Determining Which Ministry Gets What

"Pastor, we don't have a budget. We just do what the Lord leads us to do."

These words were spoken to me soon after I agreed to be the preacher at a small rural congregation, which used seminary students to fill the pulpit. When the church voted to hire me, they called me "pastor," but I did not function in that capacity. I was at the church only on weekends, and they knew I would probably leave as soon as my seminary days were over.

As an idealistic young student, I liked the thought of having no budget; it created in my mind the picture of a congregation sensitive to the Lord's leadership, without the bureaucracy associated with a budget.

After a few weeks, I mentioned to one of the leading men that I intended to introduce a new ministry in the next church business meeting, which was held at the conclusion of worship. This man asked me several questions about the ministry idea.

Then he said, "Don't bring up your idea this month. Wait at least a month, until I've visited with some of the men of the church. Your idea has merit, but it may not fit in with what some members think."

I found out later that he had called two other men, and they had talked about my idea. They had looked over the church's financial condition and decided I shouldn't broach my idea in the coming business meeting.

I realize now that these three men were not stubborn or unreasonable but practical. My idea wasn't that great, and the church was in more need of other ministries.

What I especially learned, though, was that the church did have a budget! It was in the mind of the three leaders who in conversation determined the financial priorities of the church.

A church budget is simply someone's priorities for use of church funds. These may or may not be the congregation's priorities, or even the present leadership's, but someone or some group has priorities that determine how money is allocated.

Since every church has a budget, we are wise to recognize it and consciously shape it. It may be efficient when a select two or three determine the budget, but it is not healthy.

Of course, once you open up the process to the congregation, even through their elected leaders, you've got to answer the question, "So, how much should we give to each ministry and line item?" Answering that question is not always easy, but it is what setting a budget is all about.

Here are some principles I use in helping a church settle that question.

Prepare Yourself

The extent to which the pastor has input in this process depends upon the policy of the church, the tradition of the particular congregation, and the leadership style of the pastor. In order to be effectively involved in the budget process, I found I need to answer the following questions:

• Who really sets the budget? Most churches use some type of committee structure to formulate the budget, but a "paper-chase" study of these committees' duties does not usually explain who really determines the budget.

In many churches a budget committee, or a sub-committee of the board, has each church committee and organization turn in their projected costs for the year. The finance committee then evaluates these and puts together a total budget for the church.

In some churches, the finance committee does little more than total the figures turned in and determine how the budget will then be presented to the church. In other churches, the finance committee looks at each committee's or ministry's reports and then evaluates them in terms of church-wide goals and objectives, and, as a result, may alter those figures.

In either case, in most churches, the budget is pretty much set early on by committees or the leaders of those committees. If I want to have input into the budget, I must do it in the right place at the right time.

A pastor friend who moved to a larger church had saved his vision-and-dreams speech for the budget planning meeting of the finance committee. He was frustrated when his ideas had little impact as the committee gathered and tallied figures. It will take another year for his concerns to be reflected in the budget.

He not only needed to begin earlier, he needed to discover who really determined the budget—leaders in each of the committees—and talk with them first.

• What does the budget reveal about the church's ministry priorities? I have to understand the actual values of a congregation before I can effectively influence the budget process. And often the budget is the best indication of what the leadership values.

One church I know of has always said that it is a strong missions congregation. A quick glance at the budget seems to confirm this, but a closer look reveals that most items in the mission section of the budget are not really "mission support." It turns out that anything the leadership wanted but thought might be difficult "to sell" to the church was labeled missions.

As a result, the mission section of the budget was bulging with children's and preschool ministry activities. The new minister of education at the church was at first concerned at what appeared to be a lack of funds for her ministry, only to realize that the actual budget priority and her priority were the same.

• What are the non-negotiables? Recently, a lay leader in another church asked me for advice. He didn't really want advice, I discovered; he really wanted to complain about his pastor.

A certain bank for a number of years had financed all the church projects. The bank had been good to the church and had waived some fees and never penalized the church for late payments. The bank also had given the church favorable interest rates.

But when interest rates declined, the pastor was recommending that the church refinance at a lower rate with another financial institution. The finance committee voted down the pastor's recommendation. The pastor complained that they were not being good stewards of the Lord's money. The committee felt, by honor, tied to the bank that had seen them through tough times.

