many regards is in ruins. We are in a bad situation. We have become a reproach to many. They say churches do not care about protecting women and children from sexual predators. They say we do not respond appropriately and are more apt to sweep an allegation under the rug. "They" are right; there is no denying that churches and church leaders have done so. We can and must do better; it is time to rebuild our walls.
While they are right that the actions of some churches and the inaction of others have been tragic and reprehensible, I do not think this is the character of the church. The church is the Bride of Christ which He is sanctifying to present blameless before God. That is to say not only must we rebuild our walls, it is a certainty that we will do so. The only question is how.
Many have added their voices to the conversation. Some have called for apologies; others have called for reparations of sorts. I do not claim to have a solution to past problems. What I can add is simply that these events are rather conclusive evidence of the fact that churches as organizations are ethical actors and agents. While this may seem like a foregone conclusion, we cannot afford to assume as much. Only when we start there - at a place where the church and the Church as organizations have moral responsibilities - can we begin to set aside personal differences of opinion for the good of the church and the Church.
We have an ethical responsibility to respond appropriately to sexual abuse claims in the church. We owe it to God who grieves at every sin committed against His children as anyone reading this would grieve at such sins against their children. We owe it to each other to love one another enough to protect one another. We owe it to the victims and the vulnerable who are far more likely to struggle with their continued walk with Christ as a result of an assault. We owe it to our community: to our neighbors and friends, and to law enforcement and the justice system. We owe it to our mission. Too many seem to believe that sweeping conduct under the rug protects the church. That's myopic. When the accusation becomes public (and it will become public) it will do more harm to the church than had we dealt with it immediately.
Jerusalem's walls were made of rock. Nehemiah did not patch their gaping holes with spackle. He had to tear them down and build them back up again. We must do the same. We must tear down our old paradigms and systems and build new ones that are more secure. This week on the Law and Church podcast, our guest is Gregory Love from Ministry Safe. We all need to go listen. Pay attention to his description of the list - a piece of paper with a checklist on it that serves as our defense against child sexual abuse in the church. At the foundation of that list is a background check, despite statistics that of all abusers in the church in recent history only four percent would have failed a background check and statistics that offenders will offend an average of 150 times before they are caught. Our paper list is mere spackle. We need to get some hewn stone.
Ministry Safe is one such stone. Their training materials and processes are key in putting systems in place that protect children from sexual predators. We'll never know this side of heaven how many children have been protected because of their work. The Church Law Group (Church General Counsel) hopes to be another such stone. Our desire is to train church leaders in how to appropriately respond to claims of sexual abuse in the church in a way that protects the victim and the church. We help investigate claims. We help document prevention practices online so that everyone who needs to know how the church works together to prevent abuse has access to it. We make ourselves available on a day's notice to answer church leaders' questions about what to do in a wide variety of circumstances.
After Nehemiah told the people what God had done to bring him to Jerusalem, their response was "Let us arise and build" and Nehemiah records actions that followed their words, "So they put their hands to the good work." (Nehemiah 2:18). It wasn't just a work - it was a good work. Ours is a good work as well. Let's get to it!
by Josh Bryant
We are excited to announce $1W (short for One Dollar Webinar). This is going to be a short, 15-minute webinar on a wide variety of topics that church leaders need to know about. Our first webinar will be on vetting volunteers. We'll have quick points that are easy for you to copy down, and you'll have the ability to ask questions. You are guaranteed to get an answer from an attorney that specializes in the law as applied to churches if you are a registered attendee. We'll have a follow up Facebook Live at the Church Esquire Club immediately following the webinar.
Don't miss this awesome opportunity. Sign up below!
by Josh Bryant
Church General Counsel is super excited to announce the launch of Law and Church, a podcast for church leaders from church lawyers. We will interview some of the top church leaders from across the country on issues churches are facing that have legal implications. We'll work through cases of churches that are in court right now so that we can learn from them together and work to avoid similar situations.
The podcast will be hosted by Josh Bryant and Bryan Fittin. Our first guest is Dr. Thom Rainer, President of Church Answers and former CEO of LifeWay Christian Resources. We will also interview Jim Sheppard, Principle and CEO of Generis. Generis is a stewardship consulting firm that helps churches across the country. We also have interviews scheduled with student pastors, security experts, child abuse experts, senior pastors, and more.
