Cs01 - Starting A Business at Church

step-by-step Launching a Business at Church
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Practical strategies to protect your ministry
Starting a Business at Church

When Business and Church Do Mix
OvervieW | An outreach opportunity that demands attention to detail. by Matt Branaugh
safety First
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HOW tO | What OSHA means for businesses at churches. by Stephen Chawaga
Before You Open Your Doors

AssessMent | A checklist to use as you launch a business. by Matt Branaugh
employees & Zoning
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tHe legAl siDe | Adding a business can impact a churchs employment policies and zoning. by James F. Cobble Jr. and Richard R. Hammar
When Ministry Becomes Business
HOW tO | How to know when a new bookstore or childcare center will attract IRS attention. by John R. Throop
resource Center
leADers guiDe | Quick tips and recommended resources.
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Blessed insurance
HOW tO | A business brings a church outreach opportunitiesand increased exposure to liabilities. by Matt Branaugh
ChurchSafety.com is an online safety service for Americas churches and related ministries. It is co-sponsored by Christianity Today International and Brotherhood Mutual Insurance Company. 2008 Brotherhood Mutual Insurance Company and/or Christianity Today International.
step-by-step Launching a Business at Church | When Business and Church Do Mix
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When Business and Church Do Mix

An outreach opportunity that demands attention to detail.
Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it? For if he lays the foundation and is not able to finish it, everyone who sees it will ridicule him, saying, This fellow began to build and was not able to finish. Luke 14:2830
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On the surface, the thought of launching a business at church seems contradictory. Businesses are built to sell goods and services at a profit. Churches are built to bring souls to Christ and develop fellowship and discipleship among Christfollowers. And yet, as American life in the 21st century unfolds, it seems churches increasingly contemplate the launch of a business as a way to better serve its attenders and reach out to a culture saturated with commercialism. Its little surprise. Business not only is the language of American life, it has become the way of building community in an independence-driven culture. Many people are drawn to the doors of Starbucks or Barnes and Noble in search of connection, a sense of sophistication, and the simple, familiar settings that breed comfortthe aroma of freshly ground coffee beans, the plush chairs that invite one to sit for hours and read, and the buzz that comes from human interaction. For some churches, they see this and hope to replicate that magnetic pull. Why let businesses draw people in on a promise of community, only to predicate that community on how much they spend? Why not bring people that same experience, but in the church setting, where authentic community can develop? As any entrepreneur or startup executive will tell you, launching a business isnt easy. This download is designed to help make it easier, covering all of the angles you should address for most any type of business. This resource offers specific information on the legal, insurance, and tax implications a business poses to a church. Specialty businesses, such as a daycare or credit union, merit further research, given their unique legal and financial structures. We pray your decision to launch a business blesses your congregation and becomes a successful outreach opportunity. Most importantly, we pray it further advances your work in serving the Lord. Matt Branaugh Contributing Editor Your Church Resources SafetyAlert@ChristianityToday.com
step-by-step Launching a Business at Church | Before You Open Your Doors

ASSeSSMenT
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Before You Open Your Doors

A checklist to use as you launch a business.
by Matt Branaugh A man who has riches without understanding is like the beasts that perish. Psalm 49:20 We prayerfully considered the business we want to open. We involved key decision makers from the church staff and congregation to determine the specific purposes of the business, and the expectations and duties of those who will be involved with its launch. We consulted with the churchs legal counsel, or a local attorney, to determine what forms or filings we should make with the secretary of states office. We consulted with the churchs legal counsel, or a local attorney, to review any laws or ordinances that may pertain to our specific business, such as regulations tied to public health and food safety, copyright laws, or daycare licensing. We consulted with the churchs insurer and an attorney to determine what changes to our insurance coverage will be necessary for the business, whether its located on the churchs property or elsewhere. We wrote a business plan to help guide our efforts now and in the future, and to ensure that the business meets our ministry objectives and expectations. We explored the design of the business space to ensure it helps provide the right environment for people to feel comfortable and to experience a sense of community. We consulted with a tax professional and reviewed the Internal Revenue Services guidelines regarding related and unrelated business income to determine what, if any, tax liability it may incur as a business and/or for the church. We consulted with the churchs legal counsel, or a local attorney, and reviewed the zoning for the property where the business will operate to ensure our proposed use meets specifications. We decided what personneleither paid or volunteerthe business will require, and established a plan of action for screening and selecting people.
step-by-step Launching a Business at Church | Before You Open Your Doors
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We consulted with the churchs legal counsel, or a local attorney, and reviewed what employment laws apply to the business in terms of hiring and firing. We reviewed the Occupational Safety and Health Act, or OSHA, to determine what we need to produce a safe, working environment for the business, its employees and/or volunteers, and its customers.
step-by-step Launching a Business at Church | When Ministry Becomes Business

