Church Finance: Where Endurance Matters
Some folks see serving their church in a financial capacity as boring or mundane. Many who love our wonderful liturgies and extraordinary music on Sundays have no desire to deal with the ‘gory details’ of budgets and finance. What they may not realize is the satisfaction that comes with knowing that your service is necessary and its results lasting.
I’m serving on my church’s vestry for the second time in ten years. Between vestry terms, I was parish treasurer for seven years. Over these almost thirteen years I have seen the value, importance and, yes, the spiritual fulfillment of dealing with the day-to-day operating problems and financial challenges faced by an Episcopal congregation.
During this period, we have engaged in a major capital campaign to expand our church plant, built and installed a magnificent new organ and established an outreach fund. We took on substantial debt to complete this campaign, which a second capital campaign paid off. We have also installed a new rector and seen our annual budget grow to almost $2 million. Being part of all this has brought emotional highs and lows, as well as intellectual and spiritual challenges. But above all, I am amazed at the quality and humility of the people with whom I have served.
If you are currently serving (or considering serving) as a vestry member or treasurer, here are some thoughts on financial topics that you will likely encounter over time.
Stewardship and budgeting
There is always the age-old challenge of creating and funding the annual operating budget. How do you inspire people to pledge to that budget with the same enthusiasm they display for an exciting capital campaign? Don’t we give impassioned speeches each year about the electric bill, the air conditioning units that may fail at any time and the potentially leaky roofs? Our messaging suggests that the place will fall apart without your pledge. Then the next year comes around, and it turns out that the electricity has stayed on, the air conditioning kept working and the roof didn’t leak after all.
We are at some level the child who cried wolf (though we could always have an ‘air conditioning free’ Sunday in August to drive home the importance of maintaining that system). There is no magic answer except to continue communicating how important it is to fund the church’s day-to-day operations. Mundane as it may seem, funding operations is a catalyst for fulfilling our mission to seek and serve Christ in all persons. Beyond the current moment, if we do not maintain our facilities, young families will look for a better environment for their children, imperiling the long-term future of our churches.
The annual budget is a challenge as well. No matter how much your revenue grows, expenses can appear to grow even faster. I have seen up close the challenge in church budgeting, which is to come as close as possible to breaking even. If revenue exceeds expenses by too much, you may have short-changed valuable ministry options. If expenses exceed revenue, you will have to use limited savings—or even borrow funds—to bridge the gap. With a $2 million budget, missing the mark by just three percent either way is a swing of $60,000, a daunting amount for even financially blessed congregations.
This is why it is critical to have a committee of knowledgeable, dedicated people to monitor budgeted vs. actual results for the line items on your church’s monthly statements. If you have a financial or accounting background, you can offer no greater service than to volunteer for this sometimes thankless and often invisible job.
The good news is that it is often easier to raise large sums quickly for exciting new projects like an organ or a new building than for routine operations. The bad news is that you will likely need every penny raised as costs rise higher than anticipated. Financial and budgeting abilities are as essential as fundraising skills in capital campaigns. Monthly reports that give pledged amounts, amounts actually received, current expenditures budgeted, and current actual expenditures are imperative.
Internal control and audits
Good financial stewardship is an absolute requirement, and separating the various duties as much as possible is key. The treasurer reports on the finances of the church. Others should be designated to actually handle the money—making deposits, counting cash from the offering and signing checks. More than one person should be involved, especially in the disbursement of funds. Proper internal controls ensure that donations are used as intended and that the long-term financial health of the church is on solid ground.
An audit should be conducted annually. If your church is large enough to warrant additional oversight, a public accounting firm should be retained. The vestry should carefully review the audit report and implement its recommendations where possible. If your diocese facilitates the sharing of knowledge among congregations, I recommend taking advantage of this resource. I wonder how much reinventing the wheel might be avoided if church treasurers and business managers shared ideas on a regular basis.
The long view
Without proper financial stewardship, your church wouldn’t simply be different— it wouldn’t exist at all. Working with your church’s finances is unlikely to be a flashy sprint, but to steal from the Epistle, it can make you a marathoner, who runs with endurance the race set before you. So dive in and crunch those numbers with passion. You won’t be sorry, and neither will your parish!
Robert Button is a vestry member at the Episcopal Church of the Transfiguration in Dallas, Texas. He works as a Senior Project Manager at Thomson Reuters and is a Certified Public Accountant.
- Lessons from a Rookie Treasurer by Tyler D. Schleicher, Vestry Papers, May 2014
- Manual of Business Methods in Church Affairs published by the Episcopal Church
- Accounting Software: Finding the Right Fit by Phyllis Jones, Vestry Papers, May 2014
- Basics of Church Financial Reporting - Part 1 by Jerry Keucher, Vestry Papers, March 2017
- Basics of Church Financial Reporting - Part 2 by Jerry Keucher, Vestry Papers, March 2017
- Fearless Finances - Parish Budgets an ECF webinar presented by Donald Romanik and Jerry Keucher, October 13, 2016