Finance Fridays: Optimizing Church Finances

I spend most of my week with ministries.

Most of my time with ministries is spent talking about money or the lack thereof.  Today, I want to break down these day long conversations into a simple discussion of income and expense optimization. Granted, I will be oversimplifying but the overall concepts will help guide your thinking.

Optimization of a church’s finances really comes down to two things:

Increasing Income

Be Creative: Some ministries can get very creative by opening businesses, leasing property, etc to increase income. My advice here is to be creative but also cautious: anything that takes your focus off the main goal of your ministry (hopefully reaching the lost and discipling believers) has the potential to take over your ministry.

Stewardship and Capital Campaigns: While many firms are getting away from the idea of the traditional three year specified needs oriented campaigns (building campaigns and the like) and going to other models, special need based fundraising is still viable when looking to do a facility related project.  Many churches are still able to raise in excess of two times their normal annual giving through a multi-year campaign.

Focus on Generosity: The national averages are staggering, and even if your church is above average (of course it is!) it’s very likely that not everyone in your church is giving as much as they should/could.  Looking for ways to increase this is almost always worth while, especially when considering an expansion or building project.  Ways to tap into these givers vary, but you need to be considering:

  • At least three messages a year, be it a single series or spread out, on stewardship and the importance of giving.
  • Offering personal finance classes from Crown Financial, Dave Ramsey, or others.
  • Offering additional ways for your congregation to give: online giving, ACH, giving kiosks, and legacy giving.

After you’ve ensured that people have been given resources that help them maximize their giving, the other side of the coin is ensuring that you are being a good steward of those resources.

Control Expenses

The two primary expenses for most non-profits are facilities and personnel.  While this varies from one ministry to the next it’s not uncommon to see the combination of these two lines account for around 75% of total budgeted expenses.  So any effort to control expenses must start and end with an eye on the people and the place.  How can we maximize efficiency and good stewardship here?

Unleash Volunteers: Don’t hire for positions that your volunteers can do!  Many churches rely heavily on volunteers to do everything from leading worship to cleaning the facilities, while others will hire  for any task that needs to be done reliably.  Each church needs to make a decision about how it handles this but when looking to control costs always ask “are we paying for someone to do something that a volunteer might gladly do just as well?”

Use Consultants: Many churches have institutionalized roles that could be done better and cheaper by outside firms. Bookkeeping, web design, media, and other services have turned into full time positions at churches when they could often be done BETTER and for LESS by hiring a professional firm, outsource it!

Utilize Facilities Fully: Modernizing your facility through adding insulation, low-flow water fixtures, and more efficient lighting will lower utilities and even insurance rates.  Once your facility is more efficient you can squeeze better stewardship out of it by considering how many hours a week is it available for other uses.  This is where many churches start a daycare, after school program, counseling center, or other ministry that allows for additional income and facility usage when it would otherwise be sitting empty.  In my area, several churches have even opened their buildings on Sundays for other ministries to hold services which reaches people they may not.

The better your ministry gets with stewarding the resources that people entrust to you, the more willing they are to give.  All of this is only important if we remember why we do what we do.  The church is not about raising funds, controlling expenses, or utilizing buildings: it’s about reaching and discipling a lost world.  Church leaders are obligated to use the financial resources we’ve been given wisely.

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