IconCMO Blog

How to Record Fundraiser Proceeds in IconCMO

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Does your church invite members to purchase an Easter lily in memory of or in honor or in celebration of a family member, friend, or occasion?

Photo Credit: Memotions via Compfight cc
Photo Credit: Memotions via Compfight cc

You may be tempted to include the payments in with the regular offerings, but there’s just one little problem with that. You put an IRS disclosure on your contribution statements saying something along the lines of “No goods or services were provided by the church in return for the contribution.”

Which poses another question: Can someone deduct charitable contributions, even if they receive something in return?

If you make a contribution to an organization and receive something in return, you may still be able to get a deduction on your taxes. However, your deduction is limited to the excess of what you gave over the value of what you received. For example, if you gave $100 to a charity dinner and the dinner was worth $30, you can deduct $70. If you make a contribution of more than $75 and receive goods or services, the charity must give you a written statement that tells you the value of those goods or services.

For more information regarding charitable contributions and potential tax benefits, visit the IRS Web site and search Publication 526.

Source: Legal Zoom

So if you aren’t supposed to include Easter lily money in with the regular contributions, then how do they get recorded in IconCMO?

The first step is to go to the Contributions: Management: Cont-Maintenance window. Set up a new fund named ‘Easter Lilies’ and label it as a taxable fund.

easter_lilies_church_fundraiser_1

Next, use the Easter Lilies fund when recording the transactions in a batch.

easter_lilies_church_fundraiser_2

You can put a comment stating the value of the plant if they donated above and beyond the value. Then they can use the difference as a tax deduction.

easter_lilies_church_fundraiser_4

Any transactions recorded to the Easter Lilies fund will not show on the regular contribution statements; however, you can print a separate statement for your taxable fund(s) if you’d like. This option is in the Contributions: Management: Cont-Statements window.

easter_lilies_church_fundraiser_6

Preview Sample Easter Lily Statement

That’s it!

And this isn’t just limited to Easter lilies, it can be used for any type of church fundraiser (e.g. bake sales, auctions, car washes). For additional information on donation guidelines, visit our the Church Guide on our website.

As always, the information presented on this Site should not be construed as legal, tax or accounting advice. You should consult with a professional adviser familiar with your particular situation for advice concerning specific tax or other matters before making any decisions.

Don’t Rely on Luck to Turn Your Pledges Into Contributions

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Photo by Alan Witikoski

Are you hoping for a pot of gold at the end of a rainbow or are you planning to catch the elusive leprechaun? If you aren’t feeling lucky, a sure way to turn pledges into contributions is to provide quarterly giving statements to your members.

Let’s face it, your members do not wake up thinking about what they have pledged and given to your organization. Why not give them a visual reminder to help stay on track for the year?

Here are some ideas of what to include in your quarterly statements:

Pledge amount

Several organizations request a pledge from members to help set their financial goals. However, many times the pledge amount is collected months before the giving period starts. Have your members forgotten what they pledged?

Contribution totals

This shows the member how much they have given year to date. It is very important for your members to see what they have given on paper. Are they in line to meet the goal of their annual pledge? This will help them see reality.

Invitation

Invite your members to continue to give. Provide an envelope for their next contribution, or include instructions for online giving. Ask them to do something, not just read something.

Quarterly statements are typically sent out the beginning of the month following the end of the quarter. For example the first quarter ends March 31st. After your March 31st contributions have been posted you should make the statements available the beginning of April. Also set calendar reminders for July and October.

Good Luck! Although with Quarterly Statements you won’t need any.

For instructions on creating Contribution Statements in IconCMO, please visit our prior blog post The IRS and Your Contribution Statements.

Quarterly Meetings – What Reports Do You Need?

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IconCMO Quarterly Reports
Photo Credit: dantaylr

Around this time of year, church boards often have their first quarterly meeting and review the financial aspects of the church. Church accounting systems like CMO offer a great variety of financial reports to review just about anything you could think of, but what are the main reports that treasurers and financial secretaries should provide for board review? What reports are essential to clarifying the financial health and activity of the church so that the church leaders can make informed decisions?

