Transparency

The internet has brought about greater financial transparency for not-for-profits. It is rare when an organization’s most recent financial statement and IRS 990 – the tax filing for not-for-profits – is not found on its website.

What about synagogues?

Recently, I had occasion to visit a synagogue website where a friend serves as rabbi. I read through the most recent quarterly newsletter. It was pretty striking to see a message from the synagogue’s finance chairperson that congregants could view the “3rd Quarter Report” through the synagogue’s ShulCloud membership portal.

Very Interesting. You have to be a congregant. But I know this is the just the second time I have ever seen a reference on a synagogue website to any kind of financial report.

How do most synagogue’s share financial information?

Most often in preparation for the congregational meeting, the board approved budget that needs to be ratified at the meeting is emailed to congregants, or sent by snail mail. It could be a 1 page budget summary, or it could be a very detailed budget with multiple pages, generated by QuickBooks or another similar program. Here is a really good example.

Do congregants have any interest in the synagogue’s financial information? Probably not too much. But then again, financial transparency has not been a general practice.

How do synagogue boards demonstrate that they are good stewards of the community’s money?

Congregants know of the various requests for funds – dues/annual commitments, High Holiday and annual appeal, Gala and other special events. But the sharing of budgetary information – how the synagogue is doing in terms of income and expense projections – hardly ever happens.

What about sharing the minutes from board meetings? Maybe the initial Google analytics would show that the open rate on board meeting minutes would be pretty low. But again, the issue is more about being both good fiduciaries and being transparent than about open rates.

So what am I proposing?

Synagogues should strive for transparency – for all aspects of synagogue life. Posting board minutes, once they have been approved and accepted, seems like a simple thing to do. Technology makes this easy in terms of implementation. Changing our behavior and making the effort to put it into practice may be a bit of a challenge. Or not.

What about financial information? For synagogues who do conduct an annual audit, post it on your website and share the link with all congregants.

How about ongoing financial information?

Sharing is caring. Not sharing such information might bring about some whispers that “they are hiding something”.  But I think there will usually be no whispers at all. Show projected monthly income and expenses for the year. Show the status to date. Encourage people to ask questions. You can do it like at my friend’s synagogue, on a quarterly basis, and for congregants only. Although practicing financial transparency is also a good message to prospective congregants as well.

How We Pay

I was speaking with my friend Carl today. He lives in Atlanta and attends a Methodist Church. He shared with me that this is a big weekend for Methodists. 864 Delegates will be gathering in St. Louis to consider several plans for the Church internationally related to gay marriage, gay clergy and the Church’s general views of the LGBTQ community.

Carl shared with me that at both the Methodist church he and his family attended in New York and the one in Atlanta they attend now, the clergy and leadership are open minded about these issues. But that is not the case throughout the many, many churches in more rural parts of the U.S. and throughout Europe. Right now, the current Methodist Church Book of Discipline – a pastor’s rulebook – doesn’t allow clergy to perform same sex marriages. Even though that is the law of the land in the U.S.

I shared with Carl that LGBTQ issues regarding the big stuff like clergy and marriage are not really a concern today – for non-Orthodox synagogues anyway. Although there is sometimes a similarly heightened conversation around issues of intermarriage.

This led to a further conversation about how churches and synagogues are concerned about membership and attracting millennials (Carl is in fact a millennial). And younger people tend to have a more progressive view of the world when it comes to such social issues.

At the end of our conversation, I asked Carl about how his church asks for financial contributions. “Do they still pass the plate?”, I asked. He said that his church encourages people to tithe at a rate of 10%. Sound familiar? But he said the church is cognizant of the fact that people have some big expenses – for housing, childcare, healthcare, and life’s general activities. He commented that what one contributes to the church is based on both an internal family conversation and a conversation with God.

Interesting.

Back to the question of how they contribute. He said that they do pass the plate on Sundays. People are also encouraged to make contributions using their smart phones by texting and through Venmo. Carl also said that congregants are encouraged to establish a recurring gift schedule using the church’s website so that contributions are made weekly or monthly.

I was about to ask him about a church stewardship campaign when we both had to end the conversation. Next time.