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When Ministry Becomes Business

How to know when a new bookstore or childcare center will attract irs attention.
by John R. Throop Show me a denarius. Whose portrait and inscription are on it? Caesars, they replied. He said to them, Then give to Caesar what is Caesars, and to God what is Gods. (Luke 20:2425).
Churches and religious organizations start revenue-generating operations for two reasons. For some, the activity starts as a ministry and is intended to remain that, but the ministry generates some nonvital cash flow. For others, cash flow is critical to the success of the ministry. The difference between the two types of cash flow is critical to the Internal Revenue Service. The IRS has been paying closer attention to the business operations of tax-exempt organizations to determine whether each activity is an extension of the mission of the organization or a freestanding business with income that should be taxed. The IRS allows nonrelated business income. But incomeas distinct from donationsis taxable if it stems from an activity not substantially related to the organizations activities and income. What does that mean? According to IRS regulations, substantially related means the trade or business must contribute importantly to the accomplishment of the exempt purpose of an organization. The IRS applies three standards when considering whether the activities of taxexempt organizations are taxable. Income is presumed to be exempt from taxes unless the activity 1. Is not substantially related to the organizations exempt purpose or function, 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 fiscal year. An exempt organization that has $1,000 or more or gross income from an unrelated business
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must file Form 990-T. See Unrelated Business Income Tax Returns and the Form 990-T instructions for more information about return filing at www.irs.gov. So how should churches proceed? Here are some examples worth considering: Bookstore ministry. To provide members with helpful books and study guides, church members open a small bookstore inside the facility. The bookstore is open on Sundays and a few hours during the week while church activities take place. Even though materials are sold at a profit, the income is not taxable because the activity supports the churchs educational mission and operates primarily for the convenience of its members. Bookstore business. A church bookstore becomes so popular that it begins to stock a variety of books, cards, and gifts and establishes regular hours for the public. 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 for Christian books and gifts. Reasonable observers will deem this a business. Newsletter with ads. A church publishes a regular newspaper that is sent to peoples homes as an evangelistic tool. To pay for printing and mailing costs, the church sells advertising. Eventually it realizes a profit from ad sales. The newspaper may be part of the churchs evangelistic mission, but sponsorship income, or ad sales, could be taxed. The local newspaper, which competes for the same advertising dollars and pays taxes on that income, may complain. No-go parking lot. A downtown church has an empty parking lot during the week, while nearby parking garages are full. A business-minded trustee sees an idle assetparking spaces that could be leased on a monthly basis. Whats more, this income is passiveno one has to work to obtain it. The income is taxable because the churchs mission does not include leasing space. steps to Help Avoid an Audit To help avoid an IRS audit, church leaders need to take four steps: 1. Clarify your mission. A mission statement answers the question What kind of business are you in? It provides a reference for board and staff members to decide whether a particular activity or ministry is consistent with the churchs mission.
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2. Separate ministry from business. While there is no definitive rule about when a church should consider separately incorporating a ministry that becomes a business unit, many churches find that an activity becomes a business when its liability risk becomes significant, and/or when the church board discovers that this operation is gobbling up the time of staff members. If a nonministry operation contributes 50 percent to 80 percent of the churchs income, it could raise red flags for the IRS. Note: Its possible to form a subsidiary corporation that puts its profits back into the business and into the church. 3. Take care in property use. Churches are most vulnerable on this point. Be very careful when considering rental income to help finance a construction project. Make sure building plans move ahead without undue delay. If your church receives land as a gift, liquidate it unless a ministry, like a church camp, will be developed on the property within ten years. 4. Retain a skilled attorney. Any larger church must have someone acting as general counsel who is familiar with the activities of the church, says attorney Chip Watkins. If a church plans to undertake a nontraditional revenueproducing activity, church leaders should first come to grips with the business vs. ministry issue. There often is a way to structure the churchs activity for exempt purposes without generating income as a trade or business, Watkins says. After all, its wiser for churches to focus on the business of making disciples rather than making a profit.
This article was adapted from When Your Ministry Becomes Taxable, which first appeared in Your Church magazine, Jan/Feb 2000.
thought Provokers Have we developed a clear mission for our business? How does it relate to the churchs overall mission, regardless of whether its stated or unstated? What financial controls are in place to monitor the sales of the business and how sales may impact the forms we file with the Internal Revenue Service? What other steps should we take to help monitor what time, energy, and resources of the church and its staff are going into the operation of the business?
step-by-step Launching a Business at Church | Blessed Insurance