To have a clear picture of the church’s finances and to make informed decisions, church leaders need reports that show them
1. what’s happening in funds
2. details about expenses and revenues for the quarter
3. a clear overall picture of the financial position of the church – the net worth of the organization, the total liabilities, total assets, etc.

Essential Reports

Below are three IconCMO reports (found in General Ledger: GL: GL-Reports) that can clarify and summarize the church’s financial position and activities.

1. Statement of Activities
This report works like a Profit and Loss (for all you for-profit accountants). It shows revenues for each revenue account, expenses for each expense account, and total net revenues after expenses are taken out. The report should be run for all funds combined to see the overall expenses and revenues of the church, and it can also be run for specific funds of special interest for the meeting (maybe to see how a new Capital Campaign fund is doing). You can set the report’s date range to cover activities for the first quarter of the year.

Click here to see Statement of Activities

2. Change in Net Assets – 2
This report gives a summary of the balances of each fund and the money coming into and out of each one. It also shows any transfers between funds – an important transaction type that won’t show up on the Statement of Activities. Again, you can set the report’s date range as needed.

Church Management Online Change in Net Assets 2

3. Statement of Financial Position (Balance Sheet)
This report shows the overall financial health of the church – total assets, total liabilities, total net assets ( = total assets – total liabilities). There’s no date range for this report, just one “as of” date because this report gives a “snapshot” of the financial position of the church as of that date. Again, the report should be run for all funds combined, and can also be run to see the financial position of any funds of particular interest.

Click here to see Statement of Financial Position

Skeptics vs. Cynics: Web-Based Church Software Security

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I subscribe to a newsletter called Great Work Provocations. Every weekday morning, I get an email with a short yet inspirational, thought-provoking message. This morning’s email brought me this little gem:

Invite the skeptics in. They’re desperate to be proven wrong. But avoid the cynics. They’ve already made their minds up.

–Great Work Provocations

Reflecting on how I could apply this message to my work, I realized that I encounter this particular situation when talking to potential and existing customers about our software.

Skeptics

When a church evaluates church management software, typically at least one person in the church is skeptical of moving the church’s data to the cloud. And this isn’t necessarily a bad thing. When making a big decision such as this, it can be helpful to have someone who disagrees, or at least plays the part of devil’s advocate. If their objections can be rebutted, it reinforces the sense that the church is making a sound decision. On the other hand, if their doubts cannot be overcome, it can assist in identifying potential problems.

Cynics

I think the term “cynics” seems a bit harsh but I get the point; there are some people who say they will never use web-based church management software. We actually have a number of customers who are perfectly happy using Revelations, our desktop software. They have absolutely no plans to move to the cloud, and as we’ve said before, there is absolutely nothing wrong with that. If they are more comfortable using a Windows-based program, we won’t argue with them!

For those of you who are skeptical, yet open to the cloud

Here is an outline of the security precautions Icon Systems has implemented for its web-based church management software – IconCMO.

Encryption

Whenever you are working with IconCMO – from the point you log in to the time you exit – all information transferred from your computer to our servers is submitted via 256 bit SSL encryption. Icon Systems registers the certificates with GeoTrust for verification of a valid certificate with your browser. This means all information is sent from your computer to the servers over an encrypted connection.

Physical Server Security

The servers are placed in locked cabinets in a key card accessed building designed to house servers.

Application Servers

This may seem strange, but customers do not have the ability to save information to the database. They must submit the data to the Application servers. The Application servers review the data to verify it is acceptable and execute the necessary save. Only the Application servers can write to the Database servers. The firewall for the Application servers only allows connections on ports 80 and 443. 80 is the HTTP non-secure web port and 443 is the HTTPS secure SSL web port.

Database Security

All Database Servers are placed on a local network. The database servers do not have a defined route back to the outside world. The only servers that can view the database servers are the application servers. The database servers limit the application servers as to which ports they are allowed to access. Icon Systems does not disclose this communication process between the servers or the ports it uses.

