7 Ways to Protect Your Church: Minimize Your Liability Through Effective Policies

In today’s culture, legal threats to churches seem to be mounting on every side as many localities seek to restrict access to prime real estate through zoning, opponents of religious liberty attempt to dismantle tax-exempt benefits for churches and clergy, and disputes about church property and other issues increasingly wind up in the courts.

According to ChurchLaw&Tax.com, the top five reasons churches wind up in court include:

1. Property Disputes

2. The Sexual Abuse of Minors

3. Personal Injury

4. Insurance Coverage Disputes

5. Zoning Issues

In this changing legal landscape, how can you protect your church from harm and increase your chances of staying out of court? Here are seven ways to protect your church:

1. Leverage the Law in Your Favor

2. Strengthen Your Governing Documents

3. Minimize Your Liability Through Effective Policies

4. Develop Effective Employment Practices

5. Maintain Insurance Specific to Your Needs

6. Clarify Property Issue Early

7. Protect Your Children, Students, and Volunteers

You can find blogs about leveraging the law in your favor HERE and using your governing documents to strengthen the church HERE. This blog focuses on minimizing liability through effective policies or, in other words how to keep your church out of court! Nobody likes to go to court, except may lawyers and judges who get paid to be there every day. Yet, as described above, churches wind up in court for a variety of different reasons, but one way to stay out of court is to adopt and implement effective policies. Notice a keyword here—effective. I’m not talking about policies that threw a wrench into everything the church wants to accomplish, but policies that make ministry more effective and protect the ministry for the future.

So, what are some key policies the church should adopt? Here are just a three.

Cash Handling Policy

A recent survey by Christianity Today revealed that 1 in 10 churches had been a victim of embezzlement with the average loss being over $80,000.00—not counting the loss of trust by donors. Even with the increase in online giving, most churches receive hundreds or thousands of dollars in cash and checks every week. Who is responsible for retrieving that money, counting that money, and depositing that money? Then, you make sure the proper credit is given to the appropriate donor. An effective cash handling policy, along with other effective financial policies, can prevent embezzlement and give donors the confidence that their contributions are being handled properly.

Facility Use Policy

Almost every week, churches contact me about leasing their facilities for free or at a cost to other entities. There are generally three concerns that I raise: (1) becoming a place of public accommodation and losing important religious exemptions; (2) creating a taxable situation; and (3) mitigating liability to the church. All of these concerns can be eliminated by an effective facilities use policy that restricts the use to entities that agree to not violate the church’s statement of faith and moral teachings during use, is drafted in light of the IRS’s rules on unrelated business income tax, and include provisions requiring indemnification, the release of liability, and appropriate insurance.

Children, Youth, and Volunteer Protection Policy

Almost every year, the number one reason churches wind up in court is the sexual abuse of minors under their care. That’s why Reynolds Law Group, PLLC provides every church client we serve as outside corporate counsel with Keeping Them Safe, a turn-key program to train works to prevent, detect, and report abuse or neglect of minors in the church’s care. Keeping Them Safe includes policies that reduce the risk of abuse, protect innocent volunteers, and provide assurance to families who place their children in the church’s care.

If you want to protect your church and stay out of court, it’s important to adopt effective policies. If you want to talk about how Reynolds Law Group can help you draft these policies, give us a call at 757.219.2500 to set up an appointment or email us at assistant@reynoldslawgroup.com.