WOW – You Offer THAT?!

The other day I was contacted by a man from a church who was working with a committee he had established to help his church understand the importance of taking care of and planning for the inevitable future costs related to their church facilities. He had downloaded one of our eBooks (Church Facility Stewardship) and was interested in other resources to make his case.

As I started to compile a response, I paused and stared at the screen…WOW – THAT IS INCREDIBLE! As the email developed and the list grew, I was frankly humbled and blown away with the resources that we have been able to make available to churches across the country.

If you have not checked out what we have developed (many resources are free) and what services we provide…just take a look at the list below.

  1. 5 Intentional Steps to Establish a Capital Reserve Account –  Free eBook – This was written as a primer for churches that are starting from Square 1 with a capital reserve.
  2. Church Facility Evaluator – Free tool to evaluate some of the key operational metrics/costs of a church related to national averages.
  3. Church Facility Stewardship Manual – Almost 300 pages of information for any church to use to establish and further their facility management initiatives.
  4. Other Resources – We have written a number of books and other material.
  5. Assessments/Training – We also provide a number of assessments and training.
  6. Life Cycle Calculator – This is a free software that will help ANY organization establish their capital reserve plan and project funds needs and when.
  7. eSPACE – Facility Management Software – We originally developed this software suite for churches, but since 2008,  we now have private and public schools, colleges, YMCAs, municipalities and other facility/property managers. In addition to the free Life Cycle Calculator from above, we have subscription offerings for:
    1. Event Management 
    2. Work Order Management
    3. HVAC Integration 
  8. Church Facility Management  Solutions – This is a new membership website that we recently released…VERY excited about this!

If your church has a facility…you need to familiarize yourself with the above items and take advantage of the best set of tools to help you be a GREAT steward!


Keys to Success in Uncertain Times

A few years ago, I attended a conference sponsored by Shelby Systems. On this particular day, the guest speaker for the session was Mr. Dan Busby, President of ECFA  (Evangelical Council for Financial Accountability). This was one of the best plenary teaching times I have heard in some time. Dan is one smart guy…and has tremendous insight regarding financial issues. But what stuck with me, was his passion for the Lord and His people. This was so refreshing to me…so…I asked Dan if I could share the outline that he taught from…for which he graciously consented…thanks Dan.

KEYS TO SUCCESS IN UNCERTAIN TIMES (I would add…for all times)

  1. Practice Integrity – Integrity has no need for rules. (This really struck me…how many of us try to legislate integrity?)
  2. Talk Straight – Let your yes be yes…and your no be no
  3. Listen Aggressively – “When was the last time you were criticized for listening too much?” (Norm Augustine – Lockheed Martin)
  4. Ignite Trust – Low trust exposes everything (this concept is further explained in the best selling book “The Speed of Trust” by Stephen MR Covey)
  5. Create Margin – In all you do…including but not limited to time, personal finances, business finances, commitments, etc. (A great resource for this is Margin: Restoring Emotional, Physical, Financial, and Time Reserves to Overloaded Lives by Richard A. Swenson)
  6. Require Simplicity – “If you cannot explain something simply, you don’t know enough about it.”  ~Albert Einstein
  7. Insist on Flexibility – While we can learn from history, history has never been here before.

Dan finished the session by saying, “Success is having clearly defined goals consistent with God’s plan and faithfully meeting them with integrity.”

These are great lessons for all of us…whether in business, church leadership, or our families.


Why Use Facility Management Software for Your Church: Part 3

Welcome to Part 3 of our series on Why Use Facility Management Software for Our Church.  You can see the first 2 segments on our BLOG page.

In summary, we have established common language for this discussion and explored the first 2 most obvious reasons for using facility management software (Be intentional and Central Database/Repository).