Employees

All Icon Systems employees are required to sign a document specifying they will not access any customer databases unless the customer approves of them opening the database. Information viewed during this process is not discussed, except when resolving customer issues.

Information Security

Icon Systems is in the church software business; company policy states no information provided to us by a customer will be shared with or sold to another company or agency unless required by law or court order.

Power

All servers are connected to a UPS device and the servers always use battery power. If the power goes out, the changeover is seamless so there is no temporary power flicker. The UPS devices are capable of running up to twelve hours by themselves. A diesel generator will start running within five minutes of the initial power outage and has enough fuel to keep all systems running for seven full days.

Site Catastrophe

Nightly backups are created and sent over an encrypted SSL connection to a second fully operational hosting facility located in a different part of the country. This second site is currently set as a Read-Only server, but could be changed quickly to a Read-Write system in the unlikely event that a catastrophe destroys the current hosting site.

Note: this photo was taken by Ronnie Garcia, it is not a photo of actual Icon Systems servers.
Note: this photo was taken by Ronnie Garcia, these are not a the actual Icon Systems servers.

Hopefully this list gives you confidence in our company and peace of mind about the welfare of your data. Yes, moving your church to an online management system can be scary, but if done correctly, it can open up a whole new realm of possibilities.

Help! Why are my checks/labels/reports suddenly printing funny in IconCMO?

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We’ve been getting that question a lot this week!

Here is the answer

The new version of Firefox (version 19) includes its own PDF viewer. So your checks are now showing in that instead of Adobe Reader like they normally would.

If you’re using another browser such as Safari, Chrome, or Internet Explorer you can just disregard this whole thing.

firefox_logo-wordmark-horiz_RGB_iconcmo_church_software

If you are using FireFox, we have instructions for switching back to Adobe Reader so you can go back to printing checks, labels, and reports happily in IconCMO.

How to disable the FireFox PDF Viewer

Open a new window or tab in FireFox (you don’t have to be logged into IconCMO)

Type the about:config into the URL address bar

Hit the Enter key or click the arrow to go to the address

pdf_viewer_firefox_19_iconcmo_reports
Click “I’ll be careful, I promise!” button, if prompted

Search for PDFJS

Double click on pdfjs.disabled

The value next to pdfjs.disabled will change from false to true

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Next, go to your menu at the top of FireFox and select Tools (hint: if your menu is hidden, press the Alt key on your keyboard to see it)

Under the Tools menu, select Options

Click on the Applications tab

Note for Mac users: Applications will be under Firefox: Preferences instead of Tools: Options

Change the Adobe Acrobat Document to Adobe Reader

Change the Adobe Acrobat Forms Document to Adobe Reader

Click OK

pdf_viewer_firefox_19_iconcmo_reports_6

And you’re done!

Church Software and Data Conversions Part II

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In the first part of the series, we discussed exporting and importing data and the worth of the data. If you missed it, read the first part here. In this final series we will discuss the remaining three topics for church data conversions.

  • Mapping the current database fields to the new database
  • Software compliance after conversion
  • Price (Can we afford the data conversion?)

Mapping the current database fields to the new database

This can pose problems when the new database doesn’t have the fields available for all the data. The first decision is if you want that data to be imported – in other words do you still use that information? As time passes, some data becomes obsolete and this is the best time to remove it before it is imported into the new system. Second, if the data is needed, then where should it go into the new system? This is called mapping the data. For example maybe a household has 3 different phone numbers. In the old system each went to an individual member in the household because the system did not have a primary phone number field. The new system may have that primary field and also the ability to save the phone number to each individual member. Would you still put the phone number on each individual and leave the primary blank, or put in a primary phone number from one of the three that are available?

Software compliance

After a data conversion, software compliance is essential to a church maintaining their tax exempt status. A data conversion must consider the implications of bringing a data set into a solution that may not have all the required fields that are needed to stay compliant. On membership data, this typically is not an issue, but in contributions and accounting, it could be a problem. For example, if you imported contributions and the “giving dates” were missing for certain records, the contribution statements do not meet IRS guidelines. In accounting, every transaction not only has to be associated to a chart-of-accounts line (e.g. expenditure, revenue, etc.) but also an accounting fund. If the data set does not have both elements, the end result is a system that is not compliant. That’s why many, if not all, church software companies do not import accounting transactions into their solution.

