Cs01 - Starting a Business at Church

8/2/2019 Cs01 - Starting a Business at Church

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ChurchSaty.com is a oli saty sric or Amricas churchs ad rlatd miistris. It is co-sposord by Christiaity Today Itratioalad Brothrhood Mutual Isurac Compay. 2008 Brothrhood Mutual Isurac Compay ad/or Christiaity Today Itratioal.

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SIMPLE | SMART | STEP-BY-STEP

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Launching a Business at Church

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Starting a Business at Church

Wh B ad Chch Do Mx 2

OvervieW | A outrach opportuity thatdmads atttio to dtail.by Matt Branaugh

Bfo Yo Op Yo Doo 3

AssessMent | A chcklist to us as youlauch a busiss.by Matt Branaugh

Wh My Bcom B 5

HOW tO | How to kow wh a w bookstoror childcar ctr will attract IRS atttio.by John R. Throop

Bd iac 8

HOW tO | A busiss bris a church out-rach opportuitisad icrasd xposurto liabilitis.by Matt Branaugh

safy F 11

HOW tO | What OSHA mas or busisssat churchs.by Stephen Chawaga

empoy & Zo 18

tHe legAl siDe | Addi a busiss caimpact a churchs mploymt policis adzoi.by James F. Cobble Jr. and Richard R. Hammar

roc C 24

leADers guiDe | Quick tips ad rcom-mdd rsourcs.

p-by-pPractical strategies to protect your ministry


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| Wh Busiss ad Church Do Mix

OveRvIeW

When Business and Church Do MixA oach oppoy ha dmad ao o da.

Suppose one o you wants to build a tower. Will he not frst sit down and estimate the costto see i he has enough money to complete it? For i he lays the oundation and is not able to

fnish it, everyone who sees it will ridicule him, saying, Tis ellow began to build and wasnot able to fnish. Luke 14:2830

On the surace, the thought o launching a business at church seems contradictory.Businesses are built to sell goods and services at a prot. Churches are built tobring souls to Christ and develop ellowship and discipleship among Christ-ollowers. And yet, as American lie in the 21st century unolds, it seems churches

increasingly contemplate the launch o a business as a way to better serve itsattenders and reach out to a culture saturated with commercialism.

Its little surprise. Business not only is the language o American lie, it has becomethe way o building community in an independence-driven culture. Many peopleare drawn to the doors o Starbucks or Barnes and Noble in search o connection,a sense o sophistication, and the simple, amiliar settings that breed comortthearoma o reshly ground coee beans, the plush chairs that invite one to sit orhours and read, and the buzz that comes rom human interaction.

For some churches, they see this and hope to replicate that magnetic pull. Whylet businesses draw people in on a promise o community, only to predicate

that community on how much they spend? Why not bring people that sameexperience, but in the church setting, where authentic community can develop?

As any entrepreneur or startup executive will tell you, launching a business isnteasy. Tis download is designed to help make it easier, covering all o the anglesyou should address or most any type o business. Tis resource oers specicinormation on the legal, insurance, and tax implications a business poses to achurch. Specialty businesses, such as a daycare or credit union, merit urtherresearch, given their unique legal and nancial structures.

We pray your decision to launch a business blesses your congregation and becomes

a successul outreach opportunity. Most importantly, we pray it urther advancesyour work in serving the Lord.

Matt BranaughContributing EditorYour Church [email protected]


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| Bor You Op Your Doors

ASSeSSMenT

Before You Open Your DoorsA chck o a yo ach a b.

by Matt Branaugh

A man who has riches without understanding is like the beasts that perish. Psalm 49:20

We prayerully considered the business we want to open.

We involved key decision makers rom the church sta and congregation to determinethe specic purposes o the business, and the expectations and duties o those who willbe involved with its launch.

We consulted with the churchs legal counsel, or a local attorney, to determine whatorms or lings we should make with the secretary o states oce.

We consulted with the churchs legal counsel, or a local attorney, to review any laws orordinances that may pertain to our specic business, such as regulations tied to publichealth and ood saety, copyright laws, or daycare licensing.

We consulted with the churchs insurer and an attorney to determine what changes toour insurance coverage will be necessary or the business, whether its located on thechurchs property or elsewhere.

We wrote a business plan to help guide our eorts now and in the uture, and to ensurethat the business meets our ministry objectives and expectations.

We explored the design o the business space to ensure it helps provide the rightenvironment or people to eel comortable and to experience a sense o community.

