I was a bit surprised that an article about church finances made it into my top 10 for 2018. But it just goes to show that finances are a pressure point for church leaders and when a church’s resources are misaligned it can be lid to growth.
Churches get funny when it comes to money. Generally, churches have a hard time talking about money publicly and few have a clear generosity strategy. When it comes to financial planning and actually spending money in a way that gets them to the vision God’s called them to, the majority of churches I’ve interacted with are all thumbs.
Here are 4 ways I’ve seen churches misspend money and a couple of ideas to hopefully challenge your thinking.
Budget on Hope
I’ve interacted with too many churches that build their budget based on hope. Instead of budgeting based on the previous year’s actual financial performance, they forecast future financial growth on their gut or their version of “faith.” Churches that budget this way often experience little financial margin, budget freezes, hiring freezes, and even layoffs. If this is your church, I’d challenge you to take a wiser approach to money and keep in mind that Proverbs is in the Bible too.
No Cash Reserves
Some churches live hand to mouth financially. There are a lot of reasons this happens. The real danger in living hand to mouth financially and having little cash reserves on hand is that churches unknowingly put themselves in a position that doesn’t allow them to follow Jesus. By not carrying 6-8 weeks of cash reserves on hand not only are you unnecessarily exposing your church to financial risk in lean moments, but you are also not positioning yourself to say yes to opportunity that Jesus may bring your way.
Too Much Cash Reserves
You may have just read that and thought to yourself, “This guy is crazy, I’m never reading this blog again!” How could a church possibly have too much cash in the bank? When churches choose financial security over taking risks and following Jesus…It may be time to take some of that money out of the bank and fuel somethings that could reach some new people for Jesus.
Build the Budget Based on the Past
I’ve found that many churches keep the same basic financial line items year over year with little change throughout the years. Carrying those line items forward consistently and allocating based on the past instead of aligning money to new vision can be dangerous. Great budgeting starts with vision clarity. Once you have clarity about where you’re going building a calendar that reflects your strategy about how you’re going to get there is next. Once that’s complete, budgeting becomes fairly easy because money is just the fuel that funds the strategy that gets you to your vision.
Posted in Leadership