I once visited a small synagogue in New York City whose primary funding came from “passing the hat”. It is not a payment vehicle often associated with synagogue life. And not a method that allows for much financial planning.

Giving people options to make payments is key, and is really meeting people where they are at.

Someone is moved by the Rabbi’s Shabbat sermon – or even her sermon on Yom Kippur – why shouldn’t we ask congregants to Venmo the temple a contribution? Or send a contribution by text? Concerned about contributing on Shabbat? I went to a Bar Mitzvah at an Orthodox synagogue a couple of years ago. And everyone who was given an Aliyah was given an envelope and asked to press down a tab to make a contribution before they returned to their seat. Really. We shouldn’t always be asking. But we shouldn’t be afraid to ask when people are excited about being a part of their Sacred Community.

Nickel and Dimed-Really?

When our children were in elementary, middle and high school, it seemed that the PTA and the local Fund for Educational Excellence were always in fundraising mode. Bake sales, wrapping paper, silent and public auctions – every month there was another request for money. And fundraising for the various sports teams and special learning communities. You don’t want to know what we were paying in real estate taxes, which covered the Board of Education and other local services.

I am sure that we all agree with the importance of education for all children.

I know that there are some people who feel that the synagogue is always asking its stakeholders – congregants – for money as well. The Dues statement comes in June – or whenever the beginning of the synagogue’s fiscal year is – letting you know the amount owed. For most synagogues in the Northeast, that is around $3000. If you have children in religious school, add on about $800 per child.

September rolls around, and there is the High Holy Day Appeal. In November, the Pre-School has a Hanukkah Gift Fair.  Maybe the Religious School is selling wrapping paper. And there are two emails that you have receive in December asking to help close out the High Holy Day Appeal. Or just to include the synagogue in your end of year charitable giving. Maybe there is even a community event honoring a friend, or someone you really like and respect who has done a lot for the synagogue.  It is a fundraising event – not only are you being asked to attend by purchasing a ticket for $50 or $100, there are letters and emails about an ad journal (let’s kill a few more trees) that most people leave on the table at the end of the evening or discard when they get home. Maybe not the honoree and family.

And I know that many of you agree with me about the importance of Jewish community. 

Synagogues don’t have the benefit of receiving public funds to cover the basic costs, like for public education. Perhaps that is the analogy for the purpose of dues/annual commitments. It covers a major chunk of the operating costs, the rest is made up by religious school, pre-school, annual fundraising.

Years ago, a growing membership was a counter-balance to the increased annual costs of synagogue operations. That is not the case today for most synagogues – churches, too – so various fundraising efforts, such as direct appeals and events, have become as much a part of the fabric of synagogue finances as dues/annual commitments.

Perhaps the best way for synagogues to deal with people feeling “nickel and dimed” is to establish and grow a synagogue’s endowment fund. Universities and hospitals do it. Shouldn’t synagogues? And as individuals, we utilize a similar approach through our retirement investing. A $1 million endowment, invested appropriately, should generate $40-$50,000 for use in synagogue operations.

A comprehensive campaign to raise $1 million – or even more for mid-size and large congregations-is a good starting point. Having a bequest program will help grow the endowment over the course of the next 10-15 years. The growth in this stream of funding should allow leadership to focus more on community building activities, and not always be asking people for money.

And people will not feel so “nickel and dimed”.

Overtime-Redux

The change in minimum wage laws in New York for fast food restaurant workers impacts synagogues, too.

Two and a half years ago, I wrote about the change in Federal Labor Laws and how synagogues would be affected. Your synagogue hired Jordan right out of college to be the Youth Director for a salary of $36,000. According to the new Federal regulations, every time Jordan accompanied teens to a weekend Shabbaton, she would be entitled to overtime at time and a half for every hour she worked beyond 40 hours each week. The same would be true for the office manager whose job responsibilities required her on occasion to work 55 hours a week. If her salary was less than $47,476, she, too would be entitled to overtime pay for each hour worked beyond 40.

In November of 2016, a lawsuit was filed and a restraining order was issued that kept these regulations from being implemented.

On the state and local levels, things are changing with a similar result.