We consulted with a tax proessional and reviewed the Internal Revenue Servicesguidelines regarding related and unrelated business income to determine what, iany, tax liability it may incur as a business and/or or the church.

We consulted with the churchs legal counsel, or a local attorney, and reviewed thezoning or the property where the business will operate to ensure our proposed usemeets specications.

We decided what personneleither paid or volunteerthe business will require, andestablished a plan o action or screening and selecting people.


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We consulted with the churchs legal counsel, or a local attorney, and reviewed whatemployment laws apply to the business in terms o hiring and ring.

We reviewed the Occupational Saety and Health Act, or OSHA, to determine what weneed to produce a sae, working environment or the business, its employees and/orvolunteers, and its customers.

| Bor You Op Your Doors


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| Wh Miistry Bcoms Busiss

HOW TO

When Ministry Becomes BusinessHow o kow wh a w booko o chdca c w

aac irs ao.

by John R. Throop

Show me a denarius. Whose portrait and inscription are on it? Caesars, they replied.He said to them, Ten give to Caesar what is Caesars, and to God what is Gods. (Luke20:2425).

Churches and religious organizations start revenue-generating operations or two

reasons. For some, the activity starts as a ministry and is intended to remain that,but the ministry generates some nonvital cash ow. For others, cash ow is criticalto the success o the ministry.

Te dierence between the two types o cash ow is critical to the InternalRevenue Service. Te IRS has been paying closer attention to the businessoperations o tax-exempt organizations to determine whether each activity isan extension o the mission o the organization or a reestanding business withincome that should be taxed.

Te IRS allows nonrelated business income. But incomeas distinct rom

donationsis taxable i it stems rom an activity not substantially related tothe organizations activities and income. What does that mean? According to IRSregulations, substantially related means the trade or business must contributeimportantly to the accomplishment o the exempt purpose o an organization.

Te IRS applies three standards when considering whether the activities o tax-exempt organizations are taxable. Income is presumed to be exempt rom taxesunless the activity

1. Is not substantially related to the organizations exempt purpose or unction,

2. Is a trade or business, and/or

3. Is regularly carried on.

In addition, the income must amount to at least $1,000 in a scal year. An exemptorganization that has $1,000 or more or gross income rom an unrelated business


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must le Form 990-. See Unrelated Business Income ax Returns and the Form990- instructions or more inormation about return ling at www.irs.o.

So how should churches proceed? Here are some examples worth considering:

Bookstore ministry. o provide members with helpul books and study guides,church members open a small bookstore inside the acility. Te bookstore isopen on Sundays and a ew hours during the week while church activities takeplace. Even though materials are sold at a prot, the income is not taxablebecause the activity supports the churchs educational mission and operatesprimarily or the convenience o its members.

Bookstore business. A church bookstore becomes so popular that it begins to

stock a variety o books, cards, and gifs and establishes regular hours or thepublic. It also moves to a location within the building that has an outside entrance.Its a stretch to say that the churchs mission includes providing a retail outlet orChristian books and gifs. Reasonable observers will deem this a business.

Newsletter with ads. A church publishes a regular newspaper that is sent topeoples homes as an evangelistic tool. o pay or printing and mailing costs,the church sells advertising. Eventually it realizes a prot rom ad sales. Tenewspaper may be part o the churchs evangelistic mission, but sponsorshipincome, or ad sales, could be taxed. Te local newspaper, which competes orthe same advertising dollars and pays taxes on that income, may complain.

No-go parking lot. A downtown church has an empty parking lot during theweek, while nearby parking garages are ull. A business-minded trustee sees anidle assetparking spaces that could be leased on a monthly basis. Whats more,this income is passiveno one has to work to obtain it. Te income is taxablebecause the churchs mission does not include leasing space.

sp o Hp Aod a Ad

o help avoid an IRS audit, church leaders need to take our steps:

1. Clarify your mission. A mission statement answers the question What kind

o business are you in? It provides a reerence or board and sta members todecide whether a particular activity or ministry is consistent with the churchsmission.

http://www.irs.gov/http://www.irs.gov/


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2. Separate ministry from business. While there is no denitive rule about whena church should consider separately incorporating a ministry that becomes abusiness unit, many churches nd that an activity becomes a business whenits liability risk becomes signicant, and/or when the church board discoversthat this operation is gobbling up the time o sta members. I a nonministryoperation contributes 50 percent to 80 percent o the churchs income, it couldraise red ags or the IRS.

Note: Its possible to orm a subsidiary corporation that puts its prots back intothe business and into the church.