Idealistically, a church should be responsive and resilient enough to base all budget expenditures around needs and good stewardship. But churches, because they are people, frequently spend because of feelings, rather than objective reality.

These "sacred cows" do not begin as "golden calves." Generally these non-negotiables were at one time effective means of ministry. But there is not much to be said for fossilized, good ideas and ministries that have outlived their usefulness.

As pastor, I must not only discover quickly these non-negotiables, I want to pay tribute to their contribution to the church. If I'm going to suggest a change, it will have to be after I've gained the respect and trust of the congregation.

And it will have to be a change that is based in respect for the past: "In the past, this system has served us extremely well. I'm thankful for the people who put this practice into effect. For the coming decade, however, we may need a new strategy."

• Do those who are responsible for building the budgets understand my interpretation of the church's vision? If the church has a clear and concise mission statement, it makes setting priorities easier, but it does not take away all the difficulties.

Mission statements are subject to interpretation, and often people assume wrongly that because they are on the same page and reading the same words, they have the same pictures on the screen of their minds. But if the leadership does not understand my interpretation of the mission statement, all my attempts to influence the budget will lead to frustration.

One of the casualties of my ministry was a man who in budget committee fought for an issue he thought was important to the staff. He wanted the budget to include a "first class" leadership retreat for the deacons, church officers, and staff. Several factors were weighting the budget committee against this request, including the cost of the retreat and the history of a similar event five years earlier with a different pastor and staff.

This committee member took great risk by arguing for this retreat. After lobbying by phone with the other committee members and eloquently arguing for his position in the meeting, a motion to include the retreat in the budget passed.

The man was soon disappointed when he discovered that none of our staff believed this retreat was essential for the mission of our church.

Looking back, I now realize that when I had visited with him regarding leadership training, I had not fully explained myself. The staff and I believed the church, not the staff, needed a long-term program through which we would identify, develop, and train future leaders. As a result of this misunderstanding, although he did not leave the church, he never again took any significant risks in the committees.

Once the leadership, including me, has a common understanding of where we'd like the church to go, we can begin putting the dollars-and-cents issues on the table for discussion. All through the process, though, I aim to understand the views of the lay leadership. For even at the dollars-and-cents stage of budgeting, although we are now going in the same direction, we sometimes fail to aim at the same specific target. We may agree that evangelism is our highest priority, for instance, but whether we should invest in evangelism training for members or bring in an evangelist for a week is another matter.

Avoiding Traps

How we work out disagreements at the dollars-and-cents stage of finances requires patience, fortitude, and wisdom. Few people are opposed to a particular line item receiving funding in a budget, and as a result, the issues often hinge on the amount line items or ministries receive. In the process of determining how much, congregations can become polarized.

As the discussion ensues, though, the pastor can avoid several traps as the committee or church seeks to determine what receives how much.

• The line-item trap. Someone who places a high priority on youth ministry notices in the budget that the line item for youth ministry is only half of that for the music ministry. This person concludes, with some disappointment and anger, that the church thinks more of music than youth.

Line items in a budget, however, are usually designed for administrative purposes. Taken in isolation, they don't necessarily communicate what a church's feelings are about a ministry. Sometimes you have to dig deeper into the budget to find that out.

In my early months in my present church, a couple of families met with me regarding the lack of funding for the youth ministry. Without fully examining the total dollars available to youth ministry, I hastily agreed with them.

I soon found I had spoken too soon. After some research I discovered that the budget line item for youth ministry shows only about 40 percent of the funds used in the youth program. But many expenses for youth ministry are scattered throughout the budget, under "administration" and "personnel," for instance. The ministry to youth was more important than the line item showed.

• The higher-priority-means-more-money trap. As a pastor and the leadership work through the priorities, they may assume that by giving more money to a ministry they are giving that ministry a higher priority rating. This works on the mistaken assumptions that (a) giving more money is the only way to raise a ministry's status and (b) a church has only one budget.

But every congregation has at least three budgets, and only one is the financial budget. A second and equally important budget is the time budget, which is called the church calendar. To make a ministry a priority may not mean more money but instead involve giving a program a better time slot on the church schedule.

Another budget is the pulpit-emphasis budget. Some priorities, with good time slots and adequate funding, go lacking because they are not emphasized by those who share the pulpit. When properly promoted through the pulpit, though, many ministries can flourish.

