The Bottom Line

Rev. David Bennett
Director of Mission & Development
bennett5000@aol.com
December 2011

    

As another year approaches an end, many churches evaluate their ministries from the previous year.  The extent of evaluation many pastors perform on their finances is income verses expenses and net profit.  The problem is that while this may be the “bottom line” (financially), “profit” (or lack thereof) is the result behavior throughout the year.  What a church and pastor does, produces financial results.  Tactics, whether proactively determined or randomly occurring, produce the financial results churches receive.

The following is my list of questions that help evaluate the financial ministry of a church.  The point is not to give specific systems, but to provide a list of systems a church could use to evaluate why the church is getting the financial results that it is.

Income

What system is in place to increase weekly offerings?

What system is in place for funding large projects?

What system is in place to receive estate donations?

How are major donors cultivated?

How are “mid-range” donors cultivated?

What does the church do to encourage people who aren’t giving, to give?

What situations cause the church to take special offerings?

What system is in place for receiving offerings?

What safe guards are in place to ensure the safety of the money until the money is in the bank? (Overall what happens once money is received until it’s deposited)

What safe guards are in place to prevent stealing offerings (screening counters, systems)?

What is the trend in giving (1 yr, 3 yrs, 5 yrs, 10 yrs)?

What is the trend in the number of tithers? (How many tithers does the church have?)

What percent of the church tithes?

Is this percentage increasing or decreasing?

How often does the pastor teach on stewardship?

What are all the sources of income?


Expenses

What are the expense trends?

Are offerings covering church expenses?

Is total income covering expenses?

Is spending aligned with vision/mission?

How are expenses communicated?

How often are expenses communicated?

How is the budget presented to the congregation?

What system is in place to track income and expenses?

How often is an internal or external audit or review completed?

  

Cash Reserves

Does the church maintain adequate reserves for emergencies?

Does the church maintain adequate reserves for the cyclical nature of annual cash flow?  

 

Long-Term Reserves

Is there funding in place for long-term goals?

What policy is in place to invest money for long-term goals?

Does the church have money set aside for ministry opportunities?

 

Risk

How long has it been since the church had a complete insurance review?

What liability insurance is in place on the property, board and staff?

What plans are in place to cover the loss of a key employee?

 

Goal Setting

What goals are in place that will require money and planning to achieve? 

 

Church Values Surrounding Money

What values does the church and leadership have about money (what is important about money)?

What are the greatest fears the church and leadership have about money?
 

Mission Giving

What missionaries and mission organizations does the church support?

How does the church determine which missions to support?

What percentage or dollar amount is given to missions?

 

Financially Serving People

How often are personal financial training events offered?

How does the church help its members in financial need?

 

Taxes

Pay your quarterly, withholding taxes.

Make sure your W-2 employees are treated legally as W-2 employees. 

 

For additional information or to schedule a 30 minute consultation helping you determine which of these questions will have the greatest impact on your church or talk about specific systems for your church based on a specific question, contact Michele Prater at 925-277-3980 or michelelprater@aol.com.