3. Take care in property use. Churches are most vulnerable on this point. Be verycareul when considering rental income to help nance a construction project.Make sure building plans move ahead without undue delay. I your churchreceives land as a gif, liquidate it unless a ministry, like a church camp, will bedeveloped on the property within ten years.

4. Retain a skilled attorney. Any larger church must have someone acting asgeneral counsel who is amiliar with the activities o the church, says attorneyChip Watkins. I a church plans to undertake a nontraditional revenue-producing activity, church leaders should rst come to grips with the business

vs. ministry issue. Tere ofen is a way to structure the churchs activity orexempt purposes without generating income as a trade or business, Watkinssays. Afer all, its wiser or churches to ocus on the business o makingdisciples rather than making a prot.

This articl was adaptd rom Wh Your Miistry Bcoms Taxabl, which rst appard iYour Church maazi, Ja/Fb 2000.

thoh Pook

Ha w dlopd a clar missio or our busiss? How dos it rlat toth churchs orall missio, rardlss o whthr its statd or ustatd?

What acial cotrols ar i plac to moitor th sals o th busiss adhow sals may impact th orms w l with th Itral Ru Sric?

What othr stps should w tak to hlp moitor what tim, ry, adrsourcs o th church ad its sta ar oi ito th opratio o th busiss?



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HOW TO

Blessed InsuranceA b b a chch oach oppoad cad

xpo o ab.

by Matt Branaugh

I am sending you out like sheep among wolves. Tereore be as shrewd as snakes and asinnocent as doves (Matthew 10:16).

Its the type o story that exemplies the power o the local churcha Houstoncongregation, looking to inject lie into the surrounding neighborhoods economy,

provide jobs or teens, and a welcome meeting place or members, partnered witha parishioner to purchase a McDonalds ranchise adjacent to its property.

At rst glance, the deal possessed all the right motives. But it also thrust the churchinto the operation o a ast-ood restaurant open or business to the public, staedwith people who handled thousands o hamburgers, chicken nuggets and shakes,all while presumably generating thousands o dollars in daily sales.

None o that is necessarily badit is precisely why the church bought theMcDonalds in the rst place. But looking at the entire picture, it is also a

vivid illustration o the increased liabilities churches ace when they venture

into commercial enterprise, says John Hein, associate corporate counsel orBrotherhood Mutual Insurance Company, one o the nations largest churchinsurers.

It was a clever idea, Hein says. I applaud such outreach eorts, i the rightprecautions are taken.

In the world o insurance, those precautions involve an in-depth assessment o thechurchs existing coverage; an in-depth look at the added liabilities the businessand church will be exposed to; and the added coverage a church will need toprotect itsel and its congregation should an accident or lawsuit ever occur.

And such an assessment always should be made, regardless o whether its a tinybookstore inside the churchs doors, or a highly visible coee shop on a busy streetcorner, church insurers say.

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sa Po

What extra coverage may be needed depends on several actors, including howclosely aligned the business is to the ministrys mission, where the businessoperates, and whether the business is marketed to the general public.

Churches should rst consult with their insurer to help understand currentcoverage, and how a business will change potential liabilities. Consultation with anattorney also can help sort out any state or local lawsincluding ood and healthsaety ordinances and zoning regulationsthat might aect what churches do,Hein says.

Te new operation may aect the insurability o the risk or it may dramaticallyimpact the premium charged, which the insured will certainly want to reviewbeore making a nal decision, says Steve Renner, commercial underwritingmanager at GuideOne Insurance, another o the nations largest churchinsurers. Also, i the insurer nds the activity acceptable, it may have somerecommendations on how to better manage the risk in an eort to lower the losspotential.

Poc

Every church already should own a basic liability policy, the type that covers,

among other things, slips and trips, the random illness rom a potato salad gonebad at the summer picnic, or the injury to a teen attending a youth group activity.In cases where the business will operate inside the church primarily or the use oattenders, a church insurer may be able to cover the exposure without any policychanges. Tats because the business likely acts as a service or eature includedamong the many the church oers to those who attend a worship service, meeting,or activity.

A basic liability policy will typically provide coverage or these operations as longas they are controlled and operated by the named insured and divulged to theinsurance carrier so that they can underwrite the operation/hazards presented and

charge the appropriate premium, Renner says.

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As the size o the business increases, though, a church can less reasonably assumethat it acts only as a part o the overall mission, both Hein and Renner say.At that point, the operation more likely has:

Paid sta involved

Sales generating notable income or the church, making the businessa prot center

Marketing to the public

A stand-alone location.

(Te business) gets less and less incidental and more and more becomes a

separate business, Hein says.