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Blessed Insurance
A business brings a church outreach opportunitiesand increased exposure to liabilities.
by Matt Branaugh I am sending you out like sheep among wolves. Therefore be as shrewd as snakes and as innocent as doves (Matthew 10:16).
Its the type of story that exemplifies the power of the local churcha Houston congregation, looking to inject life into the surrounding neighborhoods economy, provide jobs for teens, and a welcome meeting place for members, partnered with a parishioner to purchase a McDonalds franchise adjacent to its property. At first glance, the deal possessed all the right motives. But it also thrust the church into the operation of a fast-food restaurant open for business to the public, staffed with people who handled thousands of hamburgers, chicken nuggets and shakes, all while presumably generating thousands of dollars in daily sales. None of that is necessarily badit is precisely why the church bought the McDonalds in the first place. But looking at the entire picture, it is also a vivid illustration of the increased liabilities churches face when they venture into commercial enterprise, says John Hein, associate corporate counsel for Brotherhood Mutual Insurance Company, one of the nations largest church insurers. It was a clever idea, Hein says. I applaud such outreach efforts, if the right precautions are taken. In the world of insurance, those precautions involve an in-depth assessment of the churchs existing coverage; an in-depth look at the added liabilities the business and church will be exposed to; and the added coverage a church will need to protect itself and its congregation should an accident or lawsuit ever occur. And such an assessment always should be made, regardless of whether its a tiny bookstore inside the churchs doors, or a highly visible coffee shop on a busy street corner, church insurers say.
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starting Points What extra coverage may be needed depends on several factors, including how closely aligned the business is to the ministrys mission, where the business operates, and whether the business is marketed to the general public. Churches should first consult with their insurer to help understand current coverage, and how a business will change potential liabilities. Consultation with an attorney also can help sort out any state or local lawsincluding food and health safety ordinances and zoning regulationsthat might affect what churches do, Hein says. The new operation may affect the insurability of the risk or it may dramatically impact the premium charged, which the insured will certainly want to review before making a final decision, says Steve Renner, commercial underwriting manager at GuideOne Insurance, another of the nations largest church insurers. Also, if the insurer finds the activity acceptable, it may have some recommendations on how to better manage the risk in an effort to lower the loss potential. Policies Every church already should own a basic liability policy, the type that covers, among other things, slips and trips, the random illness from a potato salad gone bad 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 for the use of attenders, a church insurer may be able to cover the exposure without any policy changes. Thats because the business likely acts as a service or feature included among the many the church offers to those who attend a worship service, meeting, or activity. A basic liability policy will typically provide coverage for these operations as long as they are controlled and operated by the named insured and divulged to the insurance carrier so that they can underwrite the operation/hazards presented and charge the appropriate premium, Renner says.
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As the size of the business increases, though, a church can less reasonably assume that it acts only as a part of the overall mission, both Hein and Renner say. At that point, the operation more likely has: Paid staff involved Sales generating notable income for the church, making the business a profit center Marketing to the public A stand-alone location. (The business) gets less and less incidental and more and more becomes a separate business, Hein says. Once one or more of these factors become true for a church business, the underwriter will have to judge the situation and how it relates to the existing liability policy; if its clear the enterprise ventures beyond the scope of the existing coverage, then the underwriter and insurance carrier will determine their risktolerance for providing separate coverage, Renner says. Whats Your type The type of business also significantly affects how church insurers look at the business. Bookstores, coffee shops, and daycares can more easily be tied to a churchs overall mission, but a construction service or credit union possesses unique risks that most likely require separate coverage, Hein says. Even the bookstores, coffee shops, and daycares can grow beyond their original purpose, and thats why clear, detailed communication with the insurer is essential from the beginning. thought Provokers What do we hope to accomplish by including a business enterprise in our ministry? What are some examples of ministries that have been successful at launching a business to further ministry goals? What have we learned from our insurance company about the liabilities associated with starting a business in our church or as part of our ministry outreach?
step-by-step Launching a Business at Church | Safety First