Recently, a minister to single adults told me about the turning point in her ministry. A church had called her to build a strong singles ministry. Funding and facilities were provided, but the ministry did not really have the support of the church until the pastor wrote a column in the church newsletter regarding the singles ministry and asked two single people to lead in prayer during worship.

This young minister said that the senior pastor's public endorsement was more valuable than a large increase in funds.

• The easy-compromise trap. Budget preparation time is one of the most stressful times of the year. Competing priorities bring inevitable conflict. In churches with large staffs these conflicts can escalate into ego wars, with staff members becoming battalion commanders and members, the ground troops.

The pastor may try to avoid these conflicts and quickly seek compromises: The missions people and the youth ministry people each want 10 percent increases for their respective ministries, but there is only enough money to give 10 percent to one. Solution? Of course, give 5 percent increases to each.

Often, however, these compromises, although they reduce tension, fail to construct a budget according to the church's priorities. If the church has previously determined that youth ministry was to be the top priority for the coming five years, then the compromise has done the church a disservice.

Certainly compromise is necessary in every budget process, but if everything falls into place without healthy confrontation and discussion of church priorities, it may mean that the official priorities of the church have been put aside for the comfort of church leaders.

• The meaningless-motto trap. One temptation is to have the church's priorities articulated in words and mottoes that have no relationship to reality.

Last year I received a copy of a church budget that had balanced ministry printed across the top of the page. The budget was divided into four areas: evangelism, missions, ministry, and worship. Line items were listed under each area. Each of the areas equaled one-fourth of the budget. It was obvious, though, that someone had spent time adjusting figures and tinkering with the process so that they would be equal.

Although every church does have to seek balance, it is wrong to assume that balance must be measured in terms of equal funding.

Guidelines for Effective Change

The church has difficulty changing because its message appears to contradict the call to change. The message of Christ is the same yesterday, today, and forever, but the careless member may hear that the church is the same yesterday, today, and forever.

The church budget, since it reflects ministry with people, has to be dynamic. It will have to change significantly from time to time. I've never found that pressure, political power, and smooth pulpit rhetoric encourage change as effectively as education, pastoral care—and patience.

In particular, in seeking to help a church make significant changes in a budget, I've found the following guidelines helpful.

• Be prepared for passionate resistance. Any change brings resistance, but change regarding the use of money brings resistance with passion.

People and organizations are dealing with values when they spend money. How we spend our money says a lot (although not everything) about what we believe is important.

At the same time, the church attracts people to whom values are important, and it continues to teach them that values are important.

Consequently, when values-driven people are encouraged to change how they spend their money, there will be sparks. The old line, "Let's not fight over money," doesn't work in the church precisely because we know that money represents something more than dollars.

The pastor, therefore, should not see all resistance as evil. We best encourage change when we allow people to disagree without questioning their virtue or spirituality.

• Introduce the change before you request the change. We pastors often see ourselves as the only one with real vision, and we act as if laypeople never have the courage to do what the Lord wants. I have found, however, that not only are laypeople as courageous as clergy but also that I am less visionary than I sometimes think.

Sometime ago I was in a meeting concerning charitable giving, and one of the speakers discussed the trend toward designated, or donor-directed, giving. I found myself resisting this idea, as I had been a strong advocate of unified-budget giving.

It took about six weeks and a couple of articles in a periodical for me to see the virtues and the possibilities of designated giving. When I did see its value, I discussed it with our finance chairman.

He was opposed to the idea for the very reasons I had been. It became obvious that the idea was not ready to be discussed with the entire committee.

I noticed, though, that I was angry that the chairman, as well as the committee, did not immediately share my enthusiasm! When I remembered my journey, I was able to be a little more patient.

• Go slow with changes in philosophy. Almost any church can be maneuvered or manipulated into making temporary changes in the funding process. Most members can be persuaded to postpone or delay their favorite ministry projects if they believe these projects will soon be restored to their previous levels of funding.

But some changes are not intended to be temporary but indicate a major philosophy shift. To deliberately minimize philosophical changes is not only dishonest, it is shortsighted. Individuals and constituency who have accepted a "temporary" change in the budget process only to find out it is permanent feel violated.

A good rule of thumb: The longer the impact of a change, the slower the change should be paced.