Once one or more o these actors become true or a church business, theunderwriter will have to judge the situation and how it relates to the existingliability policy; i its clear the enterprise ventures beyond the scope o the existingcoverage, then the underwriter and insurance carrier will determine their risk-tolerance or providing separate coverage, Renner says.

Wha Yo typ

Te type o business also signicantly aects how church insurers look at thebusiness. Bookstores, coee shops, and daycares can more easily be tied to a

churchs overall mission, but a construction service or credit union possessesunique risks that most likely require separate coverage, Hein says. Even thebookstores, coee shops, and daycares can grow beyond their original purpose,and thats why clear, detailed communication with the insurer is essential rom thebeginning.

thoh Pook

What do w hop to accomplish by icludi a busiss trpris i ourmiistry?

What ar som xampls o miistris that ha b succssul atlauchi a busiss to urthr miistry oals?

What ha w lard rom our isurac compay about th liabilitisassociatd with starti a busiss i our church or as part o our miistryoutrach?

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| Saty First

HOW TO

Safety FirstWha OsHA ma fo b a chch .

by Stephen Chawaga

For the waywardness o the simple will kill them, and the complacency o ools will destroythem; but whoever listens to me will live in saety and be at ease, without ear o harm(Proverbs 1:3233).

Te U.S. governments Occupational Saety and Health Act, which sets thestandards or employee saety, are broad enough to cover almost any employer,

including churches in certain circumstances. OSHA applies to any business thataects interstate commerce. I a church ventures beyond purely spiritual pursuits,it may subject itsel to OSHA requirements. Schools and daycare centers are clearlybusinesses, or example, and are engaged in interstate commerce because theirbooks, supplies, and equipment can come rom various parts o the country.

Churches that run an educational institution must ensure that the employeesare not subjected to saety hazards and that their activities comply with OSHAstandards. People who work in the churchs bookstore would be entitled to similarprotection.

voay Compac

Even though OSHA applies only to certain church activities, all churches wouldbe advised to review its guidelines and voluntarily comply with them. Te U.S.Department o Labor recommends that employers adopt a three-part plan toimprove occupational saety and health:

1. Management and their employees must commit to protecting workers;

2. Work sites should be analyzed to identiy dangerous situations. Danger shouldbe prevented by redesigning a job or the site, or by controlling hazards;

3. Regular training in saety and health must be incorporated into regularjob practices. Tese general principles can be readily adapted to a churchenvironment:

Te pastor and property committee must commit to a programo increased saety and develop enthusiasm or the eort through


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communication with the congregation.

Church leaders should regularly inspect the church grounds and buildings,identiying hazards and items that need xing.

Te sta can be trained to look or potential problems and report them tothe property committee as soon as possible.

F safy

Several OSHA standards regarding re prevention deserve attention romchurch leaders:

Each workplace should have exits that are located a certain distance apart rom

one another and are never blocked.

Buildings must be stocked with re extinguishers in good working order andthat employees be trained to use them;

Employers must have a written plan to acilitate escape in case o re and thatall employees be trained what to do in an emergency.

Employers must create and ollow a re-prevention plan that includes, amongother things, procedures or disposing o ammable materials and controllingsources o combustion.

Oh OsHA r

Walking-working surfaces: OSHA mandates that every stairway oor openinghave a railing and that every pit and trapdoor oor opening have a cover ostandard strength and construction. Passageways and storerooms should bekept clean and orderly, and oors should be neat and dry.

Ladders: Ladders must be in good condition and placed so that the rails havesecure ooting.

Means of exit: Exits, along with aisles and passageways leading to them, need tobe situated so they are readily accessible. Exit doors should be side-hinged and

easily recognizable, and should never include locks.

| Saty First


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| Saty First

Protective equipment: Employers must provide personal protective equipmentor the eyes, ace, head, and extremities, including protective shields andbarriers. OSHA ocuses particularly on eye protection, requiring that devicesprotect against side hazards and that they t over prescription lenses. Anemployer must survey work areas to determine whether such equipment isrequired.

First aid: I a medical acility is not located near the workplace, an employershould make sure that one employee is trained in rst aid and that adequatesupplies are available.

Lawn mowers: OSHA requires all mowers (walk-behind and riding) to havean enclosed blade and to carry a warning that the motor should not be used

without a catcher assembly or guard. A caution label is required at eachdischarge opening.

You can obtain more inormation by writing to the Department o LaborsOccupational Saety & Health Administration or by visiting http://www.osha.o.