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Safety First
What OsHA means for businesses at churches .
by Stephen Chawaga For the waywardness of the simple will kill them, and the complacency of fools will destroy them; but whoever listens to me will live in safety and be at ease, without fear of harm (Proverbs 1:3233).
The U.S. governments Occupational Safety and Health Act, which sets the standards for employee safety, are broad enough to cover almost any employer, including churches in certain circumstances. OSHA applies to any business that affects interstate commerce. If a church ventures beyond purely spiritual pursuits, it may subject itself to OSHA requirements. Schools and daycare centers are clearly businesses, for example, and are engaged in interstate commerce because their books, supplies, and equipment can come from various parts of the country. Churches that run an educational institution must ensure that the employees are not subjected to safety hazards and that their activities comply with OSHA standards. People who work in the churchs bookstore would be entitled to similar protection. voluntary Compliance Even though OSHA applies only to certain church activities, all churches would be advised to review its guidelines and voluntarily comply with them. The U.S. Department of Labor recommends that employers adopt a three-part plan to improve occupational safety and health: 1. Management and their employees must commit to protecting workers; 2. Work sites should be analyzed to identify dangerous situations. Danger should be prevented by redesigning a job or the site, or by controlling hazards; 3. Regular training in safety and health must be incorporated into regular job practices. These general principles can be readily adapted to a church environment: The pastor and property committee must commit to a program of increased safety and develop enthusiasm for the effort through

communication with the congregation.
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Church leaders should regularly inspect the church grounds and buildings, identifying hazards and items that need fixing. The staff can be trained to look for potential problems and report them to the property committee as soon as possible. Fire safety Several OSHA standards regarding fire prevention deserve attention from church leaders: Each workplace should have exits that are located a certain distance apart from one another and are never blocked. Buildings must be stocked with fire extinguishers in good working order and that employees be trained to use them; Employers must have a written plan to facilitate escape in case of fire and that all employees be trained what to do in an emergency. Employers must create and follow a fire-prevention plan that includes, among other things, procedures for disposing of flammable materials and controlling sources of combustion. Other OsHA rules Walking-working surfaces: OSHA mandates that every stairway floor opening have a railing and that every pit and trapdoor floor opening have a cover of standard strength and construction. Passageways and storerooms should be kept clean and orderly, and floors should be neat and dry. Ladders: Ladders must be in good condition and placed so that the rails have secure footing. Means of exit: Exits, along with aisles and passageways leading to them, need to be situated so they are readily accessible. Exit doors should be side-hinged and easily recognizable, and should never include locks.
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Protective equipment: Employers must provide personal protective equipment for the eyes, face, head, and extremities, including protective shields and barriers. OSHA focuses particularly on eye protection, requiring that devices protect against side hazards and that they fit over prescription lenses. An employer must survey work areas to determine whether such equipment is required. First aid: If a medical facility is not located near the workplace, an employer should make sure that one employee is trained in first aid and that adequate supplies are available. Lawn mowers: OSHA requires all mowers (walk-behind and riding) to have an 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 each discharge opening. You can obtain more information by writing to the Department of Labors Occupational Safety & Health Administration or by visiting http://www.osha.gov.
This article was adapted from Safety First, which first appeared in Your Church magazine, March/April 1999.
thought Provokers Does our church provide guidelines for safety that comply with OSHA? If not, how can we establish a plan that ensures our business will? What will compliance mean to us, in terms of added costs? Is there one person, either on the staff or the volunteer team, who naturally fits the role of overseeing safety guidelines and compliance and could lead this for us?
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Launching a Business at Church | Community, Conversation, and Connection