New York State Labor Laws that increase the minimum wage to $15 per hour will impact synagogue employees – and most businesses and their workers – in a similar fashion as what was intended by the 2016 Federal Department of Labor regulations. As of December 31, 2018, if Jordan was the Youth Director at a New York City synagogue with 11 or more employees, and was earning less than $58,500, she would be entitled to overtime pay of time and half for every hour worked beyond 40 in any given week.

The pay threshold for synagogues with less than 11 full time employees on 12/31/2018 is a little less, $57,330. It will increase to $58,500 on 12/31/2019.

For synagogues in New York’s Nassau, Suffolk and Westchester Counties, there is a graduated grace period. But the threshold for all employees will be $58,500 on 12/31/2021. For synagogues in all other New York counties, the minimum salary threshold is $43,264 on 12/31/18, increasing to $48,750 on 12/31/20. Last December, several cities in Silicon Valley (Sunnyvale, Mountain View) increased the minimum wage to $15.  San Francisco has also increased its minimum wage laws to $15 as well. Other states may be following suit in the future.

There are not a lot of options here. The nature of the work of a Youth Director is such that there are a lot of late nights and weekends required. If the New York wage law impacts your synagogue, and the employee in question is earning below the threshold, you can require the Youth Director – or the Office Manager in the other example – to just work a 40-hour week. You will also need to ask such staff to keep really good time sheets. The weekend of the Shabbaton might be the only time that week that the Youth Director is working.

At the end of the day, this approach is probably “pennywise and pound foolish”.

You should of course consult with legal counsel familiar with New York State labor law.

Not Again….

When our son was 4, he went to a school that was Pre-K to Grade 2. Mrs. Jones sat at a desk greeting all visitors who arrived. She was the kind of woman who put the fear of God into most people. When she told you that you had to sign in, you did it.

If Mrs. Jones had been at the desk in the entryway at the elementary school in Sandy Hook, or in the lobby at the Tree of Life Synagogue, she would have certainly been among those who perished.

I was in Italy this past week following the tragic news on social media. Seeing soldiers at train stations, along with what seemed like a significant police presence is something that I no longer give a lot of thought. Being in Israel a lot and of course a near daily commute through Penn Station in New York since 9/11 has caused this to be the norm.

The first mass shooting in a U.S. synagogue shakes us all at our core. Similar occurrences have happened at churches (Sutherland Springs, TX and Charleston, SC), a movie theater (Aurora, CO), and a nightclub (Orlando, FL), and of course schools – Columbine, CO, Sandy Hook, CT and Parkland, FL. And just last night at a Dance Club for young people in Thousand Oaks, CA.

Back to the synagogue – will we ever again feel safe? I want us to get there. It will be hard for many of us to walk in to Shabbat worship or drop off our kids at Religious School and not think about safety – at least for several weeks. And our synagogue has an armed guard who sits at the entryway. Is that enough? Do we want our synagogues to be like in many cities and Europe where armed soldiers are standing guard at the entrance? And don’t you think the leadership of churches and mosques have similar needs?

One of the articles I read last week mentioned that a Conservative synagogue in New Jersey was spending $450,000 – 1/3 of its annual budget – annually on security. There was also an article in The Forward about an Orthodox synagogue in Baltimore – with a Day School – spending more than $300,000!! An outcome of last week will no doubt be increased security expenses for many synagogues, and other Jewish institutions throughout North America.

And now there are even synagogue leaders encouraging congregants who have a permit to carry a concealed weapon to do so when they come to worship.

Will such mass shooting ever stop? I am all for the Second Amendment, but until there are responsible gun laws, our fears about guns will always be on our minds.  Do people really need to have an AR-15? Or does one person really need to have multiple AR-15s and hand guns, like many of the alleged shooters throughout the years?

People have all kinds of reasons not to attend synagogue and spend the money necessary to become part of sacred communities. The local synagogue could spend significant funds for security.  And security will still be just another one of those reasons that keep people away.

There are no easy answers. Consult with your local police department for advice regarding security. Really listen to the concerns of congregants and be transparent with them about the steps you are taking regarding security.