This articl was adaptd rom Saty First, which rst appard i Your Church maazi,March/April 1999.

thoh Pook

Dos our church proid uidlis or saty that comply with OSHA? I ot,how ca w stablish a pla that surs our busiss will?

What will compliac ma to us, i trms o addd costs?

Is thr o prso, ithr o th sta or th olutr tam, who aturallyts th rol o orsi saty uidlis ad compliac ad could ladthis or us?
http://www.osha.gov/http://www.osha.gov/


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| Commuity, Corsatio, ad Coctio

FOR PASTORS

Community, Conversation, and ConnectionHow chch ca a a c o fo aohp fama .

by Cornerstone Knowledge Networks

I am not ashamed o the gospel, because it is the power o God or the salvation o everyonewho believes: frst or the Jew, then or the Gentile (Romans 1:16 ).

A Pobm of Pac

In 1989, Dr. Ray Oldenburg introduced a concept called the third place in his

bookTe Great Good Place. Te book discusses the great public gathering placesthroughout cities and civilizations. Oldenburg suggests that the rst two places ina persons lie are home and work. He observes that the great cities and civilizationshave always had third places where people go or inormal community,conversation, and connection. Oldenburg uses the examples o the neighborhoodbistros in France, the bier gardens in Germany, the piazzas in Italy, and theEnglish pubs as inormal public spaces that play a critical role in culture and theindividuals who requent them.

In America, Oldenburg observes that we have ... a problem o place. He says, Teautomobile suburb had the eect o ragmenting the individuals world. As one

observer wrote, A man works in one place, sleeps in another, shops somewhereelse, nds pleasure or companionship where he can, and cares about none o theseplaces.

Randy Frazee, senior pastor o Pantego Bible Church in Fort Worth, exas,says, We discovered the power and need or the Tird Place backwards. Wecommitted to the mega-church-100-acre-campus-on-the-reeway-strategy, onlyto discover that we were contributing to the problem. Our mega church was justone more contrived place that ractured peoples lives. We had a ministry modelor geographic structure to promote connection and authentic community withinresidential neighborhoods, but built the mega structure that become just one more

commute.

... Once you see (the Tird Place), it changes everything. Te power andmomentum is organic, not contrived. We need to stop trying to manuacture


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community within a church, and instead go do church in the community.In my opinion, the ideal church structure o the uture will be churches withmany locations o multi-purpose/ community center buildings in the middle oneighborhoods.

Pop W Bo Bfo thy B

Frazees vision or the uture is exactly what Community Christian Church inNaperville, Illinois, has been doing. Community Christian consists o severallocations, including a community center it built in partnership with a developer.Te center is located in the middle o a multiamily residential community thatacts as a hub o activity or the neighborhood.

Our south campus in Highpoint was our version 1.0 o a Tird Place where achurch meets on Sunday, Ferguson says. Our goal was to connect within thecommunity. We went through a strategic shif in our thinking when we discoveredthat most people will belong beore they believe. Community Christians buildingat the Highpoint development in Romeoville, Illinois, is a community center withliving-room settings around replaces, a learning center or afer-school tutoring,a coee shop, gym, tness center, and mailboxes or the residential community.

One illustration o the buildings impact, Ferguson says: One Sunday morning, aresident showed up in his gym clothes with a basketball, only to nd the room setup or a meeting, rather than open gym. Te guy decided to see what was going

on, so he sat in the back row, put his basketball under his chair and stayed or thechurch service. During the service, there was a discussion about getting to knowpeople in your neighborhood by joining a small group, and the man signed up.He started attending the small group and brought his brother. A ew months later,they both became Christ ollowers.

Tis is a perect example o how the Tird Place helps us ulll our mission,which ishelp people nd their way back to God, Ferguson says.

Community Christians location in Naperville is its version 2.0 o a TirdPlacewhere a church also happens to meet. Tis site is a yellow, multi-purposebuilding on 7 acres in a residential community. It acts as a commuter lot or publictransportation, eatures a ca and coee bar open 16 hours a day, a gym, a cyberca with a wireless internet network and a ew hard-wired terminals, and an afer-school music and arts program.


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Neighbors allow their children to gather at the church afer school. It has becomea place where they hangout. Tey love it and call it the YCTe Yellow Church,Ferguson says.

Ca a Pac

Certainly the Starbucks type coee bar or Barnes and Noble style coee barand bookstore combination has been a growing trend in new church spaces orsome time.