FOR PASTORS
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Community, Conversation, and Connection

How churches can engage a culture longing for relationships in familiar settings.
by Cornerstone Knowledge Networks I am not ashamed of the gospel, because it is the power of God for the salvation of everyone who believes: first for the Jew, then for the Gentile (Romans 1:16 ).
A Problem of Place In 1989, Dr. Ray Oldenburg introduced a concept called the third place in his book The Great Good Place. The book discusses the great public gathering places throughout cities and civilizations. Oldenburg suggests that the first two places in a persons life are home and work. He observes that the great cities and civilizations have always had third places where people go for informal community, conversation, and connection. Oldenburg uses the examples of the neighborhood bistros in France, the bier gardens in Germany, the piazzas in Italy, and the English pubs as informal public spaces that play a critical role in culture and the individuals who frequent them. In America, Oldenburg observes that we have ... a problem of place. He says, The automobile suburb had the effect of fragmenting the individuals world. As one observer wrote, A man works in one place, sleeps in another, shops somewhere else, finds pleasure or companionship where he can, and cares about none of these places. Randy Frazee, senior pastor of Pantego Bible Church in Fort Worth, Texas, says, We discovered the power and need for the Third Place backwards. We committed to the mega-church-100-acre-campus-on-the-freeway-strategy, only to discover that we were contributing to the problem. Our mega church was just one more contrived place that fractured peoples lives. We had a ministry model for geographic structure to promote connection and authentic community within residential neighborhoods, but built the mega structure that become just one more commute. ... Once you see (the Third Place), it changes everything. The power and momentum is organic, not contrived. We need to stop trying to manufacture
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community within a church, and instead go do church in the community. In my opinion, the ideal church structure of the future will be churches with many locations of multi-purpose/ community center buildings in the middle of neighborhoods. People Will Belong Before they Believe Frazees vision for the future is exactly what Community Christian Church in Naperville, Illinois, has been doing. Community Christian consists of several locations, including a community center it built in partnership with a developer. The center is located in the middle of a multifamily residential community that acts as a hub of activity for the neighborhood. Our south campus in Highpoint was our version 1.0 of a Third Place where a church meets on Sunday, Ferguson says. Our goal was to connect within the community. We went through a strategic shift in our thinking when we discovered that most people will belong before they believe. Community Christians building at the Highpoint development in Romeoville, Illinois, is a community center with living-room settings around fireplaces, a learning center for after-school tutoring, a coffee shop, gym, fitness center, and mailboxes for the residential community. One illustration of the buildings impact, Ferguson says: One Sunday morning, a resident showed up in his gym clothes with a basketball, only to find the room set up for a meeting, rather than open gym. The guy decided to see what was going on, so he sat in the back row, put his basketball under his chair and stayed for the church service. During the service, there