Something to Consider…

We recently asked church leaders about the following situation:

Lately your church has been acquiring expensive video and audio equipment in order to make your worship services more appealing to a younger audience. One of your lay leaders thinks that it might be a good idea to take an inventory for the first time.

When is an inventory a good idea?

Often we recommend to church leaders things that they can do to make managing their church more effective, legally compliant and hopefully, easier. But we understand that many times our recommendations involve time and effort on the part of those leaders—leaders who find themselves already running short on time.

So you probably wonder why we would even think of bringing up the idea of conducting an inventory of your church’s property. Isn’t doing a detailed listing of every item the church owns, where it is located, what the church paid for it, and who it was purchase from a mammoth undertaking?

Yes, while a detailed inventory is the ideal, there are other alternatives that may serve your church quite well. But before we get to those, let’s open our Bibles for a moment. When you read in the ninth chapter of 1 Chronicles you learn about the gatekeepers of the temple of the Lord. They were a select group of Levites who were assigned specific duties. In the New International Version verse 28 reads,

“Some of them were in charge of the articles used in the temple service, they
counted them when they were brought in and when they were taken out.”

So even in Old Testament times, some of the Levites were responsible for basically taking an inventory of the articles used in the temple service. While the purpose for their counting is not fully explained in 1 Chronicles, we believe that your church has good reasons why it should take the time and trouble to conduct some kind of inventory of its property as well.

Property Insurance Explained

When you purchased property insurance your insurance company divided up what it was going to cover into real property and business personal property, also called contents. Your real property is your building and everything that is attached to it. For example, if you have pews that are permanently mounted to the floor, they are considered part of the building. If they aren’t attached to the floor, they are considered contents.

The premium that you ended up paying was then based on how much of the risk of loss you were willing to accept. Part of that was indicated by how high a deductible you chose. In addition, whether you wanted to be insured for replacement value or actual cash value of your building and its contents was also part of the risk you were willing to accept. You see, if you chose coverage for the actual cash value, you basically agreed that you were willing to have the replacement cost reduced by depreciation.

If you didn’t have a detailed inventory of your building’s contents, then the insurance company probably charged you a predetermined percentage of your building’s value in order to cover the contents. We know of one major insurer of churches who uses 18 percent for that computation. Without an inventory that percentage could be too low causing you to be underinsured, or too high causing you to pay too much for coverage that you don’t need. Claim research from another major insurer of churches’ shows that churches are more likely to have their contents underinsured.

But not having a current inventory can hurt your church even more if your church suffers a catastrophic loss or damage from something such as a fire or a tornado. The amounts that you are insured for are merely the maximum amounts your insurance company will pay. You are still expected to justify your loss. Having a complete inventory reduces the risk that you will shortchange yourself by failing to include all of the items that were damaged or destroyed.

Having a complete inventory reduces the risk that you will shortchange yourself by failing to include all of the items that were damaged or destroyed.

Something else to consider, after a catastrophic loss, will your church leaders be emotionally able to put together a detailed list of what your church lost, let alone remember everything? Even if the church is a total loss, an inventory list will need to be submitted as part of the church’s claim. And doing so after the fact will slow down the recovery process.

So you say you’d rather take the low stress route and be prepared, but you’re not sure that there is anyone who has the time to put together the detailed inventory that you’d really like to have. As we mentioned earlier, that’s the ideal. But there are a couple of other alternatives that go a long way when a detailed inventory is not available.

Alternatives to a Written Inventory

The first is to take a digital still camera and take numerous photos in every room of your church. Modern point and shoot digital cameras selling for less than $200 are quite capable of providing decent quality photos of the contents of your church. A data card with a capacity of either 4 or 8 gigabytes will provide you with more than enough capacity to photograph every room in your building from multiple angles and with enough space for you to also include lots of individual close-up images of higher value items.

If you need a starting place, first begin to identify the big ticket items at your church such as sound equipment, audio-visual equipment, musical instruments and kitchen equipment.

A second way is to do a video tour of every room in your building. Take a video camera and a microphone and walk around your church. As you wander through your church explain into the microphone what you see in the viewfinder. If you know additional information about an item in the frame, such as when it was acquired and what it cost, include that in the commentary. Remember, the more information, the better. Again, be sure to include close-ups of individual items as well as wide angle views of each room.

Whether you shoot video or stills, be sure to view the contents of the data card to confirm that your shooting session was successful. We understand that may sound silly, but it’s a lot less silly than when you go to access the images or video later and they’re not there.

Finally, be sure to make a couple of copies of the data file or files that were created. We recommend that you store the original off site. We also recommend the church’s safe deposit box instead of in a church member’s home. Your insurance agent also might like to have a copy so check with them as well.

If you periodically replace your church’s computers or other technology, it probably would be a good idea if you repeat your video or photo session every two or three years so that it’s up to date. Even better would be to use the new items as seed entries on a written inventory. The purchase information regarding where, when, and how much you paid for something will never be more readily available along with its description, model number and serial number.

While we’ve mainly focused on the value of having an inventory for insurance purposes, an inventory of equipment whose useful life can be extended by preventative maintenance is also a good idea. If you can extend the life of an air conditioner by having preventive maintenance performed, you’ll probably not only spend less in the long run, you’ll be less likely to have the unit conk out on a Sunday morning in July when the outside temperature is hovering above 100 degrees.

If you don’t want to feel the heat after your church has suffered a catastrophic loss or damage, take steps without delay to conduct an inventory. Need more information or help? Contact us.

Please Note: This information is provided with the understanding that Church Administrative Professionals is not rendering professional advice or service.

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Deborah Miller, cca

Charles Kneyse

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