One of my predecessors changed the deacons from being an administrative board (making decisions for the church) to a ministry group (concerned with meeting people's needs). This change, though, removed the deacons from the budget process and permitted women to serve as deacons.

Such a fundamental change, however, didn't happen overnight. This wise pastor led the church to this position over a number of years, and the pace was slow. Now eighteen years later, this deacon ministry is alive and well.

• Let people know where you're going. People who know where they're going are best prepared for intersections and curves on the roadway. Likewise, ease in budgeting is directly related to a clear vision of the destination, and that means a clearly defined mission statement.

I am becoming increasingly impressed with the practical value of a congregation having a church vision, or mission statement. By encouraging the church to participate in formulating the mission statement, the pastor not only builds stronger statements but also gives the members ownership of the church's direction. Then when the pastor addresses the vision from the pulpit, he or she is not seen as a modern Moses chiding people for their failure but as a leader who is holding before them a map showing where together they are going.

I've found that I need to articulate the church vision in a sermon at least once a quarter. In fact, one Sunday each year we call "Vision Sunday," at which I preach about the church's vision. We push for attendance and pull out the "bells and whistles." But at least three other times during the year, I preach on the vision, without labeling it as such, trying to find different ways to express the same theme as on Vision Sunday.

• Listen for underlying issues. Budget battles may not be about money but about someone's personal crisis. The opposition may not result so much from differing priorities as from a hurt or misunderstanding. Often conflicts over a change in budgeting provide an opportunity to find the real issue.

An individual in a church I previously served was highly vocal about a change the budget committee was proposing. This man had used his Sunday morning Bible study class as a platform to oppose the new budget.

When I heard one Sunday afternoon of his abuse of his role as teacher, I was angry and ready to confront him, but his wife called me before I had the chance. She suggested I go by and see him at work, saying, "He really needs his pastor right now."

When I went by his office on the following Monday, he told me of the discouragement he felt about his work and how a remark I had made in the pulpit appeared to be insensitive to people in his situation. At the conclusion of the visit, he told me he owed me an apology for what he had done in the previous day's Bible study hour.

Later one of our older, wiser church leaders explained to me, "Pastor, it's not socially acceptable to stand in a Bible study class and oppose your pastor for his insensitivity, but it is acceptable to oppose the programs your pastor supports."

• Maintain your character even if you have to modify your vision. Vision and mission are changeable. Character is a non-negotiable. Leading a church to redirect its resources will be an ongoing process for the pastor, requiring compromise and a change in direction from time to time. But rarely do you lose your ministry in a local congregation over a disagreement regarding funding.

Sometimes, though, in an uncompromising passion to sell our vision to the congregation, we modify our character. The results are usually disastrous.

A highly respected pastor in one community I served wanted his church to have their own retreat center. He was a visionary leader who could inspire people to follow him. But in the process of selling this idea, he exaggerated the benefits offered by one of the proposed sites, and he publicly lost his temper with one family who questioned him in the process.

The church voted to buy the retreat center, but from then on, the church discussed less his visionary ideas and more his character. He eventually left the church, bitter and angry, even though for several years he had been highly effective.

Our vision can be modified more easily than our character repaired and restored.

Determining which gets how much challenges churches regularly. And helping a church change the level of funding for items is a bigger challenge still. Challenge, of course, puts it mildly.

Still, all of this work—and often it is just that—comes down to helping our congregations accomplish their calling. And helping a church do that, no matter the challenge, is central to our ministry.

Excerpted from "Mastering Church Finances," (Christianity Today International).

Case Threatens Pastor Housing Allowances

Earlier this month, we covered eight federal issues that local churches should watch closely during the remainder of 2010 and into 2011, according to recent remarks from Dan Busby, president of the Evangelical Council for Financial Accountability. Busby, one of our editorial advisors, is based near Washington, D.C. His role at the ECFA includes advocating on behalf of ministry interests on Capitol Hill, so he’s uniquely positioned to see national tax and finance developments unfold that can influence church leaders.

We took notice when we heard the first item on Busby’s list: a California lawsuit, filed by the Freedom from Religion Foundation Inc., challenging the constitutionality of tax benefits associated with the housing allowances that churches provide to pastors.

