Discussing the budgeting process with the Church treasurer (CT) of a friend’s congregation, I realized this church uses a formal process with a team receiving all the financial information who process all data provided by the staff and reporting back quarterly. I was surprised to find out that there are really two financial officers in the congregation who work with the financial team to oversight all finances and better control them after a series of difficult challenges in the past. Each ministry has a designed budget managed by the director of that ministry. If extra money is needed after the budget is spent, the director needs approval by written.
The CT informs me that after using the new approach to budgeting, dividing it between all the church ministries, savings and transparency have increased. The use of a budget per ministry allows the staff using money with certain flexibility under a pre-established limit.
Because of the strict policies to manage the budget, leadership started a series of sermons on stewardship for the staff and members. This led me to ask the CT about what makes a church financially health in his opinion. For the CT a healthy church in terms of finances is a congregation that works towards a goal while receiving financial support to do so, managing available resources in the best way possible. He emphasized the importance of community in raising funds and supporting particular projects (literacy small groups, financial help for church members with debt, a food pantry for the community) and not only the general ministry fund. In this respect, my friend’s congregation considers all finances are healthy when the available income is more than 90% of the expenses. They think a deficit of 10% is a workable amount.
My Own Reflection
Based on my conversation with the CT, I observed that the idea of having a small deficit is not problematic at all. I was concerned about this idea because it can promote the belief that financial resources will always be available when needed through donations and investments done by the church. Something I really liked, however, is that the quarterly report the financial team prepares is now distributed to the whole congregation. This allows the church to emphasize financial transparency. This has been an improvement because for many years, my friend told me no information was given at all.
With the support of a local foundation, this congregation also started a financial literacy small group for members of the church. I note this a great step and it will help both the church and the people in paying more attention to the health of the finances. Along with this project, the church leadership has approved a fundraising course for the staff, especially those with leadership positions. I had the opportunity to talk with one of the pastors who took the course and informed me that his perspective on asking money has changed, something that has brought some benefits to the church finances as well. This conversation showed me the centrality of promoting stewardship and money management within the church. It’s simply a must-have!
In a nutshell: The old idea that covering all expenses in an organization makes a church financially healthy is not true at all. There are also other aspects that must take into consideration such as consistent good management, a ministry that serves faithfully to God’s kingdom and the community through programs and services.