We look forward to helping pastors, ministers, and church leaders with this podcast. Learn more at www.LawAndChurch.com.
Here at Church General Counsel, we're starting a focus over the next several weeks about dealing with sexual harassment in the church as the #MeToo movement spreads like wildfire through our society refusing to pass over the church. How the church works to prevent sexual harassment in the workplace is crucial, and we'll have resources and further discussion on this topic over the next few weeks. But the second aspect of a good sexual harassment strategy is how to deal with it if a claim is made.
Churches must respond to claims of sexual harassment with a thorough investigation. However, there are many great reasons why churches should not conduct them internally.
1. Churches are not naturally qualified to conduct an investigation appropriately. I don't know of any seminary that teaches a class on fact finding investigative techniques. I know plenty of law schools that do, however. Attorneys are trained in how to build a case, and before the case can be built on the law it must be built on the facts. As such, attorneys must know how to conduct good witness interviews, collect documents and other evidence, and otherwise conduct a solid investigation.
2. Internal investigations can lead to hurt feelings and further conflict. Someone is going to disagree with your conclusion if you do the investigation by yourself. This can cause church members to be upset with you, and you didn't do anything but due diligence in investigating a sexual harassment claim as you should. It can cause more strife on staff. However, if you have an outside attorney conduct the investigation, it brings a formality to the process that relieves you of personally carrying the weight of the decision without an independent recommendation.
3. The content of the investigation can gain extra protections. This is the great benefit of attorney-client confidentiality and privilege. Attorney-client confidentiality just means that an attorney must keep information gained from the attorney-client relationship strictly confidential in a vast majority of circumstances. As such, the things that church staff, members, and others say to the attorney are usually protected. Attorney-client privilege goes further to prohibit a court from requiring an attorney to disclose that information. This is a great protection that you won't get with any other investigator.
4. The results of the investigation can also gain extra protections. This means that whatever the attorney discovers could be protected from anyone else getting access to it. This is because a doctrine known as attorney work-product. It is an exception to the discovery rules - rules that provide for the provision of evidence from one party in litigation to the other in hopes of settling a case or allowing the other party to prepare for trial on equal ground. Except in rare situations, the work of an attorney cannot be "discovered" by an opposing party such that not only communications, but the result of an investigation are protected from disclosure.
At Church General Counsel, we highly recommend our clients utilize our services to conduct investigations in sexual harassment and other personnel matters. Here are some ways we can help:
Cory and Stephanie Epps have released their first Christmas EP called Love Has Come to Save. Church General Counsel managing attorney Josh Bryant was able to walk them through the process of obtaining copyrights on their work. Cory and Stephanie Epps are phenomenally talented, and they wrote one of those songs that tells the entire story of Christmas in a new and refreshing way. It starts before Christ left the bliss of heaven and goes all the way through His ultimate victory on the cross, interspersed with the praise that this loving gift deserves. Bryant has joked that the song is Dove Award worthy. After you listen, we think you'll see it isn't a joke - Cory and Stephanie Epps have written an amazing song about the Love that's come in Jesus' birth. Their arrangement of other Christmas classics don't disappoint either.
Churches do things like this all the time, and while no musician or pastor should get greedy with what they create, the pastoral process is inherently creative. Whether you are preparing a sermon, creating graphics, or writing a Dove-worthy Christmas song, you should take steps to protect the integrity of your intellectual property. Monetizing your intellectual property is not inherently greedy. It is a means by which God can provide for your family or church, perpetuate His work from a financial standpoint, and otherwise extend the reach and influence of your work. Managing Attorney Josh Bryant has experience in several aspects of intellectual property law, including copyright, trademark, and other areas that generally don't apply to churches. The intellectual property services he offers are all part of the monthly subscription service churches use to retain Josh Bryant or other attorneys through Church General Counsel. Pastors and musicians can get intellectual property and other assistance independent of their churches at www.josh-bryant.com.
Get Cory and Stephanie Epps' new album on iTunes here.
Get Love Has Come to Save on Google Play here.