was a discussion about getting to know people in your neighborhood by joining a small group, and the man signed up. He started attending the small group and brought his brother. A few months later, they both became Christ followers. This is a perfect example of how the Third Place helps us fulfill our mission, which ishelp people find their way back to God, Ferguson says. Community Christians location in Naperville is its version 2.0 of a Third Placewhere a church also happens to meet. This site is a yellow, multi-purpose building on 7 acres in a residential community. It acts as a commuter lot for public transportation, features a caf and coffee bar open 16 hours a day, a gym, a cyber caf with a wireless internet network and a few hard-wired terminals, and an afterschool music and arts program.
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Neighbors allow their children to gather at the church after school. It has become a place where they hangout. They love it and call it the YCThe Yellow Church, Ferguson says. Creating a Place Certainly the Starbucks type coffee bar or Barnes and Noble style coffee bar and bookstore combination has been a growing trend in new church spaces for some time. However, a few churches are taking the strategic step to create those types of environments in public places to connect and serve their communities. Joshuas Crossing Church in Fort Collins, Colorado, for instance, created a not-for-profit coffee shop in downtown Fort Collins. The coffee shop started when the church leased the location, but decided it needed to be used during the week to serve the community. So Everyday Joes coffee shop was formed. In an interview with Coloradoan Magazine, church board member Daryl Dickens says, We make an effort not to be a Christian coffee shop. We just want to be a good coffee shop where believers and nonbelievers are comfortable. The popularity and impact of a Third Place is directly related to the human need and desire for community. People need informal public meeting places in their lives where they can meet, set aside concerns of their home and work and talk, Oldenburg says. Without such places, the urban area fails to nourish the kinds of relationships and diversity of human contact that are the essence of the city, he says. Deprived of these settings, people remain lonely within the crowds. the Future What will churches look like in 10 to 20 years? Some Christian futurists believe that the younger generations will have no use for the 3,000- to 5,000-seat worship centers the baby boomers are building today. Many churches believe the future is our past: Going back to our residential communities, but with a new twistas a public space. So maybe churches of the future will be many sites instead of one. And maybe they will look more like coffee shops, bookstores, and other places where we find
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community, conversation, and connection. A place people will visit after work to see whats happening and ultimately find a relationship with our Heavenly Father.
excerpted from the article, Community, Conversation and Connection, which first appeared at Cornerstone Knowledge networks website, www.theckn.com, in 2007. Used with permission. All rights reserved.
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thought Provokers As we contemplate a business for our ministry, what goals or objectives do we seek to accomplish? Does the concept of a Third Place fit into our vision? Why or why not? Will this business best fit within our church building, or will it fit better some place else in the community?
step-by-step Launching a Business at Church | People and Places