The significance of housing allowances isn’t lost on church leaders. For decades, churches have used them to recruit and retain pastors. It’s an especially handy tool that churches with limited means, especially small congregations, can use to lure a gifted person. And at a time when the country slogs out of a multiyear recession, it’s perhaps as useful of a benefit as ever. The down economy has challenged weekly giving and strained budgets for many congregations, making pay raises remain small, even nonexistent in some places.

As Richard Hammar notes in his 2010 Church & Clergy Tax Guide:

“The three most common housing arrangements for ministers are (1) living in a church-provided parsonage; (2) renting a home or apartment; or (3) owning a home. The tax code provides a significant benefit to each housing arrangement … The rules … represent the most significant tax benefits enjoyed by ministers.”

Given the importance of housing allowances, we asked Hammar to give us a deeper sense for where the California case will land.

At the moment, the signs aren’t favorable. Church leaders should begin thinking now about a future in which housing allowances for pastors do not receive federal tax exemptions.

In May, the government requested the case be dismissed on the grounds the plantiffs’ primary arguments lacked legal standing. The federal district court denied the request. That means the case now moves forward to trial, keeping alive the possibility of a ruling against housing allowances.

“Given the obvious hostility of the federal district court judge to the housing allowance, it is probable that the court will rule that the housing allowance is unconstitutional,” Hammar says.

If that happens, the case would be appealed to the Ninth Circuit Court of Appeals. Many, including Hammar, believe the Ninth Circuit will affirm a decision against housing allowances for pastors. As far back as March 2002, for instance, the Ninth Circuit announced it would review “the constitutionality of the allowance” in a different case, “even though neither side in the related case challenged the exemption,” according to an article in the Baptist Press. In other words, the Ninth Circuit has looked for opportunities to scrutinize the allowance before.

Should an appeal fail, any other intervention to attempt to reverse it is highly unlikely, Hammar says.

“An appeal from the Ninth Circuit to the U.S. Supreme Court is a long shot. The U.S. Supreme Court hears appeals in only a small percentage of cases, probably one percent or so, so one cannot assume that the Supreme Court will “fix” the problem,” he says. “A decision by the courts that the housing allowance violates the nonestablishment of religion clause would be difficult, if not impossible, to “fix” via congressional legislation … Congress cannot directly overturn a federal court’s interpretation of the Constitution, but it can deprive the federal courts of jurisdiction to hear a particular question, such as the constitutionality of the housing allowance. This power has rarely if ever been used, so it, too, is unlikely.”

That leaves the outcome of the upcoming trial as the best hope for preserving housing allowances.

“This case is of immense significance to the hundreds of thousands of ministers who acquired homes in reliance on this benefit,” Hammar says.

Despite the uncertainty of the case’s outcome, and the tendency for legal cases to continue for months, or even years, Busby suggested in his remarks that church leaders identify the consequences of losing the pastor’s housing allowance benefit and develop a contingency plan now.

Sex Offenders in the Pew

In April 2010, Christianity Today International (CTI) conducted a national survey of 2,864 people, including ordained church leaders (15 percent), church staff (20 percent), lay members (43 percent), and other active Christians (22 percent). Respondents were drawn from the readers of CTI publications and websites. The purpose of the "Sex Offenders in the Church" survey was to explore attitudes and beliefs on whether to allow sex offenders to participate in faith communities. The survey explored what practices churches use to keep their congregations safe when sex offenders are welcomed.

Pastors, lay leaders, and churchgoers overwhelmingly agree that sex offenders who have legally paid for their crime should be welcomed into churches. In fact, 8 in 10 respondents indicated that registered offenders should be allowed to attend church under continuous supervision and subject to appropriate limitations.

Ian Thomsen, church administrator for Arvada Covenant Church in Arvada, Colorado, says, "If we can reach out to sex offenders, and through our efforts change their lives for the better and take a significant risk away from society, we see this as a tremendous challenge—but what a wonderful challenge. We want to take it on."

"Jesus said there's no unforgiveable sin except blasphemy of the Holy Spirit," says Mark Tusken, rector of St. Mark's Church in Geneva, Illinois. "Now that doesn't mean we want to condone sexual crimes. We're not out to hang a shingle that says Sex Offenders Not Welcome any more than we want to hang a shingle that says Come, Y'All. But my prayer has always been that St. Mark's would be a safe place—a place where people can come because they sense the refuge of Christ here.

