7 Questions Pastors Should Ask About Church Finances
For many ministries, the topic of church finances remains taboo. It can be uncomfortable to talk about at any level, especially when it comes to confronting your congregation about your donation requests and requirements to keep your doors open. With that said, money doesn’t have to make for a difficult conversation and, in fact, you should have higher expectations within your church.
So, here are seven questions you should ask yourself about your church’s finances to make sure you’re on the right track.
1. Are you taking the right approach to talking about generosity?
The topic of generosity and giving should get you excited, not make you nervous. It should do the same thing for your congregation, which means you must approach it in a way that’s inspiring. Below are some tips for making it part of the conversation without making it center focus:
- Inform people on what the Bible says about money. People are genuinely curious, although they may not know where to look or how to ask.
- Be generous yourself. Many pastors are uncomfortable talking about generosity because they aren’t very generous themselves.
- Don’t make false promises. God’s blessings do not always come by way of financial reimbursement, and you should make that clear in your preachings.
Remember: Practice makes perfect. You need to get in the habit of talking about generosity openly and comfortably. When you’re able to approach it with confidence, it will make the discussion easier for everyone involved.
2. How can you be using giving statements more effectively?
Giving statements are necessary for tax purposes, but they’re also highly effective tools when it comes to demonstrating transparency and impact. If you use your giving statements correctly, you should be able to confidently show them to donors (and potential donors), knowing that they’ll show your church putting its values into practice.
Aside from making sure you include the right information in your giving statements, you should also think about how you present it. Storytelling is a powerful tool in bringing data and numbers to life.
3. Do you have an adaptable budget?
Donations aren’t steady throughout the year and neither are expenses. Your budget should be planned in advance and it should account for both spikes and lows when it comes to what goes in and what goes out. You’ll be able to estimate these trends by looking back at reports from the past 2-3 years.
4. Are you supporting underperforming ministries?
Let’s face it, your church has limited resources and you need to make sure your limited budget is stretched as far as possible. Unfortunately, that sometimes means cutting programs if they aren’t justifying the expenses associated with operating them.
To ensure you minimize cuts and maximize results, your ministries should have strict metrics and timeframes in which they need to hit them. Applying KPIs (Key Performance Indicators) and educating ministry leaders on them is a good start to achieving higher operating efficiency.
5. What are you doing to support good stewardship?
Having the right security practices and checks in place is essential. Beyond preventing fraud, your church should also be very transparent with donors about how money is being handled. Regularly educating your personnel about best practices in handling transactions and accounting procedures is vital. It will help you track every dollar that comes in and goes out.
Beyond that, you should also regularly generate reports and compare expenditures to your budget. You should also make sure you’re hitting your financial targets. That’s what good stewardship is all about.
6. Do your church finances account for emergency expenses?
Most churches don’t have a rainy-day fund, and that can spell trouble when an unexpected expense comes up. It could be a repair you need to take care of around the church grounds, a sudden slump in donations, or something else. Whatever it is, if you lack an emergency fund, it could majorly set you back.
Churches that don’t have an emergency fund would have to turn to credit cards, loans, or even personal funds to keep their church afloat amidst unsure circumstances. Ideally, you’ll delegate at least 2% of your church’s income each year to a savings account.
7. Why do you expect people to keep donating?
Every pastor knows that they need to sustain their existing donors and maintain a steady influx of new ones if they want to grow their church and better service their community. However, very few pastors have actually sat down and made a plan to attract and engage donors in today’s climate.
Ultimately, donor management can be overwhelming. Still, it’s an absolutely critical activity within your church and one that requires ongoing attention. Fortunately, DonorWerx can help. Reach out to our team for information about how our software and consulting can transform your ministry’s financial stability and well-being. Getting your church finances in order doesn’t have to be overly complex!
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