Financial Management of the Diaconate
The financial management of the diaconate is part of the total management picture. With regard to this financial management you should express your opinion concerning such matters as: the required amount of available operating funds, what strategy should be followed to ensure a dependable incoming cash flow (collections), what organizations will receive diaconal support, for what reason(s) and how much, what policy will be followed with regard to financial support and elimination of debt, as well as the administration of financial affairs.
In matters of financial support it is essential that anyone should be in a position to share in the joy of God's people. Financial problems should never become the cause of someone's being deprived of the means of grace. It is the task of the deacons to see to it that everyone will receive sufficiently to offset what is lacking.
Some principles that need to be observed
Financial management requires being accountable for the way the support is given. This procedure should never be based on personal preferences or be carried out in an arbitrary fashion. We formulate a few principles to be observed:
- One of the goals of diaconal management is to ensure that anyone should be able to share fully in the joy of the congregation. This joy can be dimmed by financial hardships. In this case the well-being of one's neighbour is endangered.
- The Scriptures teach us that God wants us to give and lend our brother and sister freely, openhandedly, whatever they are in need of (Deut. 15:7-11; Ex. 23:11).
- As for financial problems, it is advisable to differentiate between temporary situations and those that are more structural in nature. It should also be established whether the financial situation is experienced as a real hardship. Not everyone will react in the same way under similar financial conditions.
- In assessing the situation, one should take into account the individual responsibility of the person(s) concerned, and if needs be also that of relatives involved, as well as the diaconate.
- In distributing the gifts there ought to be a sensible balance between conscientiousness, responsibility, and openhandedness.
The management of diaconal support
In what follows we shall mention some guiding principles, which can be adopted specifically in your financial management.
One principle of diaconal management is the prevention of financial hardship. To this end, the diaconate espouses a financial management that is alert and active. This management includes such matters as: giving financial advice (budgeting, drawing up a budget for the year, analysis of expenditures, giving advice on how to deal with one's financial affairs, etc.). It also includes items such as giving information on potential sources of problems (insurances, pension plans, etc.). It is the purpose of diaconal management to make sure that all those in the congregation who are unable or insufficiently able to support themselves with the normal necessities of life, will be financially or materially supported. The goal of diaconal support is to have the involved persons become self-supporting again, as soon as can be reasonably expected. (In this connection someone remarked: 'it is better to supply a fishing rod than a fish.') Before providing any financial support, you should carefully investigate whether, and to what extent, financial support is needed. The nature and the duration of support should prevent that those involved will finally become dependent on permanent diaconal support.
In considering the possibilities offered by social legislation, one would like to advise that these should be used sparingly, and then only in incidental cases. Depending on the situation, to render financial support can take on the form of either a gift or a loan. Those that receive financial support should make it a habit to conduct their financial affairs in a responsible way. Information on certain budgetary ground rules is available in pamphlets issued by government agencies, banks and other financial institutions. Some of these budgetary standards may be useful in determining the extent of specific diaconal support.
The applicant for financial support must remain anonymous in all financial records. Approval for diaconal support will be obtained by means of diaconal consultation and agreement (based on a majority of votes). Any binding decisions will be recorded in writing and endorsed by two deacons. The treasurer of the diaconate will look after the implementation of the arrangements made.
Cash payments (current account) will warrant that the name of the recipient cannot be traced back to any financial records. What is required, however, is that two deacons countersign a cash withdrawal form which does not specify the recipient's name. The deacon of the ward will keep regular contact with those receiving diaconal financial support. This is done to ascertain whether or not the situation has changed to such a degree that an adjustment of the support is indicated. When financial help is provided, the comfort of God's Word should never be omitted.
On giving financial advice
Financial support is by no means always the one and only solution. Part of the financial problem is caused by poor judgment in one's own income and expenditure patterns. Deacons are in a position to help members of the congregation by giving them budgetary advice, either directly or indirectly. Financial guides, handbooks, and software can provide useful advice in these matters. Further, one should try to become knowledgeable about possibilities or opportunities made available through government and social agencies.* (Transl. note)
In addition to all this, the deacons are at times confronted with questions about personal tax returns. In particular the aged (though not exclusively so) will experience difficulties with the completion of this form, the format of which exhibits anything but simplicity. This is a task typically suited to be delegated: enlist the help of brothers or sisters who are well versed in these matters.
Finally, it is the duty of the deacons to broach the subject of distributing the gifts from the rich and the poor. The Scriptural admonition to give freely and generously to all those who are in need should reverberate in the diaconal work. The congregation supplies the deacons with the means to let all those burdened by financial troubles share in Christ's love and care.
Other diaconal expenditures
Expenditures within the congregation
minimum income levels
It was found that the number of those entitled to social support is on the increase. For instance, in Rotterdam 60% of this number is reported to have sizable debts, with an average debt of Hfl. 4,500. This means that large expenses, such as the purchase of a washing machine or furniture, can hardly be made (on a minimum income) without incurring debt. This problem will become even more serious in families with school going children between the ages of 12 and 18.