Price

Can we afford the data conversion – in addition to the initial cost of the church software? Price is always a concern when coming on board to a new system. The first rule is to ensure you have a firm data conversion price established from the software vendor. The next thing is to ensure that they know exactly what you want done for that price. Software vendors many times will ask to see the data first to give a price estimate and the church needs to be open to this. After all, a mechanic probably wouldn’t give an estimate for fixing rough running car without seeing it.

As a church, you should compare data conversion cost closely and realize this is a sunk cost; in other words, if you are not happy with the product in 10 months, you lose this data conversion money. Ensuring that the new product will do what you want is essential first before moving on to it with a data conversion. Quality in data conversions across software vendors really doesn’t play much into the decision. They all know their product and how to convert data in many forms. When the quality is comparable and both products are similar in features that you need, there is not much of a reason to pay $700.00 to go with one company verses $200.00 with another.

Photo Credit: kjetikor
Photo Credit: kjetikor

A couple last thoughts:

A very detailed analysis should be completed before considering other software vendors, and churches should examine whether the motives they have for changing software are really good reasons. What if a new employee comes in and calls the current software into question? Let’s say that the church as a whole is happy with their current software, and it’s addressing a majority if not all of their needs. But the church recently hired a new employee that doesn’t want to learn the current software because they used a different one for 20 years. Is moving to new software based on this reasoning really a software issue or a human resource issue? Ensuring that the church is changing for the right reasons instead of getting caught up in church politics is very important to the morale of the staff, volunteers, and other users of the software.

Data conversions are never perfect in any solution regardless if it is for the church market or some other market. Churches need to keep that in mind and form reasonable expectations in regards to the data conversion. Additionally, converted data will only be as good as the original data the church software company has received from the church.

Church Software and Data Conversions Part I

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There are many reasons for churches to change the software they use to track membership and financial records. Software companies can go out of business, or their views of technology trends may not match the church’s views. Also, changes in church leadership can have a powerful effect on what software is used. These matters are only some reasons churches change their software vendors on occasion.

Photo Credit: kjetikor
Photo Credit: kjetikor

If a church has been managing its records with any given software, and if that church decides to use a new vendor and new software, it may be a good idea for them to convert their data from the one software to the other, rather than reentering it all. But is such a conversion a good idea?

Here are a few important things to consider for a data conversion:

  • Exporting and importing the data
  • Data worth (Is the data worth exporting or should we start over?)
  • Mapping the current database fields to the new database
  • Software compliance after conversion
  • Price (Can we afford the data conversion?)

The first part of the blog will discuss the first two points above, while the second part will discuss the remaining three points – stay tuned for the second part. Keep in mind these are not all the issues that a church may run across.

Exporting and importing the data can stop a data conversion dead in its tracks. The church should really try to export their data from their existing system before shopping around for new software. Why? If you can’t export the data into a usable format to bring into a new system, two big questions are answered. It tells you that you will need to plan for the church staff or volunteers to enter in the data. Also, it will save the church money because there is no cost in the data conversion.

After you successfully export the data, the next question is: can the new vendor bring it in? Typically, only the software vendor can answer this. We recommend that you send them a sample or the whole “data set” so they can determine if it is possible and give an estimated cost for their work.

Data worth

Is the data worth exporting or should we start over, inputting the data from scratch? Many times, for various reasons, data just is not worth importing.

Some considerations:

  • Maybe the database was neglected for many years or not updated – making the data obsolete.
  • Maybe data has not been well organized.
  • Some organizations must keep records for historical purposes. So while some organizations may not care about records from 1900, others do.

Whatever the case may be, the church is stuck with a decision to make – export the old data or start over. Sometimes starting over, while it sounds like a long process, is actually easier and cleaner depending on the current state that your data set is in.