Tax Benefits?

Do people support the synagogue financially because it is advantageous in terms of taxes?

I doubt it is the first thing people think about when considering becoming a part of a synagogue community. Even when the first invoice comes for a new synagogue fiscal year, tax advantages are seldom the first thing that pops in our minds.

Maybe for people with 5 and 6 figure capital or endowment commitments to the synagogue, charitable contributions and tax planning is something to ponder. But not for most of us.

Before the recent tax law changes – taking effect in 2018 – 30% of tax filers itemized their tax returns. While we must wait for the IRS to share such information for 2018 returns, studies are predicting that only 4% to 10% of all filers will itemize. 2018 standard deductions will nearly double for everyone – $12,000 for a single filer, $24,000 for those filing jointly. It is the maximum deduction of $10,000 for mortgage interest and/or real estate taxes that will really impact the decrease in those able to itemize.

The statement “Your donation is tax deductible to the fullest extent allowed by law” should still be on dues invoices and fundraising appeals.  There will still be congregants who will be able to itemize and who will benefit tax-wise by their synagogue support.

How people feel about the synagogue and its vision remain the more dominant influences related to giving.

There are still a couple of ways for contributions to be advantageous in terms of taxes. Paying one’s synagogue dues through gifts of appreciated stock, including shares of mutual funds, is still a pretty good deal. Persons doing this do not have to pay capital gains tax on the sale of the stock as they would if they were to just sell the stock outright.

To make such payments work, the synagogue has to establish a brokerage account to accept such payments electronically. Anytime invoices are sent to congregants, you might also include a statement that simply states “You can pay off your dues/pledges with appreciated stocks, bonds or mutual funds. For more information, email or call the synagogue’s executive director” (or whoever is the Lead on this).

For congregants 70 ½ and older, utilizing your IRA to pay your synagogue dues or other charitable commitments to the synagogue is the best tax advantage. Payments are made directly from the congregant’s IRA. And you can make up to $100,000 in charitable contributions from your IRA annually. Such gifts do not have to be reported as income.

Congregants with some financial savvy will know about utilizing shares of stock or mutual funds to make payments, and of course utilizing their IRAs as vehicles for charitable payments. The synagogue should highlight such payment options as well. Such payment information should always be on or included with invoices. Separate emails during December encouraging support/payments would be helpful as well.

A congregant’s “donative intent” will always be the primary reason for charitable giving. So appeal to congregants’ hearts and heads. Any tax advantage is just an additional benefit.

High Holy Day Appeal:Facebook

I admit it. I am an avid user of Facebook. Perhaps 2-3 times a day. I catch up on my children and their posts – although I sometimes think that they don’t share all of their posts with me. Friends and colleagues, too – some of them share too much. And various groups that I am a part of, including our synagogue.

And this sponsored ad popped up in my Newsfeed.  I haven’t had an opportunity to work with the leadership of this synagogue.  I am sure that Congregation Beth Shalom, an Orthodox synagogue located in Providence, RI purchased a Facebook ad so that the ad about the synagogue’s Kol Nidre Appeal would appear in all of the newsfeeds of the 425 members of its Facebook community (one of them is a friend of mine).

Years ago, when the internet was in its infancy and direct mail was the primary means for grass roots fundraising, direct mail consultants would always stress a few specific goals: for the recipient to open the envelope, for them to read the letter, to write a check, and put it in the mail. And you were excited to get a 3-5% response rate to a prospect (never gave before) mailing. And a 10% response rate for prior donors.

Email philanthropy follows a similar game plan. A catchy subject line so that the people open up the email. My view has always been that you have the size of a screen – perhaps 3 paragraphs for a laptop, and 1 for a smartphone – worth of prose to tell your story and make your case for people to give. A couple of links to a donation page, and a “radio button” that reads “Donate” also has to be a part of what is before the eyeballs of the readers.

I like this Facebook approach. I hope the leadership of Congregation Beth Shalom also sent a regular letter along with 1-2 emails to its congregants about its Kol Nidre Appeal. The more communication/marketing channels you are utilizing as part of the approach for the High Holy Day Appeal, the better.

