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5 Indicators that your Church is Financially Overextended

money stacked coins

Earlier this fall in a post entitled “Breaking Through your Capacity Lid,” I wrote that financial shortfalls at churches can limit opportunities. I suggested that there are two sides to finances in a church setting. One is building a culture of generosity in your church and then the other is managing that generosity so you position yourself organizationally to say yes to Jesus when He provides clear vision and opportunity

Immature organizations over extend themselves financially and self impose artificial lids as a result.

In a time of year where most churches are finalizing budgets I thought it might be helpful to share some indicators that I’ve observed in churches that are financially overextended.

#1 Your Staff Salaries are not Competitive

If you’re not able to be competitive with your salaries you’re not going to able to attract and keep the talent you’re hoping to have on your team. This is an indicator that you’re financially overreaching somewhere. Not sure how much you should be paying your staff? This post will help.

#2 You’re spending more that 50% of your income of Staff Salaries

As strange as it may seem, if more than 50% of your income is being spent on Staff salaries then you’re staffing costs are beginning to constrict other ministry areas of the church.

#3 Low Cash Reserves

In my work with churches across the country I’ve discovered that if you have less than 8 weeks of undesignated cash reserves available at any given time you probably have too little financial margin to deal with unforeseen obstacles and set backs.

#4 High Debt Levels

Again, in my work with churches through the Unstuck Group I’ve discovered that if your church is carrying more than 2x your annual budget in debt than your debt load is beginning to constrict ministry opportunities.

#5 You Can’t Say Yes to the Opportunity Jesus is Giving You

If you can’t say yes to the vision Jesus has given you then your church is financially overextended. The bottom line is fairly simple. If Jesus has given you a clear vision to lead the church towards then part of your responsibility as a steward of that vision is to build (or enlist others to help you build) a financial strategy that will get you to that vision.


Posted in Leadership

One Response to “5 Indicators that your Church is Financially Overextended”

  1. Robbie Miller December 19, 2015 at 12:57 pm #

    I would add that a huge problem is begging for money to pay debt when a ridiculous amount is spent on questionables like expensive meal, golf game, and travel reimbursements for the pastors, salaries for staff who don’t show up to work, and completely unnecessary decorations, when there is almost no money spent for outreach. I have also seen that churches and “ministries” who choose a lack of transparency as to where the money goes are the most likely to also be financially overextended.

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