"That means parents can come without even giving a thought about something happening to their kids, but also that somebody with a sex offense in their past ought to be able to come and fit in and not be judged." In the 16 years that Tusken has overseen his congregation, he has known of only one convicted sex offender attending.

Click here to continue reading Marian Liautaud's article from the September 2010 issue of Christianity Today.

Where does you and your church land on this subject?

To learn more, check out:

- The 2010 Sex Offenders in the Church Survey (a free executive report);
- Richard Hammar's "Sex Offenders in the Church" Feature Report;
- "Sex Offenders in the Church," a training resource for church leaders;
- "Juvenile Offenders in the Church," a training resource for church leaders;
- Reducing the Risk, 3rd Edition, Richard Hammar's training resource for church leaders to prevent sexual abuse.

10 Things Every Church Should Know about Expansion (in 140 characters or less)

Cogun, a North Lima, Ohio-based company that helps churches with building, recently released the "10 Things Every Church Should Know about Expansion (in 140 characters or less)." Here are the first three (you can read all 10 in the brief electronic booklet offered here):

1. Clarity is king. Know who you are, who you're called to reach, and then over-communicate it. This is the rudder that will allow you to end up with the right expansion when it's done.

2. Expansion options abound. Churches can add ministry space in multiple ways--additional services, multi-site campuses, church mergers, building expansion/relocation.

3. Understand the budget. When you build new facilities, the amount for the building itself is only part of the total cost. Non-building costs can add up to 20% to 40% of your total costs.

Read all 10 things in Cogun's e-booklet. Also check out BuildingForMinistry.com, a partnership between Christianity Today International and the Cornerstone Knowledge Network, of which Cogun is a co-founder.

Can Finance People Be Ministry Minded?

Why do committees so often act in a way that seems indifferent to and sometimes impedes ministry? The following practices may explain much of the problem:

—People making financial decisions are removed from firsthand involvement in ministry.

—People who are actually involved in the ministries have little or no input into the budget process.

—Little advance planning is put into the budget process.

—The focus is on the bottom line: How much did we take in? How much did we spend?

—Budget categories from previous years tend to dictate how money will be spent in subsequent years.

—The arrangement of the budget reflects an emphasis on maintaining a physical plant and paying staff salaries rather than fulfilling a corporate vision.

How can we avoid this approach? How can we move beyond seeing church ministry only in terms of budget numbers?

Staff the Finance Committee with Those Active in Ministry

When nominating committees consider candidates for the finance committee, they first look, and not without reason, to bankers, cpa's, and successful business people. Financial expertise is the first prerequisite, not involvement in ministry.

If you want the finance committee to be ministry minded, though, you need to recruit people who are on the front lines of ministry themselves. Only people involved in ministry are going to be ministry minded.

When the need arose for someone to manage the finances of Bellingham Evangelical Free Church, Charlie Culbertson was recruited for the job, even though he had limited expertise in financial matters. For several years, Culbertson had served in Thailand with Campus Crusade for Christ. Eventually he was overseeing ministries on several campuses.

When senior pastor Gus Bess went looking for an executive pastor, it was Culbertson's heart and mind for ministry that made the difference. "The church felt they could more easily hone my financial skills than a heart for ministry," says Charlie.

Some churches take this idea a step further by requiring anyone serving on any committee to complete a cycle of training in ministry first. In my work with churches, I coach them to train people in the basics of the Christian faith and then equip them to reproduce those basics in the life of another individual. Only then will they be asked to serve in advanced forms of ministry.

In the church I attend in Bellingham, Washington, no one is allowed to serve in leadership positions of any kind without first completing a basic course in discipleship. That course includes at least one session on stewardship—and those asked to serve in leadership are asked to model faithful stewardship.

As people involve themselves in personal ministry first, they are better equipped to serve on boards and committees with a ministry mindset.
Communicate Biblical Principles of Finances

Sometimes we who have been steeped in what the Bible says about finances and ministry can forget that others have not. I have found that I cannot take for granted that even long-time attenders of the church have built their understanding on Scripture. Without solid, consistent teaching on the priority of ministry, leaders may well have other values.

Nonministry values are especially tough—and necessary—to overcome when a ministry seems dependent on the bottom line. But it can be done. The church I attend is headed into a major building program. After seven years of existence, over a thousand people attend and ten people are on staff. To encourage people to give to the building fund, the pastor recently preached a series on giving. He had one serious reservation: during his first seven years, he had carefully cultivated a climate for outreach and discipleship; he did not want the focus to change during the building program.