Mergers and Acquisitions (M&A) are a niche in the law that have special rules, procedures, and requirements. There are lots of reasons why churches would engage in M&A activities - church revitalization, pastorless churches, homeless churches, the economy of scale that a larger church can provide to a smaller congregation in a multi-site model. But in this post, let's take a look at the legal requirements to make it happen, which if followed precisely and thoroughly with the advice of a qualified attorney can help ensure a successful merger or acquisition.
1. Preliminary Negotiations
These discussions center around theological and ministry philosophy alignment. You'll talk about the history, recent pastoral leadership, polity, church health, facilities, and other options of the church to be acquired or merged. You'll brainstorm obstacles to the merger or acquisition, such as theological differences that you've discovered, debt, property, or opinionated and quarrelsome members. You'll discuss generally how decisions will be made in the merged or acquired church, and talk through things like how deacons, members, small group leaders, and the like will be transferred. Even at this stage, you should have an attorney (or attorneys) involved, because from these discussions a legal-ish document needs to be drafted. Although not a legal requirement, prayer should be a part of or precede this process.
2. Letter of Intent
Attorneys will need to draft this non-binding letter or Memorandum of Understanding that outlines the discussions that took place in preliminary negotiations, assuming that the leaders involved agreed that the merger or acquisition should go forward in the process. It is also beneficial to sign confidentiality agreements at this point in the process, as the next phases of the M&A process will involve financial disclosures that should remain confidential. Such agreements help give both parties a sense of security that in the event that God forecloses the transaction, neither will disclose the other party's financial situation.
3. Legal Due Diligence
This is where attorneys and accountants get more heavily involved in the transaction. At minimum, it is important to have an accountant prepare three documents based on a review of the merged or acquired church's financial books: an income or profit and loss statement, a balance sheet, and a cash flow statement. Depending on the assets involved, a full blown audit may be more advisable. This should involve a review of the foundational documents of both churches to determine the proper procedure of obtaining approval from boards of directors, elders, committees, congregations, and others who must approve the merger. Contracts, deeds, leases, insurance policies, and other legal documents that the merged or acquired church is subject to should be gathered and reviewed by attorneys to determine the ongoing liability of the remaining church after the transaction is complete. This needs to be a very open, full disclosure of all legal and financial obligations and benefits of the church to be merged or acquired. From this process of due diligence, all other aspects of the transaction flow.
4. Final Negotiations
Leaders from both churches should then meet for final negotiations to hammer out the last details of the merger or acquisition based on all that was learned. An attorney must be involved in these negotiations to draft the final merger agreement, also known as a Plan of Merger. The topics to be covered in these final negotiations are covered in step 5 below.
5. Plan of Merger or Acquisition
The result of the legal due diligence and final negotiations is a Plan of Merger. This is a contract that will eventually be filed with the Secretary of State in the state in which the primary office of the remaining church will reside. It will specify each church's representations and warranties that were made in the legal due diligence process. It will specify what each church promises to do. It will set forth the next steps in terms of getting the approval of elders or congregations, depending on the polity of the churches involved. It will set a "closing date" by which time approval must have been obtained in order to move forward (see step 7 below). While this is a binding contract, it does not bind either party to merge, acquire, or be acquired. It only binds each church to proceed in getting approval for the transaction. If one of the churches cannot get that approval, the contract is void. Do not try to draft this on your own - please get an attorney to do it.
6. Church Approval
Once the Plan of Merger is signed by the pastors or leaders of each church, both churches will proceed to seek approval of the deal, depending on the polity of the church. Some churches will seek approval of the congregation by a vote. Some will require the approval of an elder board and the congregation. Some will require the approval of a denominational office at the state, regional, or national level. Some may even require approval of several committees and the church as a whole. This all depends on the articles of incorporation and/or bylaws of each church, as well as the rules in place in your state. Get the counsel of an attorney to determine what votes are required, as in most cases the final Articles of Merger or Acquisition will require specifics as to vote totals and approval processes before the merger or acquisition will stand.
7. Closing Date
Once both churches have obtained the necessary approval to close the deal by the date set in the Plan of Merger or Acquisition, the closing date will come. Although not a legal requirement, by now it is a good idea to have already had a joint service, fellowship, or other event to build relationships and celebrate God's activity in your churches. On this day, property is legally transferred from one church to the other or to the newly merged church. The final documents will be signed that effectuates the merger or acquisition. Once this date passes, all that remains is the official filing of the necessary paperwork to make the transaction a matter of public record.