However, a ew churches are taking the strategic step to create those types oenvironments in public places to connect and serve their communities. JoshuasCrossing Church in Fort Collins, Colorado, or instance, created a not-or-prot

coee shop in downtown Fort Collins. Te coee shop started when the churchleased the location, but decided it needed to be used during the week to servethe community. So Everyday Joes coee shop was ormed. In an interview withColoradoan Magazine, church board member Daryl Dickens says, We make aneort not to be a Christian coee shop. We just want to be a good coee shopwhere believers and nonbelievers are comortable.

Te popularity and impact o a Tird Place is directly related to the human needand desire or community. People need inormal public meeting places in theirlives where they can meet, set aside concerns o their home and work and talk,Oldenburg says.

Without such places, the urban area ails to nourish the kinds o relationships anddiversity o human contact that are the essence o the city, he says. Deprived othese settings, people remain lonely within the crowds.

th F

What will churches look like in 10 to 20 years? Some Christian uturists believethat the younger generations will have no use or the 3,000- to 5,000-seat worshipcenters the baby boomers are building today. Many churches believe the uture isour past: Going back to our residential communities, but with a new twistas apublic space.

So maybe churches o the uture will be many sites instead o one. And maybethey will look more like coee shops, bookstores, and other places where we nd


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community, conversation, and connection. A place people will visit afer work tosee whats happening and ultimately nd a relationship with our Heavenly Father.

excrptd rom th articl, Commuity, Corsatio ad Coctio, which rst appard atCorrsto Kowld ntworks wbsit, www.thck.com, i 2007. Usd with prmissio.All rihts rsrd.

thoh Pook

As w cotmplat a busiss or our miistry, what oals or objctis dow sk to accomplish?

Dos th cocpt o a Third Plac t ito our isio? Why or why ot? Will this busiss bst t withi our church buildi, or will it t bttr som

plac ls i th commuity?
http://www.theckn.com/http://www.theckn.com/


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THe LegAL SIDe

People and PlacesAdd a b ca mpac a chch mpoym poc ad zo.

by James F. Cobble, Jr. and Richard R. Hammar

wo are better than one, because they have a good return or their work: I one alls down,his riend can help him up. But pity the man who alls and has no one to help him up!(Ecclesiastes 4:910).

A vision to launch a business at a church will generate energy in anticipation ostrengthening the churchs community, perhaps even its nancial health. More

importantly, the business may provide a needed bridge to connect with thesurrounding community, providing an evangelistic opportunity.

But launching a business likely poses less obvious implications or a church.A business likely will need employees or volunteers, requiring screening andselection processes, and adherence to ederal and state hiring laws. An enterprisealso may shif the church propertys use in a way that diers rom how a localmunicipality zones it.

Below is a compilation of key points and examples from several sources that a church

should keep in mind as it anticipates the launch of a business. Use this information to

further investigate local, state, and federal laws and to prepare accordingly:

Zo law

Local zoning laws generally allow churches in residential areas. Te courts havestruggled with applying this term to various activities and organizations other thantraditional congregations meeting in a building or regular worship services.

Many other courts have been asked to decide whether a particular use o propertycomes within the denition o a church under municipal zoning laws. Teollowing activities and uses have been held to come within that denition:

Use o a home across the street rom a church or womens ellowship meetingsand religious education classes

A single-amily residence used by the United Presbyterian Church as a religiouscoeehouse or university students

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A priests home, convent, and parochial school

A kindergarten, play area, and parochial school

A private school operated by a Baptist church

Other courts have concluded that certain uses o property do not constitute a churchin the context o zoning laws. o illustrate, one court has held that an area restrictedto residential and church uses could not accommodate temporary, open-air campmeetings. Te court observed that not every place in which religious servicesare conducted is a church. It inerred that a church at the least must consist o abuilding set apart or public worship, and thus could not include camp meetings.

Other courts have held that the ollowing activities were not churches or purposes

o zoning laws:

A private school operated by a local Baptist church

A religious school not operated or controlled by a church

A child-care center operated in a ministers residence

Example: A Connecticut court ruled that a convent and chapel constituted achurch or purposes o zoning law despite the operation o a bookstore andaudiovisual center on the premises. Te court concluded that the convent andchapel, by themselves, clearly satised the denition o a church. Te act that

a bookstore and audiovisual center were also operated on the premises didnot aect this conclusion, since the books and materials were religious andeduca- tional in nature and were sold to support the orders missionary andinstructional purposes.