He undercut the natural tendency to focus on the bottom line by emphasizing that our attitude in giving was just as important as how much we gave. The series therefore focused not merely on the giving of money but the offering up of our entire lives to God: time, talents, and treasures. All that we are, and all that we have, he reminded us, has been given to us as a trust.

Throughout the sermon series, various ministries were featured. Testimonies were given during worship. The pastor consistently shared stories about opportunities for ministry in the new building.

In short, as important as they were, the enormous financial needs of a building program were not allowed to take precedence over people and ministry.

Devise a Plan for Ministry

A finance committee is much more likely to be ministry minded if it's in a church that is ministry minded. That requires an overall plan for ministry. Here are some of the fundamental but often overlooked principles I follow in helping churches develop such a plan.

• Define the congregation's purpose. "More failures in the church come about because of an ambiguity of purpose than for any other reason," observes Howard Hendricks, professor at Dallas Theological Seminary in Texas.

A good mission statement answers the question, "Why do we exist as an organization?" or as I like to put it, "What on earth is the church supposed to be doing, for heaven's sake?" The mission statement of a church is the foundation upon which every ministry program is established.

• Nurture vision. I often travel on the Washington State ferries. Recently I was standing at the stem of one of these ships as it departed Edmonds, Washington, headed for Kingston.

A woman began to walk away when her husband asked her, "Where are you going, dear?"

"To the front of the boat," she replied. "I want to see where I'm going, not where I've been."

Actually, if you look at a ferry boat from a distance, it's hard to discern whether that vessel is coming or going, because the ship looks the same from both ends.

Some churches don't know whether they are coming or going. Others focus on where they've come from. In either case, faulty vision will impair effective ministry. Kennon Callahan, author of Twelve Keys to an Effective Church, observes that "Growing churches believe that their best days are ahead of them … declining churches believe their best days are behind them."

The vision of a church is its dream for ministry. And it is the role of leadership to keep that vision before God's people: "Where there is no vision, the people perish."

A key way to develop vision is to ask, as I did at my last church when I arrived, "What kind of church do we want to be five years from now?" When taken seriously, that question will have profound implications for administrative structures, staffing, and facilities.

• Set congregational goals. After setting corporate vision, set specific goals to begin to move toward realizing that vision. Webster's first definition of the word goal is "the terminal point of a race."

A goal is a specific plan to achieve a specific result within a specific time period. A typical church goal would be introduced by the phrase, "During the next twelve months we plan to …" Goals should be revised regularly in order to keep pace with a changing environment.

In any case, a goal is a statement of faith, giving concrete expression to what we believe God is leading us to accomplish.

• Determine priorities. Not all goals can be accomplished at once. A ministry-minded church must sort priorities, determining which goals to pursue first, second, and third: "Do we build a building first or hire a staff member?" "Do we increase our giving to missions or add an outreach locally for youth?"

One of my cardinal convictions is that staff should take priority over programs and facilities. Staff will establish programs that will minister to people, and then buildings can be built to accommodate the needs of a growing ministry.

Priorities must also be established within every area of the ministry. Should the youth ministry department invest its time and resources in major events or in small-group ministry? Should the music and worship team do a major cantata this Christmas or develop a traveling music group?

If someone left $100,000 to your church in their will, what would you do with it? Answering that is a good way to start taking seriously the need for establishing priorities. It's a way to get people to see that they don't have time and money to do everything at once.

• Develop a plan of action. As we prioritize our goals, we must also develop a specific action plan for achieving them. A strategic action plan will define the action steps for each goal area, the deadline for carrying them out, the person responsible for each action step, and the budget needed to carry it out.

In a church that is ministry minded, then, the financial considerations come last. Ministry planning begins with purpose, moves through dreams, goals, priorities, and plans. Only then comes consideration of the dollar. When churches follow this outline, finance committees are biased to become ministry minded.

Let Ministry Leaders Determine Needs

It's vital that the budget process begins not with how much money a church has or can expect to have but with the needs it wants to meet. I've seen at least two ways to do that: from the top down and from the bottom up.

