The economic climate has been a test and a financial strain on every aspect of our culture and the church is no exception. More and more churches are having financial problems and need help figuring out the best way to manage their resources in these uncertain times.
Church leaders across the country are scrambling trying to figure out how to maintain operations with decreasing donations while steadying the ship for church members. This can be a challenge because the day-to-day operational needs of a church can be significant and juggling limited resources can be stressful.
6 Tips for Church Financial Management
1. Strategic Planning
Developing a strategic plan is one of the first steps in strong financial management and taking the time to set a course and develop church goals and a plan to get there is key. The value in developing a strategy is that it takes all aspects of the church operation into consideration and allows for designating resources toward those critical areas that will sustain and grow the ministry. A well thought out plan also takes into consideration those financial policy and reporting measures that are necessary for responsible financial management.
2. Realistic Revenue Projections
Many churches are tyring to operate with less revenues and should be making realistic projections of donations. Another strategy might be to consider bi-annual or quarterly assessments of projections versus actual in an attempt to maintain financial targets for the year.
Budgeting is critical for successful financial management. Church budgets are a tool that helps leaders achieve objectives and control unallocated spending. Taking the time and committing the resources to creating a church budget can have a significant affect on the financial health of a church and can provide the necessary tools to keep the church on target.
4. Oversight and Accountability
Once a budget is set, oversight and accountability for adhering to the budget is important because it keeps the organization from spending resources that are not allocated. Department managers are responsible for variances and adherence to the budget. The Church Finance Committee, coupled with a strong performance management process, is a great way to ensure accountability for budget spending and oversight.
Be open with the congregation and solicit help from church members on cost saving ideas, strategies for raising funds and make them aware of challenges. As difficult as it is to present the cold hard facts, a church community loves to rally around a cause to help resolve problems. Have a good communication process, share budget information and provide avenues to answer any church financial questions that members may have.
6. Be Prepared for a Church Financial Emergency
Have a plan in place in the event of a church financial emergency and use positive profit margins to fund an emergency account. Having a buffer allows the time needed to make adjustments and necessary spending changes in the event of a true financial emergency.
Many church financial problems can be avoided by good planning, strong budgeting and accountability for spending. Church leaders should embrace structured processes to ensure the resources are available to keep the organization in the black and moving forward regardless of the economic climate.
photo by: 401K