Te court quoted rom a 1943 decision o the United States Supreme Court:Te mere act that religious literature is sold rather than donated doesnot transorm evangelism into a commercial enterprise. Further, the courtconcluded that the denition o church must be regarded broadly or zoningpurposes in order to avoid serious constitutional questions. Te court rejectedthe claim that the convent and chapel should not be allowed in a residential

neighborhood since they would be a detriment to the neighborhood byincreasing trac congestion.

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Te court observed that the intersection where the order planned to constructthe convent and chapel carried a daily trac volume o over 18,000 cars, andthat the construction o the convent and chapel would draw approximatelytwenty [additional] cars per day. Tis case will be o interest to the manychurches that operate bookstores on their premises.

Local zoning laws generally allow churches in residential areas. Te courtsgenerally have extended this term to various accessory uses that are needed or achurch to carry out its mission and purposes.

Many zoning laws permit uses that are accessory to a permitted use. One courtupheld a churchs right to construct a recreational complex on property adjacent toits sanctuary. Other courts have ound that the ollowing uses were accessory to a

permitted church use and thereore were appropriate in a residential district:

A church activities building and playground

A parking lot

A school

And a center or perorming arts

Not every use o church property, however, will be so approved. Te ollowinguses o church property have been disallowed on the ground that they were not

accessory to permitted church use: Parking o a church bus on church property

A 301-oot radio transmission tower that was more than 10 times higher thanneighboring residences

A school.

Example: Te Missouri Supreme Court ruled that a church-run child carecenter is a permissible activity on church property zoned exclusively or churchor residential purposes. Te court acknowledged that the zoning ordinancedid not allow child care acilities in the neighborhood in which the church waslocated, but it concluded that such an activity was a permissible accessory use.


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empoy ad vo

Churches and church leaders can ace legal liability or the negligent selectiono ministers, church employees, and volunteer workers. For the purposes olaunching a business at a church, its important to understand what impact thebusiness will have on the church, in terms o the addition o employees and thechurchs involvement in interstate commerce, as well as the selection o volunteers.

A nding o negligent selection dramatically impacts the lie o a church and itsleaders:

1. Te trauma to victims o sexual misconduct.

2. Te emotional and spiritual impact on the congregation.

3. Te negative news coverage.

4. Te stress o litigation and the investigative process.

5. Te nancial cost.

6. Te personal impact on church leaders.

Churches that launch businesses should use application and interview processesor employees and volunteers, as well as contact reerences and perormbackground checks, especially in situations where individuals contact children.Churches also should try to involve more than one person in hiring decisions,even i the startup only has one person overseeing its initial development. Teuse o written job descriptions and introductory periods also can help employees,

volunteers, and the business clearly understand roles and expectations.

o learn more about selecting and screening employees and workers, and to ndsample applications and other hiring orms, see Slcti ad Scri ChurchWorkrs. Visit www.YourChurchRsourcs.com or ordering inormation.

empoym law

itle VII o the Civil Rights Act o 1964 bars certain employers rom

discriminating in employment decisions on the basis o any o the ollowingactors:

Race
http://store.churchlawtodaystore.com/seandscchwo.htmlhttp://store.churchlawtodaystore.com/seandscchwo.htmlhttp://www.yourchurchresources.com/http://www.yourchurchresources.com/http://store.churchlawtodaystore.com/seandscchwo.htmlhttp://store.churchlawtodaystore.com/seandscchwo.html


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Color

National origin

Sex

Pregnancy

Religion

Only those employers that are engaged in an activity aecting interstatecommerce and having at least 15 employees are subject to this law. Most churcheshave ewer than 15 employees and so they are not covered. Churches with 15or more employees are covered only i they are engaged in an activity aecting

interstate commerce. In general, whether or not a church meets this requirementwill depend upon the requency and nature o its interstate transactions.

For instance, a church that sells several tapes o its weekly services to personalsliving in other states almost certainly is engaged in interstate commerce. Buta church that doesnt sell any products across state lines, isnt engaged in anycommercial or broadcasting activities, and makes ew i any out-o-state purchasesprobably is not engaged in interstate commerce and wouldnt be subject to itleVII.

itle VII only protects employees. It has no application to uncompensated

volunteers.While churches that are covered by itle VII are exempted rom the ban onreligious discrimination in their employment decisions, they are not exemptedrom the ban on discrimination based on race, color, national origin, or sex.

Example: A church needs a new associate pastor and a new custodian. It ispermitted to consider only persons who are members o its aith.

Other acts to note:

Age Discrimination in Employment Act: Activity aecting interstatecommerce and at least 20 employees.

Americans with Disabilities Act: Activity aecting interstate commerce and atleast 15 employees.

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Family Medical Leave Act: Activity aecting state commerce and at least 50employees.