Now, let’s expand that list and look at a number of other factors in making the right decision for your church/ministry:

  1. Hit by a truck: What would happen to all of your data, plans, procedures, systems, process, etc if the key facility person at the church was (heaven forbid) hit by a truck? Would you lose all of the data that is squirreled away in their head? Would you find yourself starting from scratch? What things might go undone or undetected until something major broke-down? Would you know where all of the files were stored and what vendors had contracts with the church or what promises had been made? I have met dozens of great facility managers. They know their facilities like the back of their hands and they are invaluable to their church. But…what if suddenly they were gone? Would you be prepared?
  2. Long Term Capital Improvement Planning: We have been pretty surprised by how many churches do not have an active “sinking fund” or some form of capital reserve process. When we ask them about their planning process for major capital expenses (i.e. replacing flooring, replacing HVAC equipment, resurfacing parking, etc), the oh too common answer is…”we wait until it breaks and then replace it.”  OUCH…that does not sound like planning! It is funny that we generally do a tremendous job when we plan for a building expansion or new construction project. We set aside money in a building fund…evaluate the costs…and plan accordingly. However, we find it more common than not that this level of proactive planning dies when a church moves into the building. Having a proactive means to project and plan for future capital expenditures is a key factor in using facility management software.

    “Trying to keep all of this in your head or on a legal pad will only increase the stock value for Advil.”

  3. Prioritize work: Does the “urgent” take precedence over the important? Does that last e-mail or call take you off task? Ever walk into the office and know you have a  million things to to…but don’t know where to start? Do you feel like you have a mountain of work…e-mail or projects or emergencies?  Well…you are not alone. Frankly, I feel exactly like that as I am typing this. I have a fence to repair, bills to pay, accounting to update, and so much more.  Well…the use of a software solution can be a tremendous asset to staying on point and keep work prioritized. If it was not for Outlook, I would forget where I am to be, everyone’s phone numbers and even when to take certain meds (I know…I am a mess). If it was not for my PipeDrive account, I would not be able to stay on task with the people I need to follow up with or to get a proposal. Facility management software can do the same thing for your facility team. It can set the priority of the work, set an ETA for the work to be complete and send e-mail alerts and reminders. Trying to keep all of this in your head or on a legal pad will only increase the stock value for Advil.
  4. Manage Vendors: Who is approved to work on your site? How do you track their names, addresses, e-mails, phone numbers, etc? How do you dispatch work to the vendors? Fax? Phone? Smoke signals? Most good facility management software solutions will, at the very least, provide a section to list all of the pertinent data about your vendors and subs. This is a necessity. The better systems will also provide a means for assigning work orders to vendors and dispatch the work orders via an automated system through e-mail, text messages or some similar method. We believe that these tools are vital to the success of your work flow and will save you a great deal of time and frustration in the future.

Well…that is it for this time…there are several more factors that need to be discussed…but they will have to wait until our next post.

By the way…if you have not already downloaded your free copy of our HVAC eBook…you can do so HERE.


The Four Buckets of Church Facility Budgeting

“Hey Tim…how do we get started with Facility Budgeting?” I hear that a lot from Pastors, XP’s, Business Admins, Facility Managers and lay people.  It is a universal concern.  Let’s take a 30,000 foot level view of the most effective means by which we have seen work.

When you are budgeting for your facilities, there are 4 primary buckets that need to be accounted for:

We fully believe that being intentional about all 4 buckets will keep you out of the dog house related to your facilities

  1. Operational – This includes utilities, janitorial, general maintenance and staffing. Budgeting these area will be critical to get RIGHT. What does that mean? It means that you are not spending too much on utilities and making sure you are spending enough in the other areas to keep up with the natural rate of deterioration. Here are some rules of thumb that we find to represent “best-practices” for churches:
    1. Utilities – $1.00-1.50/SF annually. If you are over $1.25/SF, you may want to consider an energy audit or a review of your HVAC controls, as 50% or more of your energy consumption is attributed to HVAC and the best way to reduce that is through proper “behavior” which can be assisted with proper controls. We also just released a free eBook on HVAC Solutions…get your free copy HERE.
    2. Janitorial (labor, material, paper products, major cleaning like carpet extractions, window cleaning, etc.) should be in the $1.50-$2.50 range annually.
    3. General Maintenance – If you are budgeting below the national average of $2.25 – $3.00/SF this should be re-looked at. We have found that if a lack of general maintenance is present, the likelihood of deferred maintenance increases.  In most cases $1 not spent on general maintenance will cost 3-4 times in the future.
    4. Staff – Based on national surveys by our firm and IFMA, we believe the number of facility staff for a well-run organization is one Full Time Facility Staff Employee for every 25,000 – 35,000 SF.
  2. Deferred Maintenance – These are the items that should have been addressed prior but for whatever reason, have not been accounted for. We have found that when insufficient general maintenance is budgeted, the likelihood of deferred maintenance increases…same for staffing. As stated above, the cost of deferred maintenance can be 3-4 times the cost of the initial general maintenance. Sounds like good stewardship to avoid deferred maintenance.
  3. Capital Reserve – We have found that a church needs $1-3/SF annually in order to keep up with the real cost life cycle planning. Capital replacement is not an “IF” consideration but rather a “WHEN” and “HOW MUCH”. While the $1-3/SF is a reasonable way to start planning, the best way is to do “line-item” projections for each asset that has a life cycle. If you have not already done so, check out our FREE Life Cycle Calculator to help you get started.  We also have a free eBook on this topic.
  4. Capital Projects – These would be the type projects like adding space or major renovations, expansions and the like. It would be “easy” to see the need for some added space and be tempted to take the money from one of the above buckets. Be VERY careful with that thinking…that is a slippery slope. In addition, small projects like painting, replacing a few light fixtures, etc could…and should…be part of your General Maintenance budget.

