A catch-phrase that came out in the Watergate era in the 1970s that described the best way to uncover the truth behind a scandal was to “Follow the money.” You can also observe much about a family, a business and (believe it or not) a church by following how their money is being spent. Every conscientious local church leader wants to heed John 15:8, “This is to my Father's glory, that you bear much fruit, showing yourselves to be my disciples” (NIV). A very important element of obedience to this exhortation is spending ministry money in a way that maximizes fruit-bearing.
Below are seven keys to managing church finances effectively. These principles can help to insure that the stewardship of ministry money supports instead of hindering church growth.
1. Divide and conquer--Churches can have many moving parts. Substantial resources are required to evangelize, disciple, mentor and minister. Church dollars are needed in various areas to facilitate these processes. During His earthly ministry, Jesus ministered to many, but only managed 12 men. Jesus kept the number of touch points in his ministry to a manageable level.
While the concept of distributed responsibility is an accepted practice in most ministries, financial responsibility and reporting do not always mirror the leadership structure. When this happens, leaders have too many disparate details to evaluate in order to measure the effective use of the church’s money. Financial reporting that is sub-divided and summarized by functional areas allows church leaders to assess results and implement accountability.
Distributed responsibility and accountability can be supported by organizing expenses (and income where applicable) into manageable divisions or departments. Most church expenses fall into one of four categories: administration, facilities, personnel and ministry. Ministry itself can be multiple departments based on how the church is managed.
2. No fiefdoms allowed–-Jesus compared the church to a body. Each part is necessary, but of no value apart from the body. We all know that competitiveness among churches is counter-productive to the Kingdom. Unfortunately, this same problem can develop within a local church. Many times money is at the core of the conflict. The practice of each area of ministry having its own money can promote an environment of haves and have-nots.
Can you imagine a scenario where a church department is flush with money, takes trips, has fellowships and enjoys plush meeting areas while the nursery doesn’t have enough cribs for its infants. Dueling fundraisers can be another source of division.
Trying to account for all of these separate departmental monies can be costly and unmanageable. Even though certain ministry departments may raise money through offerings or fund raisers, they are usually subsidized by the church budget. A simpler approach is to develop a budget for each department that includes any income they might generate and an allocation of church budget funds based on the priorities indicated by the vision and mission statement of the church. Each departmental leader is then accountable for how the allocated and raised funds together are spent. If priorities change and/or general church funds are less available, the good of the whole body must be the guiding principle and not “how much money do we have left in our budget or account.”
The church body works best when it and its money move as one, carrying out the vision that God has given its leadership.
3. Pay attention–-The only thing worse than micro-management is delegation without accountability. A wise management coach once said, “You have to inspect what you expect.” In the parable of the talents, the master empowered three men with some of his resources to steward. Then, at the appropriate time he asked for an accounting. Had there been no accounting, the one who buried his one talent would have felt just as justified as the others who produced results. What motive would the faithful servants have to continue to produce if there were neither consequences for irresponsibility nor rewards for good stewardship.
Accountability actually improves respect, loyalty and morale. From the financial side, the results of poor accountability can be that ministry money is wasted rather than put to good use. I have seen examples of unnecessary wastes of money such as drummers breaking expensive cymbals frequently, bounced check charges, late fees and the spending of money on legacy traditions that have long since lost their effectiveness. All could be eliminated with proper oversight.
4. What do the numbers say?–Numbers can speak volumes, but not without a context. A number may say that your church spent $3,000 on utilities last month, but that is all it tells you. However, if I compare that number to the month before or the same number last year or the average for the year or how much was budgeted, it becomes meaningful.
A tithes and offering number for last month may be nothing more than a number, however the trend indicated by the tithes and offerings numbers for the last six months may indicate a serious issue that needs to be addressed or a positive indicator of available resources to fund more ministry.
5. Don’t hide the needs–People want to be a part of something that is accomplishing good things. A clearly articulated vision supported by good stewardship gives parishioners a comfort level that the money they contribute is responsibly applied to ministry.
This trust factor can be invaluable. Ministry opportunities that seem impossible can become possible by sharing the need with a church body that trusts that its leaders have carefully evaluated the need and will manage the opportunity responsibly.
6. Keep the honest, honest–-It is easy to entrust the responsibility for handling church money to an honest person and forget about it. Over and over, however, we have all seen examples where so-called honest people have stolen church money because it was just too easy. Many only intended to “borrow” but never got around to repaying.
A simple system of checks and balances for counting church money, approving expenses, check signing and reconciling bank accounts help to keep the honest, honest. This also provides a layer of protection for the individuals involved.
We have all heard that Christians should be the best employees, the best neighbors and the best customers who pay their bills on time. Well, churches should certainly set the example for the Christian world by meeting its obligations timely and fully. What kind of witness to a sinful world is a church that is known by its delinquencies, write-offs or foreclosures?
7. Get help–Aligning financial matters with ministry functions is often very intimidating to ministry leaders whose gifting lies elsewhere. For the willing and the brave, there is help available. It may not be in your staff, but it can be found. Sometimes in capable parishioners or in outside companies with financial expertise that can be had without hiring an expensive staff person. They can help you with implementing a proper system of checks and balances, assessing your cost structure and the production of meaningful reporting.
A motto at one church is “Excellence honors God and blesses people.” The abundance of money does not equal excellence in ministry. However, if excellence is not a quality of the“way” church finances are stewarded, then it will be very difficult to have excellence of ministry. Show me a church whose leaders are haphazard about the management of church finances and I will show you a church that is falling far short of their potential to “bear much fruit.”
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Posted on
Mon, January 3, 2011
by Hugh Morgan