The deacons can give here their support in different ways, amongst others:
- assuming the cost of major appliances (refrigerator, washing machine etc.);
- making arrangements so that children will be able to have a vacation;
- giving a financial present on birthdays or statutory holidays;
- paying for a child's recreational activity.
The money in itself is not as important as the joy of again realizing oneself to be a child of God. Social isolation can be a result of no longer having the means for going on birthday visits, or celebrating birthdays at home, or participating in social events. This isolation must be dealt with and should be reversed.
consolidation of debts
Deacons are sometimes confronted with families that to all intents and purposes have a sufficient income, but whose habitual expenses exceed income. The convenience of borrowing money, credit cards, consumer credit (and teleshopping) can result in what appears to be an insolvable financial problem. The downward spiral of debts, additional borrowing and thus accumulating more debts, seems to be unstoppable. In such a situation it would be a wise move when the deacons, together with those involved, try to come up with a proposal for debt consolidation. A resolution is sought for payment of tax arrears, and banks are approached in the search for a satisfactory solution.
This consolidation attempt by the deacons may result in an interest-free loan or one-time elimination of the debt burden.
Diaconal financial support could be taxable (consult relevant tax regulations), but this does not apply to lending money.
In addition to diaconal support within the congregation, charitable organizations will frequently make an appeal to the deacons for financial help. These appeals to the deacons are not exclusively limited to one's own church federation or its associated organizations.
Relieving distress and want outside one's own circle, whether locally, country-wide, or even beyond, is actually more of a congregational concern. As things stand, the deacons are local office bearers and are fulfilling their tasks within the congregation. However, the members of the congregation have as Christians the task to do well to their fellowmen. The deacons could lend a hand as coordinators and at the same time point out to the congregation what its responsibility is.
Here are some aspects that could be taken into account in your managerial considerations:
- Diaconal responsibility is primarily concerned with the local church. Further, there is Scriptural precedence that churches within the church federation (including its associated organizations) shall have the attention of the deacons when, for instance, they are asked for support. The very existence of these organizations makes it possible that members of the congregation can avail themselves of professional, Reformed help.
- Each year the deacons are to determine basic diaconal expenses which will include support to Reformed charitable organizations.
- The guidelines and advice of deputies for diaconal affairs (with reference to the levels of support) should carry substantial weight in establishing these levels.
- The deacons have a set of priorities for giving financial support to third parties not included in their own congregation. These priorities may include certain specifically Reformed charitable organizations, to be followed by other organizations within the Reformed society. In the latter event, the diaconal support is restricted to giving assistance only in cases of a financial deficit. Further, the deacons could make a selection from a number of institutions or organizations, and then recommend these to the members of their congregation for donation purposes.
Contingency fund and provisions for support
Many deaconries experience difficulty in estimating the size of a contingency fund that should be in place to meet future needs. Generally, this is done by taking into account the expenditures listed under 11.1.2 and 11.2. The diaconate should make provision for the minimum amount of projected funds needed, as well as any overrun that could occur. As far as I know, there are no solid figures available that might serve here as a standard formula. What follows next will serve only as a suggestion, a sort of rule-of-thumb device which is based on 100 home addresses or households in the congregation:
- Diaconal support (general): 3 per 100 addresses/per annum, @ $750 (average);
- Diaconal support (minimum income level): 3 per 100 addresses/per annum, @ $750 (average);
- Debt consolidation (minimum income level): 1.5 addresses/per annum, @ $4000 (average);
- Debt consolidation (other): 0.5 addresses/per annum, @ $4500 (average);
- Financial loans: 1 address/per annum, @ $2000 (average).
Taking the above as a guide line, we can see that a congregation of 100 home addresses would have to provide the following as a contingency fund:
$14,750 per 100 home addresses.
Sources of income
Practically, there is only a limited number of sources of income that are available to the deaconry:
The collections are the primary source of income. Each year the deacons should determine how many collections they need to cover the projected expenditures. Quite frequently, the contingency fund will have to be replenished by means of collections.
Incidentally, it remains an open question if it is wise that the deacons initiate collections for specific purposes, which are usually collections for charitable organizations. A positive aspect is that the congregation will be closer involved in the work of these organizations. Special attention for these collections and their causes can be given in the church news and in the regular announcements from the pulpit. When an agreement on an (annual) quota does not exist, this procedure can be followed. However, when a mutual agreement on a set quota has been made with an organization, the diaconate is morally bound to that agreement, barring financial calamity. Having special collections means, therefore, that the deacons will cover any shortfall by drawing on available sources of income. But the effect will be that the aim of the special collection will be lost to a certain extent.
Other sources of income
Donations, legacies, endowments, securities etc. are a second source of income. It will be difficult to estimate the extent of this kind of income. But it might be prudent to settle on a conservative figure. It is advisable that the deacons try to stimulate donations. In doing so they are able to directly involve the congregation in some part of their diaconal activities.
Diaconal voluntary contributions
The implementation of voluntary contribution can be considered in situations when major diaconal expenses have been incurred for an extended period.
In the case of insufficient funds or else unexpectedly high expenses, one can make arrangements for a temporary loan. This possibility can be considered when the expenditures are of a one-time nature, or else when other sources of income will become available in time to come.