We fully believe that being intentional about all 4 buckets will keep you out of the dog house related to your facilities. If you need help evaluating these, do not hesitate to reach out and we will help you get started.


10 Keys to Maximizing Your Church Facility – Interview with Thom Rainer

Do you know what you need to focus on related to your church facility in 2018? If not, you will want to hear this podcast with Dr. Thom Rainer.

Some highlights from this podcast include:

  • Your church is more inclined to experience a parent in a divorce case trying to abduct a child than it is to experience an active shooter.
  • Presence is the #1 thing your church can do to increase security.
  • Is your church facility congruent with your mission?
  • In a perfect world, you wouldn’t have deferred maintenance; you’d have enough money to handle facility issues as they arise.
  • Your facility team is an important part of your church’s ministry.

Is your church facility congruent with your mission?

The ten keys to maximizing your church facility are:

  1. Safety and security
  2. Flow of the space
  3. Contextualization of facilities
  4. Capital reserve – facing the inevitable
  5. Addressing the 4 buckets of budgeting
  6. Staffing
  7. Defining CLEAN and how that impacts staffing and budget
  8. Spatial utilization
  9. Integrating the facility and facility staff in your ministry
  10. Empowering the membership to be active in facility stewardship

Listen to the entire interview with Dr. Rainer HERE


Church Facility Projects – You’ve Moved In…But You’re Still Not Done

You’ve moved into the new facility and are enjoying the “new car smell” and excitement that comes with seeing the vision become reality.  As you celebrate this momentous occasion, there’s still work to be done to keep this new building running at peak performance.

Capital Reserves

Start setting aside money in a Capital Reserves Account.  Ideally, this is a separate bank account used only for facility maintenance and repair expenses.  At the very least, it can be a separate line item in the general ledger.  Don’t forget to include reserves for IT and AVL (audio, visual, lighting) equipment.  How much should you set aside?  For a new (or fairly new) construction, save $1.00-$3.00 per square foot each year.

Maintenance-Related Expenses

Add or update the maintenance-related expenses in your church’s annual budget.  Expect to spend roughly $2.00-$2.50 per square foot annually on general maintenance.  You’ll also need to budget for additional facilities staff to handle those general maintenance tasks.  Plan for one FTE (full-time equivalent) for every 25,000 – 35,000 square feet.

Utilities

Update the budget to account for the change in utility costs at your new facility.  A good place to start is $1.00-$1.50 per square foot each year.

Janitorial Services

Whether you handle this in-house or outsource janitorial work, you’ll need to budget approximately $1.75 – $2.50 per square foot each year.

Handling these behind-the-scenes tasks will help keep your new facility running smoothly and efficiently for years to come.

Intentional organizations plan today for tomorrow’s costs. That’s why it’s critical you establish a capital reserve account now. Download our FREE eBook to learn more.

Church Facility Projects – Preparing for the Capital Campaign

This next phase is all about raising money.  While that may sound unappealing in ministry, the practical reality is any building project will require a significant financial investment.  Thankfully, raising funds doesn’t have to feel slimy or worldly focused.  In fact, this is an opportunity for your congregation to come together to achieve a common vision.  It’s much less about the actual dollars than it is about developing a culture of generosity and rallying around the vision.

