A Conversation That Matters: The Urban Church Succession Planning & It’s Financial Obligation

This post is for lead pastors in the urban context. Especially the millennial church planter. I am writing this post as if I am communicating with a lead pastor with a 5 minute window. So, let’s skip the blog foreplay and get right down to business. You must make proper investments that protect the local fellowship and the vision for the city you are planted in. The discussions at your elder round table that concern the next 10-20 year plans must also include financial anticipation attached to them. I am concerned that many of the pastors I meet understand the nature of life being short, but behave in a contrary way. Part of that financial anticipation is truthfully believing that you are not promised tomorrow. Anticipation is a necessary intangible tool in your financial budget and future plans. Now, let me express how to properly use this tool to protect and fortify your operations for existential impact beyond your leadership. In other words, how the local fellowship doors can stay open when you and other members die.

Out of the many questions to be answered, there is one that is begs your immediate attention. “What is your plan to sustain positive cash flow in your local fellowship?” It is with this question that the financial foundation of succession planning should be implemented. Before I go any deeper, please know the importance of having an insurance consultant on your team is important. Very Important. If you disagree, it is ok. I would love to converse after you have paid several funeral bills for the members in your church. I have a few moments left to break down your succession plan strategy.

1. Priority #One: The lead pastor must deal with his household first. He should not only have a trunk tight financial plan, but his legacy along with financial risk management needs to be trunk tight as well. The pastor must have strong (1) Life Insurance (income replacement for his family that ranges in the millions), (2) Individual Disability Insurance (“Own Occupation” income protection against sickness or injury), (3) Critical Illness Insurance (which covers over 30 illnesses with the main five being heart attack, cancer, stroke, major organ transplant, kidney failure. This policy will pay out 100% of the policy benefit to use at your own discretion). If the lead pastor and his family are not covered well, we can rest assure it is not a priority to do the same for the fellowship or people they are pastoring. Therefore, tossing the people in a bad position to successfully help themselves beyond the pulpit message.

2. Priority #Two: Transfer all financial risk to the financial institutions. Understand the power of insurance and use it. You will have to take serious the importance of having a “Key Person Insurance” policy in place. Not only should the lead pastor have this policy, but every elder on staff who is helping to govern, every staff administrator or employee that plays key role must also be on the “Key Person Insurance” policy. Key Person Insurance will supply a huge tax free benefit to the church as a beneficiary by the death of one of the key employees in the fellowship. When the church receives this benefit, it will be tax free. Example: $20,000,000 Key Person policy issues at $20,000,000. I hope that number on a policy didn't scare you. The urban church needs it. This is the best way to leave millions to the local fellowship. Your fellowship should never have to close it’s doors to the community due to the lack of financial resources. Especially if you die. You executed poor leadership and management skills. Put wealth into your vision now. The other beneficiary who should benefit are the families of those who govern the church should as well. I will touch deeply on this in another post. I promise.

3. Priority #Three: Teach Charitable Giving by instituting as many financial seminars and teachings as possible to your congregation. This is the one area where people are failing the most. I know because I sit across the table from them. Rarely, do I see a solid financial plan. Members must be taught on a routine schedule how to give and the importance of giving. If you do not teach it, do not expect your members to give. Instruct and present your congregation on the perspective of charitable giving. For instance, did you know a member can take out a small policy and let the church be the beneficiary to continue the work God is doing for the coming years? Teach members how to be “Missionary Givers”. I will touch more on this in another post. I promise.

Priority #Four: The lead pastor must let the church set his retirement up for his family. This is a vital necessity. The days of preaching 40-50 years without retirement are over. OVER. There are many ways to set retirement up. I will touch on this in another post.

I understand many of you reading this will overlook the importance. I charge you not to get caught unprepared. There are many churches who will close their doors due to lack of succession planning. Do not let that be your story. What a shame it will be. Follow this blueprint.