Administrative Assistance

IF THERE IS EVER A GOVERNMENT INQUIRY: It has been said "power corrupts and absolute power corrupts absolutely." The initial concept of American Government was individual States banding together under a Federal Government, which had very little power or authority. This has evolved, over the years, into a very powerful government, exercising authority not given by the Constitution. In the original tax laws the Ministry [Church] was regarded as sovereign - but with the passage of time, and many IRS regulations written which have the force [or color] of law, the Ministry now is tax exempt "only by grace" [a United States Supreme Court Ruling].

It is the Authors opinion that Federal Government intrusion into the affairs of the Ministry is entirely probable within a few years. Only those Ministries that have paid attention to corporate business detail will survive the first "inquiries." The IRS has the authority to deny [take away] the tax exempt status from the Ministry if wrongdoing is discovered. It is our contention that it is only a question of time before our benevolent government will decide to exercise their authority. Well written Minutes should reflect that the church has done business according to the By-Laws.This will greatly deflect any official "inquiry." If there are no Minutes, the IRS will assume the worst, and church leaders will have the huge and unpleasant task of proving themselves innocent of wrongdoing.

MINUTES IN A COURT OF LAW:  Having proper Articles of Incorporation, excellent By-Laws, are crucial, but having a Minute Book with many well written minutes in it, is an essential ingredient to having an entity that will afford protection in the day of battle, eg: a legal assault [Lawsuit]. The Minute Book is the primary document the Judge will examine to determine if the business has been run according to the By-Laws. If there are no Minutes, he will likely "Rend the veil," and the legal protection of the corporation [The "Veil"] will vanish. Now - the liability will fall personally upon the leaders of the church.

Having ministered in more than 1,500 church and para-church ministries, we find that the vast majority of recorded Minutes, if any, are greatly lacking in form and detail. A well written Minute Book is also necessary to provide continuity for future Board Members. There are no other records as helpful, or as important. Minutes have been described as the "Memory" of the legal entity. No Minutes? No Memory! No Memory? No defense in a lawsuit, and you will be utterly helpless!. With that having been said, let us share a few pointers about Minutes:

HOW TO WRITE MINUTES - If the Ministry is subjected to an in-depth IRS audit [a programmatic audit] or is involved in a lawsuit where the "Ministry Records" are subpoena, you would soon discover that the Minutes of the meetings of the Board of Directors are the most important of all Ministry records.

MINUTE HEADINGS: It is not sufficient to say, "The meeting of the Board." Refer to your ministry By Laws to see who has the legal authority. We have used the term "Directors," throughout this Book of Samples. Who met? The Directors, Trustees, Elders?. The Directors of what? Use the full legal name, including the statement "a non-profit corporation," and what state. Here are other important ingredients of excellent minutes:

• State the Date; Time; and Location of the meeting.
• Declare that proper notification was given;
• List, by their Office, those in attendance, and any visitors as well;
• Declaration of a quorum, listing each directors as present or absent.
• Approval of minutes of previous meeting by the board. If this is not in the minutes, the previous minutes are only the opinion of the secretary and not the official minutes of the board of directors. Some organizations have the directors sign every minute, and this is probably best, if you can do so.
• Resolution headings: it is a good idea to capitalize and underline the subject of each resolution, so you can easily find it in the old minutes five or ten years later. Example - ELECTION OF DIRECTORS.
• Keep it simple. Unless you are required to use Roberts Rules of Order, it is not necessary to record who made or seconded the motion, etc. It is sufficient to write – "After discussion a motion was duly made, seconded and carried and it was RESOLVED, that …. ". [Or that the above action be Ratified].
• If there is a "No" vote, or when a Board Member "abstains," the Minutes must record that as well.
• It is not required to record the discussion, of the members of the Board of Directors, if they never "act" or pass a resolution. In such a case, no Minute is required of that gathering.
• The Meeting Must Be Adjourned. A sample is given on both sample minutes.
• Each page should be numbered. eg:-( Page 1 of 5 )

An Annual meeting of the Board of Directors. This is the very least of what would be expected in any churches Minute Book. This is the appropriate time to reappoint Members to the Board; elect Officers; Set compensation packages for the following year; and ratify actions taken during the past year without prior approval of the Board. This would also be a good time to receive, and record, the "State of the church annual report" from the pastor [or President of the para-church ministry] and his goals for the new year.

A "called" meeting of the Board of Directors. This is what you would call any meeting held, where issues come up during the year, and it is necessary to address them. We have written the SAMPLES Manual, to show you the minimal format and content of writing Minutes. The Sample Minutes, Resolutions and Ratifications (of which there are more than 70), will serve as a checklist for your Ministry organization, helping you to:

• Identify issues that should be addressed and recorded in your Corporate Minute Book.
• Provide a basic format for writing a Minute for various issues.

RESOLUTIONS – What is a Corporate Resolution? This is the means of recording an action taken by the Board, authorizing or approving an issue in advance.

RATIFICATION - What is this? As our Minute/Record Book is the legal "memory" of our corporate entity, it is imperative to have good records and no "gaps." If and when we discover a business action has been taken (I.E. a change of signatures on thAe Ministry checking account at the Bank) without a prior meeting and written resolution of the Board, we must go back and get it in the Minutes. But How? A back dated resolution is illegal. That would be a falsification of records. The proper or legal way is to write a resolution ratifying this past action. This is how thousands of business do it every day. Remember, if it is not in the Minute Book, it could be said, "it never happened." See SAMPLES for materials we have written to help you address this problem.

An organizational meeting.

What is the "organizational meeting?" I describe this meeting as the "Birthing process" of the corporation. I have had many occasions to sit with pastors and say something like, "You thought this corporation was formed in 1989, but it does not yet legally exist. What you have here is a 19 year ‘Pregnancy,’ a legal entity just waiting to be ‘birthed.’" The record by the way, from our experience, is a church that started 23 years earlier, but never had this important meeting.

In a one year period of time, where we had the privilege of ministering to pastors and leaders in 85 churches, we discovered that an astounding 80% of those churches had never had an "Organizational Meeting," with appropriate Corporate Minutes. The corporation that has never had an organizational meeting, has not yet been "birthed." It is not yet a legal entity. We have long ago discovered that most church leaders have only a vague [if any] understanding, of why the church chose to incorporate.

The significance of this very important meeting cannot be overstated, as this would be the first of your documents the Judge would review in the event of a lawsuit. If there were no such minute, the Judge would determine the corporation to be invalid, and the people and leaders "uncovered". Without a valid corporation not only the assets of the church, and any insurance monies would be subject to loss, but the personal assets of everyone in leadership is at risk. And if "Punitive damages" were awarded, this would be a serious financial burden over your head until you either paid it in full, you die, or Jesus comes.

What? You say you have no minutes of an organizational meeting? You are part of the 80% crowd I mentioned above.  This is a serious omission, but can be made whole. To see just how easily this can be rectified, see our Samples – Addendum.

If this discourse is of interest to you, please be sure to take a look at our SAMPLES Manual, where we have published 70 sample Church Policies and Minutes of Board Meetings, and our  Samples – Addendum Manual where we have addressed not only the Ratification issues, but have several Sample Multi-Page Minutes showing how to change the church name, change the church corporation to a para-church entity – and visa versa; and even how to set up a Bible School under the church.  An Included CD-Rom allows you to do it all so easily.

And - If you would like more information about similar issues, please consider "The Church Administration 'How To' Manual" This Manual, endorsed by three CPA's, an EA and two attorneys, was updated in June 2007, for the 8th time, since its original publication in 1991