We spoke with Brad Leeper from Generis to get his insights on a successful campaign.  Here are his tips for preparing to launch a capital campaign:

Tip #1: Don’t assume people will be in church every weekend to hear multiple presentations about the campaign

Generis recommends a typical campaign (at least the public version) run for about five weeks.  Most people in your congregation will miss a Sunday or two within that five-week window.  Therefore, you need to tailor your communications with that in mind.

Tip #2: Campaigns shouldn’t be boring

Don’t just present a few architectural drawings and expect people to rally around those pictures.  The campaign should be fun, crazy, exciting, and life-giving.  Any guilt trip or sense of condemnation if someone doesn’t give isn’t going to work.  This should be a watershed moment in the life of the church.

You’ll need to infuse the campaign with credibility (hey, they’ve really thought this through), momentum (wow, I can see they already have key leaders onboard who’ve already donated), and energy (this is going to be an amazing building!).

Tip #3: Realize that potential givers will go through a thought process, including the following, before deciding to commit:

  •      “What’s the information?”
  •      “Why are we doing this?”
  •      “How do I participate in this?”

They’ll likely be less concerned about the information and more interested in the inspiration (the vision, the “why?”).  Whether they consciously go through this thought process or not, you’ll need to account for each of these three questions as you communicate with them about the campaign.

Potential Pitfalls to Consider

Keep in mind that church is one of many aspects of an individual’s life.  They have a job, a family, kid’s activities, and more consuming – their mental and emotional energy.  Since most people aren’t giving at a meaningful level now, they may not feel like this campaign applies to them since they aren’t giving anyway.  There’s an unspoken attitude of “why should I care?” that you’ll need to address.

An emotional appeal to rally around the vision will get some people on board.  However, others will also want to hear the practical reasons behind the project.  They want to know if it makes sense to do this project.  Be prepared to inspire and give practical reasons why to capture the attention of the widest audience.

Discuss why this project is critical to fulfilling the mission and vision of your church.  What happens if we don’t do this project?  What happens if I, as an individual giver, don’t contribute towards this effort?

Address why someone should consider prioritizing his/her finances so they can give towards this project.  What are you inviting them to be part of that’s bigger than themselves?  Don’t expect them to figure that out on their own.  Connect the dots for them and help them see why this is an effort worth sacrificing for.

As you can tell, it takes time to build up towards the public facing part of a capital campaign.  Consider the current culture of your congregation and how people will think or what they may ask as you get started.

Church Facility Projects – So You Want to Launch a Building Project?

Whether you’re renting a facility or want to expand the one you already own, the decision to embark on a building project isn’t one to take lightly.  This effort will require a significant amount of time, energy, money, teamwork, and prayer.  If you don’t have prior experience in the construction industry or an unlimited budget (who does?!), then this is time to pause and consider what you’re about to do as a church.

It’s always helpful to have a road map or GPS available before you set out on a trip into unfamiliar territory.  With that in mind, we’ve developed a series of posts to guide you through key milestones in the construction journey.  From architectural drawings to financing and more, we’ll walk you through the major issues and point out potential pitfalls.

To get started, let’s address what you need to do first.  There are lots of behind-the-scenes details to manage as you start planning this significant effort.

Determine Your Why

The first phase of any construction project starts way before you hire a construction crew or start moving dirt.  You have much planning to do before you can get to those steps.  In fact, the first thing you should consider is “why”.

  •      Why do we want to do this project?
  •      Have we outgrown our current facility?
  •      Do we see a need in our community that this project could fill (that our current facility can not)?

Getting clarity on the vision behind the project is a pivotal first step.  Without a clear vision, you’ll have trouble making decisions and communicating why people should donate towards this project.

Gather a Team of Advisors

As we read in Proverbs 15:22, “Plans fail for lack of counsel, but with many advisors they succeed.”  Unless you are fortunate enough to have people within your congregation with these specialized skill-sets, you’ll need to bring in outside experts to give you wise counsel.  This is the time to start talking with potential architects, lenders, and capital campaign consultants.  It’s tempting to think you should start with an architect before talking with potential lenders so you know how much money you’ll need.  However, talking with lenders as you meet with your architect can help you determine what a lender is willing to loan to your church.  That can have a significant impact on what you can afford to design with an architect. Remember: You can do a building project in phases as your budget allows.  Trying to do it all at once isn’t necessary.  Check out “If it’s Phase-able, It’s Feasible” for more insights into that approach.