Uniormed Services Employment and Reemployment Rights Act o 1994

Immigration Reorm and Control Act

Fair Labor Standards Act

Older Workers Benet Protection Act o 1991

Caution: Church leaders are advised to seek the advice o a local attorneyregarding the application o state and local employment and civil rights laws toministers and lay employees.

This was adaptd rom Slcti ad Scri Church Workrs, by Jams F. Cobbl, Jr., adRichard R. Hammar, 2005.

thoh Pook

How is our churchs proprty currtly zod? What implicatios, i ay,miht a busiss pos to that zoi?

Is our church ad i ay itrstat commrc? Will this busiss? Howdos that ifuc what laws may or may ot apply to us?

Basd o iitial ad lo-trm projctios, how may popl do waticipat hiri?

What procsss ar i plac to ctily scr ad hir thos popl?


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LeADeRS gUIDe

Resource CenterQck p ad commdd oc.

Now devote your heart and soul to seeking the Lord your God. Begin to build the sanctuaryo the Lord God, so that you may bring the ark o the covenant o the Lord and the sacredarticles belonging to God into the temple that will be built or the Name o the Lord(1 Chronicles 22:19).

tp fo u Ac

Consider these options or the use o articles and inormation in this download:

Pass the Beore You Open Your Doors assessment around at your next boardmeeting and have a 15-minute discussion.

Afer reading through an article, choose questions to pose at a scheduledmeeting and discuss them together.

Brainstorm potential business opportunities that could enhance yourministry goals.

Using the Bible verses ound at the beginning o the articles, lead a devotionaldiscussion at a sta meeting on the topic o using commercial means to urther

ministry purposes. Using the Tought Provoker questions, lead a discussion or church leaders.

Recommended Resources

Wb roc

ChurchLawToday.com

ChurchLawTodayStor.com

Business Plan:http://www.myowbusiss.or/pla_chcklist.html

op 10 Dos and Donts:: http://www.myowbusiss.or/busiss_top_t.html

Resources list: http://www.myowbusiss.or/rsourcs_list.html

Small Busiss Admiistratio

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http://churchlawtoday.com/http://churchlawtodaystore.com/http://%20http//www.myownbusiness.org/plan_checklist.htmlhttp://%20http//www.myownbusiness.org/plan_checklist.htmlhttp://www.myownbusiness.org/business_top_ten.htmlhttp://www.myownbusiness.org/business_top_ten.htmlhttp://www.myownbusiness.org/resources_list.htmlhttp://www.myownbusiness.org/resources_list.htmlhttp://www.myownbusiness.org/resources_list.htmlhttp://www.myownbusiness.org/business_top_ten.htmlhttp://%20http//www.myownbusiness.org/plan_checklist.htmlhttp://churchlawtodaystore.com/http://churchlawtoday.com/


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www.irs.o

BrothrhoodMutual.com. Brotherhood Mutual Insurance company is one o the leadinginsurers o churches and related ministries. Its website oers a wealth o ree resources or

keeping ministries sae.

Book, K, ad Oh roc

2008 Church & Clry Tax guid: Get a better understanding o U.S. tax laws as theyrelate to pastors and churches.

Church Law Spcial Rports: Quick and easy updates on the critical issues thatcontinually concern the church.

Ispctio ad Saty Chcklists: 12 modules or assessing and improving acilities,and saeguarding activities.

Risk Maamt Hadbook or Churchs ad Schools by James F. Cobble, Jr., andRichard R. Hammar.

Pastor, Church & Law by Richard Hammar. Te most comprehensive and practicallegal reerence book ever published or churches and clergy.

Slcti ad Scri Church Workrs

Ulss othrwis idicatd, Scriptur tak rom th HOLY BIBLe, neW InTeRnATIOnAL

veRSIOn. Copyriht 1973, 1978, 1984 by Itratioal Bibl Socity. Usd by prmissio oZodra Publishi Hous. All rihts rsrd.

This publicatio is dsid to proid accurat ad authoritati iormatio i rard to thsubjct mattr cord. It is sold with th udrstadi that th publishr is ot adi rdri lal, accouti, or othr prossioal sric. I lal adic or othr xprtassistac is rquird, th srics o a comptt prossioal prso should b souht. Froma Dclaratio o Pricipls joitly adoptd by a Committ o th Amrica Bar Associatioad a Committ o Publishrs ad Associatios. Copyriht 2008 by Christiaity TodayItratioal. All rihts rsrd.

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Cs01 - Starting a Business at Church

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