In a few paragraphs, the message is clear: the Kol Nidre Appeal is important to the synagogue and they need to raise $30,000. And gifts of all sizes – $18 to $1800 – are important.  And 2 DONATE “radio buttons”, along with other check-off options – pay by check, pledge, multiple payments – all that is readable without a lot of scrolling effort.

And think of the reach of this ad through Facebook. If each person in the synagogue’s Facebook community has just 200 FB friends, this ad is appearing on the Facebook feeds of 85,000 different people.

I am sure that there are congregants who are not on Facebook. I know at my synagogue, there are less than 10% of the congregants who don’t use email, primarily octogenarians.  Over time, these numbers will lessen.  Twitter and Instagram are social media platforms that continue to grow and should be considered as additional synagogue channels.

Technological advances move pretty quickly, so in 5 to 10 years, there may be other social media platforms down the road that we will be using that have not yet been invented.

“Curb Your Enthusiasm”

The big envelope comes from the synagogue with the sticker on the front “High Holy Day Information inside”. It sits on Larry David’s desk for a couple of weeks and the day has come when he needs to decide what to do.

Larry has been debating for a few days in his own mind whether he wants to go to High Holy Day Services this year, and even continue at the synagogue. For the last few years, he has only gone 3 days a year. His children and grandchildren live in New York and won’t be coming home. When he does go, he sits there for a couple of hours anticipating the rabbi’s sermon and remembers it as often being a letdown. He decides he could use those days to work on a few writing projects and throws the big white envelope in the waste basket.

Two days before Rosh Hashanah, his friend Jeff comes over to visit. Jeff is all excited. He and his wife just had breakfast at the diner and bumped into the rabbi, who gave them a sneak peak of this year’s High Holy Day Worship – as well as his Rosh Hashanah sermon. “You have to come, Larry. It is going to be great. A band, a choir and the rabbi is going to preach about what we can do to make the world a better place.”

Well if Jeff is going, “I am going, too”, Larry thinks. So you can bet that the writing of his next sitcom is going to have to be delayed for a few hours while Larry calls the rabbi, and whoever else he has to call, to get those precious tickets.

I have written about that maybe we should stop using the word tickets, and call it “Spiritual Passes”. That way, we would no longer be speaking about tickets in the same vain as we do tickets for the Red Sox-Yankees series next month, or to “Evan Hansen” and “Hamilton”.

High Holy Day Tickets are a benefit of membership and belonging to a sacred community. Synagogues also use High Holy Day Tickets for security purposes. Having a ticket means that you belong and the ushers (and sadly, police officers) can let you through.

Can High Holy Day worship ever be open to the public? Security issues can be overcome – which of course costs more money. And you don’t want to alienate congregants who provide both ongoing financial support as well as volunteer their time. Space might also be an issue. Some synagogues have dealt with this through community-wide worship in more public spaces. Or making all services open to the public, except those that always have high attendance – First Day of Rosh Hashanah, Kol Nidre and the morning worship on Yom Kippur.

Maybe Larry David, after his various telephone calls, secures those tickets, that he can pick up at “Will-Call” – the synagogue’s office. If he can’t snag the tickets, maybe he just shows up. He shares his saga with the usher at the door who recognizes him and lets him in.

I wonder what will happen at the Community Seder….

Events: Fun or Funds?

My cousin Rob is an Optometrist. As a “side job”, he is an amazing woodworker and makes an assortment of wooden bowls of different sizes, usually from trees that have come down from snow and rain storms. Every year, Rob participates in a few Craft Fairs, one held at a synagogue as its annual big fundraising event.

It was either last March, or the March before, there was a huge rainstorm the day of the synagogue’s Craft Fair. Rob and many of the other vendors – who all had spent $200 upfront to reserve a table – made the trek in the rain to set up their wares. But attendance was significantly lower than in prior years. This of course impacted sales as well as the synagogue’s take, as the synagogue also received a commission on all sales. And of course they also sold refreshments.

So an event that generated $40,000 or so in the 3 prior years, and where the projected net income in the synagogue budget was $45,000, operated at a $20,000 loss. That might not seem like a whole lot of money to some. But with the end of the synagogue’s fiscal year approaching on May 31st, the $20K had to come from somewhere.