8. Articles of Merger or Acquisition
The paperwork that must be filed is called Articles of Merger or Articles of Acquisition. This dissolves the appropriate legal entities, creates the appropriate new legal entities, and finalizes the transaction in the eyes of the state government which oversees the formation, merging, acquisition, and termination of legal business entities, including churches and non-profits. The Articles will include the plan your churches put together in step 5 and statements of voting procedures and outcomes obtained in step 6. Once filed, the process is complete and two distinct legal entities have become one.
At first glance, this seems like a burdensome process. In some cases, you'll blow through 2-3 of these steps in one meeting. In other cases where two larger churches merge, it may take more time. However, these are steps necessary to ensure that both sides are fully informed of what they are getting into administratively and financially. It provides a clear process for both churches to obtain the approvals and buy in necessary to ensure that the merger or acquisition is successful. It provides time for prayer and consideration of the Spirit's guidance. With the assistance of an attorney, it provides the certainty that the transaction meets all of the law's requirements, and that God's church comes out of the deal stable and secure.
If Church General Counsel can be of any assistance as your church goes through this process, please contact us!
My Momma always told me never talk about religion or politics - at least someone's momma told me that. Here we are about to talk about both in one post. The political activity of churches has been in the news a lot this year since President Trump has allegedly repealed the Johnson Amendment that prohibited 501(c)(3) tax exempt organizations from politicking from the pulpit. Did you know that isn't exactly true? The President doesn't have the authority to change congressional legislation. By executive order, he changed the way it is to be interpreted by the IRS. As has been proven time and time again over the last several administrations, with the stroke of a pen that interpretation can again be changed. Here are some reasons to have your Church General Counsel review your political activity policy.
- A written policy on employee political activity is wise.
First of all, a written policy on employee political activity is wise. Do you want your staff or your church to support a particular party or candidate from the pulpit? Does such conduct align with the vision and mission of your church? Is it ok for your staff members to run for office? Can church funds be used for political purposes? What about church resources - could they be used on behalf of a political candidate? Is it ok for church staff to use church time to lobby or campaign? These are all questions which your personnel committee, elders, and/or senior pastors need to answer and put in writing so that everyone is aligned with the direction of church leadership.
Secondly, it is important that you have a political activity policy that is flexible and can be changed quickly. Right now, the Executive Order on the Johnson Amendment prohibits the IRS from finding a church guilty of violating the Johnson Amendment if it could not also find a secular institution guilty. How that would play out if litigated is far from certain since churches have a much bigger pulpit (pun intended) than most 501(c)(3) organizations. Nevertheless, this is just an executive order that cannot overturn congressional legislation. As quickly as it was signed by President Trump, it could be revoked by Congress, the courts (if challenged), or a subsequent president. As such, you need the ability to quickly update, disseminate, and educate others on a policy that aligns with the law as it changes. Managing Attorney Josh Bryant stands ready to help your church comply with this law.
Third, churches need to be fully informed of the repercussions of violating IRS regulations for 501(c)(3) tax exempt organizations. If prosecuted, a church could lose its tax exempt status. That means that every donation made to your church is no longer deductible by your donors. It could hurt your annual giving and ultimately shut the doors to your church. Now, we don't want to be alarmists, and to be fair this is something that has not been tested. However, the law clearly states that you could lose your tax exempt status if found guilty of violating this law. Churches are wise to render unto Caesar in this regard.
Finally, your church needs to understand that there is a difference between endorsement of a particular candidate or party and issue advocacy. You can preach on abortion or poverty until you are blue in the face as long as it doesn't appear that you are endorsing a particular candidate or political party. The government can even complicate this though, as the law up until know has allowed the government to infer violation based on a number of factors even when the content of the message appears on its face to be simply issue based and not directed toward any given party or candidate. Josh Bryant has worked with churches on this issue before, and he can help your church ensure compliance with this unusual law.
There are many different best practices that you could engage in to protect your church from this risk. While we don't want to stifle political speech, we do want to make sure your church is protected from undue government interference. Subscribe to Church General Counsel today for more information.
Church General Counsel Managing Attorney Josh Bryant, J.D., M.Div., authors most of the posts in this section. From time to time, he will post articles from others in the field of church growth, administration, and operations.