How can you know? The first step is to export the data and view it in a program like Excel. Do you see inconsistencies in the columns? For example, a column used for the status of the members/households – is it right for each one? Date field inconsistencies can cause a lot of havoc when importing. To illustrate I will show one date which could mean two different calendar dates depending on the format of the column – mm/dd/yyyy or dd/mm/yyyy. When these formats are different throughout the column it is nearly impossible to convert the data with any accuracy. They all should be consistent (either mm/dd/yyyy or dd/mm/yyyy) if you expect to have a church software that will produce usable reports.

Data

01/04/2012 – using the first format above (mm/dd/yyyy) this date would be Jan. 1st, 2012, whereas, the second format would be 1st of April 2012.

Another issue to look for is “unknown” dates like the following example. Does the data have dates in the column like 01/04/xxxx, 01/04, and Jan. 4th with some unknown year in all three? While programming for one of the three variations would be acceptable, having all three in data makes it harder to bring in the data with accuracy. In other words all of the dates should follow one of the variations.

Watch for the second part of this post coming on Monday; we’ll talk about the remaining three topics for church data conversions.

Should Software Make the User Complacent?

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When complacency is warned against in a church on a Sunday morning, church management software (ChMS) is never accused of making people lazy—but ChMS often does. In humanity’s quest to make our lives easier, we have at times relied more and more on machines to make the decisions for us – some times too much. This reliance or complacency is one aspect where a software solution can be misused; humans will rely on the device’s judgment more than their own judgment [1].

Photo Credit: danielfoster437
Photo Credit: danielfoster437

 

Some possible processes in your church software that may make it easier for the users.

  • If we had an automated visitation assimilation process we would have less manual entry and more visitors would become members.
  • If we had an automated child check-in our children would be safe.

 

All of the above sounds great, but reality is, software can’t replace human judgment in ambiguous situations when humans are so complex. Computers are good for repetitive monotonous tasks, but humans are the best for ambiguous decision making. Church processes outside of these two areas should be reviewed and discussed to ensure that software complacency is properly addressed (e.g. membership, contributions, etc.).

 

Visitor Assimilation – Using church software that automates a majority, if not all, of the decisions for the user removes the personal touch that people seek in a church. Study after study have shown that new visitors come to church seeking a personal connection to people. Currently software has a hard time processing the personal touch and communication with the ambiguous nature that makes us emotionally driven humans.

 

For example, a church receives a visitor card with contact information and sends their first communique via email. Most visitors can tell if the sent email was personalized to them or one that was sent as a mass communication to all first-time visitors. While mass communication harnessed with technology has its place, is this the right place? Let’s look at it differently –  as a visitor would you rather get a personalized email with a few sentences strewn together or one that was sent to every one even if it had more information? The one strewn together was from someone genuine that took the time to write to a person and make it personal. It has a better chance of getting read and responded to than one that is used over and over again for all visitors.

 

Successful assimilation means the person successfully connected at a personal level first and didn’t get some canned response from the church or its leaders. You can read more about the assimilation process and how software should help in our previous article on the subject.

 

The link below is a story and some commentary from pastors answering questions about visitor assimilation from various churches’ perspectives. The story is about a person named “Deb” and the personal relationship that was built over a year with the parking attendants. They showed a personal and loving nature towards Deb without her ever stepping into the church.

 

http://www.churchleaders.com/outreach-missions/outreach-missions-articles/138861-rules-of-engagement-connecting-new-people-to-your-church.html

 

Questions: What kind of emails do you prefer to receive from a church that you visited the first time? Church leaders, what kind of email do you send to first time visitors, the mass or personalized email?

 

Child Check-In – Automated child check-in could definitely make children safe when correctly done and every process is adhered too. However, when this doesn’t happen often times a catastrophe is lurking right around the corner. As with most things in life that are made to protect us (e.g. software), harm can happen when not they’re not used properly. Is it possible the church chose a software that is so feature rich (e.g. automation like biometric for fingerprint scanning) that too few people understand its implications or use? Certainly there is a time where a feature rich system is needed; however, I would submit that only the mega churches fall into this category, possibly. Feature rich systems typically require on-site church IT staff to facilitate the proper use. Even the most sophisticated system needs a human behind it to make the ambiguous decisions that aren’t programmed into the software.

