Church Financial Accountability – 4 Reasons to Pursue ECFA Accreditation

Managing a church has many of the same challenges as managing a business and requires a lot of the same business processes to be successful.  Church leaders pursue their call to lead a congregation and may have lots of training in theology and biblical principles but may not have basic business training that is required when you manage people, time and money.

Because of this, churches need help in developing systems and processes to fulfill their mission but also to ensure responsible stewardship of God’s money.  We have all heard stories of churches that were the victim of embezzlement,  have gotten into trouble for not complying with state or federal regulations as well as churches that may have had financial problems.   I believe in all of these examples, issues arise more out of ignorance of the proper way of managing resources rather than intentional neglect.

The good news is there are organizations available to help the local church with their financial management practices.

The Evangelical Council for Financial Accountability (ECFA) is an organization that is dedicated to helping Christian organizations earn the public trust by adherence to their Seven Standards of Responsible Stewardship, which focuses on board governance, financial transparency, integrity in fundraising, and proper use of charity resources.

Similar to the Better Business Bureau for Businesses, ECFA requires compliance with standards that demonstrate responsible management of resources and through accreditation gives members and the public assurance that donations are managed appropriately. The standards were developed through biblical principles and provide support and direction for Christian nonprofit organizations.

Anyone who has never been through an accreditation, may find the process a little intimidating at first but committing the time and resources to fulfill requirements is well worth the gain of knowing that donor resources are managed properly.

4 Reasons to Pursue ECFA Accreditation

1.  Focus on the Mission

The accreditation process encourages and supports articulation and documentation of the mission of the organization.  This step reminds organizations of why they do what they do and encourages a focus on that core mission.

2. Church Management Help

The beauty of the ECFA standards is that they walk you through good governance and responsible church management practices.  The mere application process forces organizations to think through how they manage, assess their systems and processes and documentation -which helps ensure a focus on the core mission of the organization.

3.  Accountability

Complying with the standards will naturally result in accountability because it uses objective outsiders to help ensure strong governance and good business practices.  Maintaining the accreditation forces accountability by continually demonstrating responsible stewardship and keeps organizations on track through documentation of practice.

4.  Credibility

Organizations that go through the accreditation process, and follow the standards of accountability, demonstrate responsible management practices, transparency and disclosure which translates into credibility with members, donors and the general public.  Placing the ECFA seal on member websites and other marketing material gives donors confidence in giving.

When I worked in health-care, we went through Joint Commission accreditation every three years.  This accreditation process ensures that hospitals and like organizations provide safe and quality clinical care.  The process is an exercise of reviewing policies and procedures as compared to practice that ensures that day-to-day practices lined up with what the organization puts in writing as standard protocol.

Basically ensuring that the hospital does what they said they will do to ensure good patient care. Hospitals that don’t spend the time or energy to go through the Joint Commission accreditation process have a disadvantage of not policing their practices – which can ultimately affect the quality of clinical care.  Knowing what I know, I would not go to a hospital that does not have Joint Commission accreditation because there is no objective oversight process for ensuring quality care.

In the same way, having ECFA accreditation for your church or other christian nonprofit provides donors with assurance that the organization has an effective governance and management process to ensure good stewardship of funds.  Taking the time and energy to achieve accreditation is a great way to earn the public trust and confidence.

ECFA also has some great book resources, Church and Nonprofit Tax and Financial Guide: For 2013 Tax Returns and Minister’s Tax and Financial Guide: For 2013 Tax Returns.  Both books easy reads with lots of valuable information that can only help you and organization.

Originally published February, 2010, updated March 2014.