THe LegAL SIDe
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People and Places

Adding a business can impact a churchs employment policies and zoning.
by James F. Cobble, Jr. and Richard R. Hammar Two are better than one, because they have a good return for their work: If one falls down, his friend can help him up. But pity the man who falls 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 of strengthening the churchs community, perhaps even its financial health. More importantly, the business may provide a needed bridge to connect with the surrounding community, providing an evangelistic opportunity. But launching a business likely poses less obvious implications for a church. A business likely will need employees or volunteers, requiring screening and selection processes, and adherence to federal and state hiring laws. An enterprise also may shift the church propertys use in a way that differs from how a local municipality 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:
Zoning laws Local zoning laws generally allow churches in residential areas. The courts have struggled with applying this term to various activities and organizations other than traditional congregations meeting in a building for regular worship services. Many other courts have been asked to decide whether a particular use of property comes within the definition of a church under municipal zoning laws. The following activities and uses have been held to come within that definition: Use of a home across the street from a church for womens fellowship meetings and religious education classes A single-family residence used by the United Presbyterian Church as a religious coffeehouse for university students

A priests home, convent, and parochial school A kindergarten, play area, and parochial school A private school operated by a Baptist church
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Other courts have concluded that certain uses of property do not constitute a church in the context of zoning laws. To illustrate, one court has held that an area restricted to residential and church uses could not accommodate temporary, open-air camp meetings. The court observed that not every place in which religious services are conducted is a church. It inferred that a church at the least must consist of a building set apart for public worship, and thus could not include camp meetings. Other courts have held that the following activities were not churches for purposes of 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 a church for purposes of zoning law despite the operation of a bookstore and audiovisual center on the premises. The court concluded that the convent and chapel, by themselves, clearly satisfied the definition of a church. The fact that a bookstore and audiovisual center were also operated on the premises did not affect this conclusion, since the books and materials were religious and educational in nature and were sold to support the orders missionary and instructional purposes. The court quoted from a 1943 decision of the United States Supreme Court: The mere fact that religious literature is sold rather than donated does not transform evangelism into a commercial enterprise. Further, the court concluded that the definition of church must be regarded broadly for zoning purposes in order to avoid serious constitutional questions. The court rejected the claim that the convent and chapel should not be allowed in a residential neighborhood since they would be a detriment to the neighborhood by increasing traffic congestion.
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The court observed that the intersection where the order planned to construct the convent and chapel carried a daily traffic volume of over 18,000 cars, and that the construction of the convent and chapel would draw approximately twenty [additional] cars per day. This case will be of interest to the many churches that operate bookstores on their premises. Local zoning laws generally allow churches in residential areas. The courts generally have extended this term to various accessory uses that are needed for a church to carry out its mission and purposes. Many zoning laws permit uses that are accessory to a permitted use. One court upheld a churchs right to construct a recreational complex on property adjacent to its sanctuary. Other courts have found that the following uses were accessory to a permitted church use and therefore were appropriate in a residential district: A church activities building and playground A parking lot A school And a center for performing arts Not every use of church property, however, will be so approved. The following uses of church property have been disallowed on the ground that they were not accessory to permitted church use: Parking of a church bus on church property A 301-foot radio transmission tower that was more than 10 times higher than neighboring residences A school. Example: The Missouri Supreme Court ruled that a church-run child care center is a permissible activity on church property zoned exclusively for church or residential purposes. The court acknowledged that the zoning ordinance did not allow child care facilities in the neighborhood in which the church was located, but it concluded that such an activity was a permissible accessory use.

employees and volunteers
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Churches and church leaders can face legal liability for the negligent selection of ministers, church employees, and volunteer workers. For the purposes of launching a business at a church, its important to understand what impact the business will have on the church, in terms of the addition of employees and the churchs involvement in interstate commerce, as well as the selection of volunteers. A finding of negligent selection dramatically impacts the life of a church and its leaders: 1. The trauma to victims of sexual misconduct. 2. The emotional and spiritual impact on the congregation. 3. The negative news coverage. 4. The stress of litigation and the investigative process. 5. The financial cost. 6. The personal impact on church leaders. Churches that launch businesses should use application and interview processes for employees and volunteers, as well as contact references and perform background checks, especially in situations where individuals contact children. Churches also should try to involve more than one person in hiring decisions, even if the startup only has one person overseeing its initial development. The use of written job descriptions and introductory periods also can help employees, volunteers, and the business clearly understand roles and expectations. To learn more about selecting and screening employees and workers, and to find sample applications and other hiring forms, see Selecting and Screening Church Workers. Visit www.YourChurchResources.com for ordering information. employment laws Title VII of the Civil Rights Act of 1964 bars certain employers from discriminating in employment decisions on the basis of any of the following factors: Race