I have heard this story a lot. Weather certainly does impact the success of fundraising events. I cringe when synagogues in the Northeast tell me their big fundraising event is in February.

Success from year to year is unpredictable for other reasons besides weather. Having honorees at events with the hope that they will generate donations raises similar issues of unpredictability – for synagogues and big organizations, too. One year, the synagogue’s Person of the Year is Joe. He owns a company that makes corrugated boxes. He is on the board of the local hospital and the Chamber of Commerce. He provides you with a great list of his customers, his lawyer, accountant, and friends.

The next year, the persons of the year are Mimi and Dan. Mimi is a retired public school teacher and Dan retired 5 years ago as a school principal. Both are great people who have done so much for the synagogue in terms of being on the board and committees. Most of their friends are from the synagogue. The list they provide is of people with far less giving capacity than Joe’s list.

Everyone will have a great time. But the budgeted projection is for $70,000, based on the successful effort honoring Joe last year. The $45,000 income that is realized this year is great, but it leaves the synagogue’s board with end of fiscal year budgeting and fundraising challenges it wasn’t counting on.

The primary goal for synagogue events should be for fun and to build community. Costs should always be covered, and the expectations of fundraising should be modest at best.

Being short of budgeted income expectations from events means that synagogue bean counters will have to adjust line items, or approach the synagogue’s leadership – board members and other supporters – for additional contributions to make the budget. You can do this once in a while. People may become a bit concerned about the leadership’s budgeting prowess.

A donor centered approach to fundraising, asking people with capacity for meaningful gifts as part of a High Holy Day or end of year appeal will reap better results and will be more predictable in terms of budget projections.

 

P.S. Check out this Blog on this same topic.

 

What Are We Looking For?

A few years ago, we moved. “Downsized and modernized” was my mantra. We lived on a small block with a lot of activities – annual Labor Day Block party, December holiday gatherings. There was even a communal snow blower. Picture a Norman Rockwell painting of a New England neighborhood.

But in New Jersey.

One of the downsides of our current condo development with 78 units in an enclave right off of Main Street is the lack of community feel. People are certainly nice, but there is no natural opportunity other than the annual Condo Association meeting to bring people together.

Our synagogue, Temple Ner Tamid, remains a vital anchor in our quest for community. The move brought us a little further away distance wise – 2 ½ miles more and a couple of steep hills. But the synagogue remains a big part of our lives, and of course our support system. To us, it seems logical that feeling a part of a community is part and parcel of synagogue membership. As many of you know, there have been many many blogs and articles written and workshops offered about how often this doesn’t happen.

When it comes right down to it, most people throughout their lives are looking for community. Parents want their young children to be a part of a playgroup – and they want to form a bond with the other parents. In college, we gravitate to people with similar interests with whom we could solve the problems of the world, play basketball, listen to music and hang out. As adults we want to get to know our neighbors or even the people on our commuter train.

When my parents, in retirement, moved to Florida, they became a part of a self-directed group of retirees with weekly breakfasts, book groups, interesting speakers and social gatherings.

Joining a synagogue follows this theme.

Millennials are finding community through Facebook and other forms of social media. I posit that they can solely rely on their laptops and smartphones for community. At some point, a desire for human contact will kick in. There will be the rare individual who would rather be a total recluse and choose most often to keep to him or herself. At some point, one needs to physically be with others.

When it comes to building community in synagogues today, we use a lot of buzzwords:  “engagement”, “relational Judaism”, “outreach”, “membership”, and now “Small Groups”. Perhaps the Chavurah movement in the 1970s was in incubator for this.  Small Groups bring people together to pray, to eat, to do social justice projects, and really to be a part of the synagogue in meaningful ways. Many churches today are also using Small Groups in similar ways. The challenge to engage people so that they feel a part of a community is similar, no matter the size of the synagogue or church.

The biggest challenge for synagogues is starting up such a program. Involvement of clergy to initially bring groups together and lead initial programs and provide ongoing ideas to help nurture Small Groups is critical to success.

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