Get Your Facilities Manager Involved Now

Whoever is responsible for the maintenance and upkeep of your current facility needs to be involved in the planning process from day one.  This is the person who knows the constraints of your current facility, who hears the complaints from staff and volunteers, and who has to figure out where to store everything for multi-functioning rooms.  Even if you’re renting a facility, this is the person who knows how your congregation uses a building and what you’ll need in a new facility.

One example of where you’ll need to involve the facilities manager is in discussions with your project management team.  Here are a few questions your facilities manager may want to ask:

  • How can we setup the lighting and HVAC controls so we can save money by making the use of electricity more efficient?
  • How are we accounting for storage?  Consider how you’ll use each room.  If a room is multi-         functioning, decide where you’ll store extra tables and chairs for various room configurations.
  • How will we maintain this new facility?  If we have lights 20-30 feet in the air with pews or theater seats below, how will we replace the bulbs?

Consider the Total Cost

The total cost doesn’t simply include what it will take to build the facility.  Construction costs are just one piece of the overall puzzle.  Construction costs typically don’t include design elements such as theatrical lighting, sound, furniture, décor, flooring, paint, environmental graphics, IT components, etc. You’ll also need to factor in what it will cost to operate and maintain the facility once you’ve moved in.  This includes monthly utilities, maintenance and repairs, janitorial services, and maintenance staff.

Another item to consider is your long-term life cycle planning.  This is your plan for stewarding the new facility and the equipment associated with it so you can maintain and replace items as needed.  Each item has a life cycle or amount of time it will last.  HVAC units eventually stop working.  You’ll need to replace the soundboards and flooring at some point.  Consider the cost of replacing each item and what you should set aside in a capital reserve fund each month so you can easily pay for those replacements when the time comes.  eSPACE provides a free Life Cycle Calculator you can use to start this planning process.

Add up the monthly mortgage payment, what you’ll spend each month to maintain the facility (including insurance costs), and what you need to set aside for capital reserves.  Is that amount something your church can comfortably afford?  If not, now is the time to adjust plans and expectations before you’ve invested any money into the project.

Start Planning for the Capital Campaign

Unless you’ve already been saving for years, you’ll likely need to run a capital campaign to raise money for this project.  Before you announce anything to the congregation, you will need to do careful planning on how and when to cast this vision.  Brad Leeper from Generis offered these tips:

  • Start talking with church staff, leaders (elders, deacons, etc.), major givers, and small groups to align leaders before presenting the campaign to the full congregation.
  • Make sure you’re clear on why you’re doing what you’re doing.  You’ll raise more money by taking a longer view of the capital campaign process.  This is more about creating a culture of generosity and leveraging that cultural change than a short-term campaign.

This planning phase is vital to the success of your building project.  Don’t shortcut or skip anything in this phase.  You’ll end up having to deal with these tasks at some point anyway, so it’s best to handle them now before you’ve invested considerable time and money.

In addition, we have recently developed a FREE Church Facility Evaluator. This simple tool will provide you with a snapshot of some key indicators associated with facility operational costs.  This 2-3 minute evaluation will give you some real time data…based on national averages…as to whether you are GOOD TO GO…or in need of help.

Don’t wait…get started HERE!

The "4 X" Reality of Deferred Maintenance

I continue to study, explore, and learn more about the impacts of deferred maintenance.  As I venture deeper into this topic, the more driven I become as to the need for Kingdom minded people to TAKE THIS SERIOUSLY!

Let me share some of the research we have been studying and how this is not to be taken lightly.

I was reading a blog that quoted Rick Biedenweg, President of Pacific Partners Consulting Group and former Assistant Vice President of information resources at Stanford University. In that blog Mr. Biedenweg said:

“Every $1 in deferred maintenance costs $4 of capital renewal needs in the future.”

WOW…that is a kick in the gut.  I have taught for years that if we do not keep up with the natural rate of deterioration (1-4% of the current replacement value – CRV) that the rate can more than double.  This reinforces this premise as the compounding factor of not spending $1 today, can grow 4 fold as the deterioration continues…coupled with the future value of time and money.