Color National origin Sex Pregnancy Religion
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Only those employers that are engaged in an activity affecting interstate commerce and having at least 15 employees are subject to this law. Most churches have fewer than 15 employees and so they are not covered. Churches with 15 or more employees are covered only if they are engaged in an activity affecting interstate commerce. In general, whether or not a church meets this requirement will depend upon the frequency and nature of its interstate transactions. For instance, a church that sells several tapes of its weekly services to personals living in other states almost certainly is engaged in interstate commerce. But a church that doesnt sell any products across state lines, isnt engaged in any commercial or broadcasting activities, and makes few if any out-of-state purchases probably is not engaged in interstate commerce and wouldnt be subject to Title VII. Title VII only protects employees. It has no application to uncompensated volunteers. While churches that are covered by Title VII are exempted from the ban on religious discrimination in their employment decisions, they are not exempted from 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 is permitted to consider only persons who are members of its faith. Other acts to note: Age Discrimination in Employment Act: Activity affecting interstate commerce and at least 20 employees. Americans with Disabilities Act: Activity affecting interstate commerce and at least 15 employees.
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Family Medical Leave Act: Activity affecting state commerce and at least 50 employees. Uniformed Services Employment and Reemployment Rights Act of 1994 Immigration Reform and Control Act Fair Labor Standards Act Older Workers Benefit Protection Act of 1991 Caution: Church leaders are advised to seek the advice of a local attorney regarding the application of state and local employment and civil rights laws to ministers and lay employees.
This was adapted from Selecting and Screening Church Workers, by James F. Cobble, Jr., and Richard R. Hammar, 2005.
thought Provokers How is our churchs property currently zoned? What implications, if any, might a business pose to that zoning? Is our church engaged in any interstate commerce? Will this business? How does that influence what laws may or may not apply to us? Based on initial and long-term projections, how many people do we anticipate hiring? What processes are in place to effectively screen and hire those people?
step-by-step Launching a Business at Church | Resource Center

LeADeRS gUIDe
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Resource Center
Quick tips and recommended resources.
Now devote your heart and soul to seeking the Lord your God. Begin to build the sanctuary of the Lord God, so that you may bring the ark of the covenant of the Lord and the sacred articles belonging to God into the temple that will be built for the Name of the Lord (1 Chronicles 22:19).
tips for using Articles Consider these options for the use of articles and information in this download: Pass the Before You Open Your Doors assessment around at your next board meeting and have a 15-minute discussion. After reading through an article, choose questions to pose at a scheduled meeting and discuss them together. Brainstorm potential business opportunities that could enhance your ministry goals. Using the Bible verses found at the beginning of the articles, lead a devotional discussion at a staff meeting on the topic of using commercial means to further ministry purposes. Using the Thought Provoker questions, lead a discussion for church leaders.
Recommended Resources
Web resources
ChurchLawToday.com ChurchLawTodayStore.com Business Plan: http://www.myownbusiness.org/plan_checklist.html Top 10 Dos and Donts:: http://www.myownbusiness.org/business_top_ten.html Resources list: http://www.myownbusiness.org/resources_list.html Small Business Administration
step-by-step Launching a Business at Church | Resource Center

www.irs.gov
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BrotherhoodMutual.com. Brotherhood Mutual Insurance company is one of the leading insurers of churches and related ministries. Its website offers a wealth of free resources for keeping ministries safe.
Books, Kits, and Other resources 2008 Church & Clergy Tax guide: Get a better understanding of U.S. tax laws as they relate to pastors and churches. Church Law Special Reports: Quick and easy updates on the critical issues that continually concern the church. Inspection and Safety Checklists: 12 modules for assessing and improving facilities, and safeguarding activities. Risk Management Handbook for Churches and Schools by James F. Cobble, Jr., and Richard R. Hammar. Pastor, Church & Law by Richard Hammar. The most comprehensive and practical legal reference book ever published for churches and clergy. Selecting and Screening Church Workers
Unless otherwise indicated, Scripture taken from the HOLY BIBLe, neW InTeRnATIOnAL veRSIOn. Copyright 1973, 1978, 1984 by International Bible Society. Used by permission of Zondervan Publishing House. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations. Copyright 2008 by Christianity Today International. All rights reserved.

Cs01 - Starting A Business at Church

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step-by-step Launching a Business at Church

Practical strategies to protect your ministry

Starting a Business at Church

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People and Places

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step-by-step Launching a Business at Church | People and Places

step-by-step Launching a Business at Church | People and Places

step-by-step Launching a Business at Church | People and Places

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step-by-step Launching a Business at Church | Resource Center

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