 

Let’s use an example of a grandfather picking up his grandchild at church. The grandfather is authorized to pick up the grandchild according to the software. You witness that he is visibly upset and mentions that he just had a car accident five minutes ago. Would you release the child into his custody without doing a little more checking into the situation or calling the parents of the child to ask them if it would be okay? While the computer says you can release the child into his custody legally, the human decision process tells us we should take some precautions first. The software was never programmed to make this type of ambiguous decision. There are subtle computer decisions everyday that give one result, but a human would come to a different result – often better.

 

Question: Has one child since last Sunday has a change in their parental guardianship? If just one child’s guardianship changed and wasn’t updated, then the wrong person could pick that child up – putting the church at a liability risk and worse putting the child in danger. What kind of system would the church prefer – one where the church updates all the information or one that puts that responsibility onto the parents?

 

Sources.

  1. Parasuraman, R., Riley, V.: Humans and automation: Use, misuse, disuse, abuse. Hum Factors 39, 230-253 (1997)

 

 

The IRS and Your Contribution Statements

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Churches can show their gratitude to donors when church staffers do all they can to help donors report their contributions to the IRS as tax deductions.

The best way a church can help in this process is to give end-of-year contribution statements to their donors that include a declaration like the following:

“No goods or services were provided by the church in return for the contribution.”

Wording like this is essential for donors to report their contributions.

(To learn what to do if donors do receive goods and services, or if donors make non-cash donations, see our free ebook – Recording and Increasing Church Donations.)

So how can IconCMO users include that important declaration for the IRS on contribution statements? IconCMO makes it easy. Below are the steps to follow, along with some screenshots to follow the outlined steps.

1. Make sure you’re in the correct fiscal year for the statements (Organization > Preferences > Personal Preferences).
2. Go to Contributions > Management > Cont-Statements in the left side menu.
3. Go down through the various options to set up the format, fund type, funds, name range, date range, and so on.
4. Click ‘Lookup’ next to ‘Letter To Use’. This will bring up a new window.

IconCMO Contribution Statements Window
IconCMO Contribution Statements Window

 

5. Under ‘Letter Name’ type the name of the letter you’re going to include (e.g. “IRS Note”).
6. Type the text of your letter in the big white box (e.g. “No goods or services…”).
7. Click ‘Add’.
8. Click the dropdown next to ‘Current Letters’ and select your new letter.
9. Click the ‘Close’ button.

IconCMO Add-Letter Window
IconCMO Add-Letter Window

 

The new letter name will show up next to ‘Letter To Use’ in your Contribution Statements window; it will now be included at the bottom of each statement. For future statements, all you’ll have to do to include the letter is click that same ‘Lookup’ button and select the letter’s name from the ‘Current Letters’ drop down.

For more information about contribution letters or any of the other functions in the window for contribution statements, go to Contributions > Management > Cont-Statements and click on ‘?help!’ in the upper left. A support forum post will come up with more detailed information. Please keep these ‘?help!’ options in mind when you have questions about other windows in IconCMO.

We also wanted to include the year-end instructional video, which can also be found on the homepage of your IconCMO account.

Happy New Year from Icon Systems!

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It has been an awesome year here at Icon Systems! We thought it would be nice to wrap it up with some highlights from throughout 2012.

We published not one, but two FREE e-books

We made a lot of updates to IconCMO. Here are just a few:

We formed a few new partnerships

And just in case you missed any of them, here are a few of the most popular posts from this year

Recap of 2012 from Icon Systems Church Management Software
Photo Credit: Unhindered by Talent

Thank you and Happy New Year!

A big thank you to all of our customers, partners, and everyone else for helping make 2012 so great! We are looking forward to working with you again in the New Year! 🙂