While Biedenweg worked primarily with the educational system and their needs, his numbers and research can be used with any type of maintenance department. Their research indicates educational institutions should be spending 0.5% (annually) of their building and system’s current replacement value on ongoing maintenance and regular preventive maintenance and 1.5% of CRV on capital repairs. Again, this solidifies and accentuates the positions we have taken related to Facility Stewardship and the need for intentional and proactive long term planning.

If you want a real mind-blowing experience, read this article called the “Inverse-Square Rule” by David Tod Geaslin.  This made my head hurt!  If you don’t have time to read the entire article, at least grasp this thought:

“If a necessary repair is deferred and allowed to remain in service until the next level of failure, the resultant expense will be 30-times the early intervention cost.”

Lord have mercy!

Here is one other startling thought that caught my attention in a article by the American School & University Magazine entitled Falling Behind: School Maintenance & Operations.

Here are some of the salient points in the article:

  1. The National Education Association issued a report on school facilities in 2000, “Modernizing Our Schools: What Will It Cost?” The teachers union estimated the nationwide cost of repairing, renovating, or building school facilities and installing modern educational technology at $322 billion.
  2. In 2013, the U.S. Green Building Council’s Center for Green Schools issued a report, “State of Our Schools 2013,” that takes the 21st Century School Fund’s $271 million estimate and adds to it modernization costs that would enable U.S. schools to meet current education, safety and health standards. The grand total: $542 billion.
  3. The American Society of Civil Engineers has assessed the condition of the nation’s public school infrastructure in a way that educators will understand: A report card. But schools won’t make the honor roll with the grade: D. That’s better than the F that the engineers gave to school infrastructure in 1998, or the D-minus in 2001. The D bestowed on school facilities in 2005, 2009 and again in 2013 is an indication that schools have made some progress in addressing maintenance backlogs since greater attention was given to the issue in the 1990’s, but the response has been inadequate to confront the scope of the problem.

PERSONAL NOTE: There are only 98,000 public schools in America…and over 350,000 churches. Can you imagine what the amount of church deferred maintenance there is in churches if there is $542 Billion in public schools?

“Yeah, Tim, but that is schools…and that is public domain.  We are churches, Christian Schools and Universities. We are different.”

I agree…but not the way you may be thinking.  Here are the differences I see:

  1. Schools are an “entitled” entity in our current social structure. However, our ministry and educational facilities have been ENTRUSTED to us which places even more responsibility on the stewards.
  2. Public Schools are funded through taxes…which means their funding is not provided out of the goodness of contributors hearts.

So…what is the bright side of this (I know…the above is a little depressing)?  It is never to late to get started to turn the tide.  We will look at the ways by which your organization can address these issues and turn the tide.

Make sure to download your FREE copy of 5 Intentional Steps to Establish a Capital Reserve Account.  Also, get your FREE subscription to the Life Cycle Calculator. Be INTENTIONAL!

Life Cycle Planning – FOR FREE

You all know I am a huge proponent of Capital Reserve Planning…Life Cycle Initiatives…Facility Stewardship. I am such a huge fan that our company invested thousands of dollars developing the Life Cycle Calculator as part of your eSPACE software suite of Facility Management Solutions. I believe every church should have this tool and should have a plan for the inevitability of the future costs related to facilities and capital replacement costs.

As such, our team has really struggled about how to get this in the hands of all churches with a facility.  How do we get them to use it?  How do we help them plan for the future?  What needs to be done?

Well…we have an idea that we believe is the right thing for any and every church.

MAKE IT FREE!

That’s right, effective immediately, the eSPACE Life Cycle Calculator is now FREE.  No cost.  No set up fee.  No maintenance fee. No need to purchase any of our other applications or services.  Just plain old FREE.

We believe that Capital Reserve Planning is that important. We are so passionate about it that we are actually refunding those churches that paid for it originally.

If your church has a facility…or any physical assets (vehicles, A/V equipment, IT equipment, maintenance equipment, etc) that has a life cycle and expected replacement value, then this tool will be a tremendous asset to you and your organization.

Click HERE to get started.

To help you get started with your Capital Reserve Planning make sure to download our FREE eBook to learn more.