At Hillcrest Chapel in Bellingham, the budgeting process, described by administrative Pastor Bob Patton as "ministry driven," begins with the elders, which includes the pastoral staff. Their conviction is that the vision for ministry comes from the pastors, as God guides them. Staff members work with lay leaders to derive a plan for ministry, which results in a budget proposal to the church board.

The congregation ultimately reviews and approves the budget, but the kinks are worked out well in advance of the vote. Needless to say, this process begins well in advance of their congregational meeting. As a result of this well-orchestrated process. Hillcrest has not had serious conflict over the area of finances in the past fifteen years.

Across town at Immanuel Bible Church, the process begins with the rank and file of ministry. Marc Mullen, the church chairman, explains that people directly involved with a ministry help formulate the budget with those who oversee their ministry. For example, the leaders of junior high ministry would meet with the overall leaders of the youth ministry. An elder and a staff member are usually a part of these discussions as well. Budget figures are determined not only by needs but also by the goals and objectives of each ministry.

In addition, office staff submit their budget requests for office supplies, and the nursery coordinator requests her budget for disposable diapers—details that no pastor or finance committee is in a position to know about.

In either case, it's people involved in ministry, at one level or another, who decide what the church really needs in the coming year.

Plan for More and for Less

When a church is prepared to answer the questions, "What will we do if we have more money than expected?" and "What will we do if we have less?" it will keep mere numbers from dominating the discussion when those contingencies arise.

Bethany Bible Church in Phoenix has such a plan. Dick Stunden, the church administrator, says they always have more needs than funds available. If they project $975,000 income but receive from various ministry departments requests for $1,000,000, they will generally plug in an extra $25,000 into income as a "faith factor," trusting God for the difference. If the difference is greater, they begin restructuring the budget.

If they do have to cut back, then they let the individual ministries decide how exactly they will do that. If the youth commission, for instance, has requested $40,000 but only $30,000 becomes available, the board kicks the decision as to what to cut to the youth pastor and lay staff. They feel that each department is in a better position than the finance committee to know what they can and cannot live without. Such a procedure also makes the staff and lay leaders feel they are more in control of their ministries.

Present Financial Information to Inspire Vision

For years I received the monthly newsletter from a church I had once served as a staff member. Every month the report showed a deficit. I often wondered how they kept their doors open if they were always behind. And yet I know that during that time the staff was paid, an addition was added to the building, and the church's mortgage was later burned.

Obviously, the financial statement wasn't reflecting reality. If nothing else, a financial statement ought to do that. But if it can also inspire vision, so much the better. Then not only will the congregation and finance people know reality but they will also see clearly how finances fit into the church's goals.

One way to do this is to help the finance people figure out ways of presenting their financial information so that it inspires vision. Here are some ways I've seen congregations do that:

• Give more exposure to people than to paper. Lives changed demonstrate that the church is fulfilling its purpose. Testimonies remind us to focus on believers over budgets, and on ministry over money. Placing people instead of just financial reports in front of the church calls us back to our purpose—it reminds us why we're in business.

Bethany Baptist Church in Puyallup, Washington, has recently launched a three-year financial campaign to expand its ministry. Each Sunday for the six weeks prior to the kick-off banquet, individuals gave their testimonies about how the church affected their lives. One person shared how the church had provided him and his family strength and stability in the midst of a career change and a move. A young man told how the church had stood by him while his father succumbed to cancer. And on it went.

"While our campaign goal is to expand the financial base of the church and provide facilities for ministry," says pastor Lowell Bakke, "we don't want to forget that the church revolves around people first."

• Have an annual celebration instead of an annual meeting. The Orchards Community Church in Lewiston, Idaho, recently had an annual business meeting that drew twice the normal crowd. The meeting was held after the Sunday morning worship service and included a fellowship dinner with tables decorated with flowers and balloons. Trays of slides depicting the ministry were interspersed with business items and testimonies of God's faithfulness. Letters from people who had moved away but were thankful for the church's ministry to them were read.

They also held a dedication service for newly elected board members, with the new members kneeling on the platform. The meeting was so meaningful for people that afterward some attenders requested membership applications.

• Use images, not just numbers. Campus Crusade for Christ has an entire media ministry that prepares its annual report on behalf of the staff. Through a combination of slides, video, graphics, and background music and voice, the entire ministry is featured in a thirty-minute presentation. The result is that everyone's vision is expanded as they see the worldwide scope of its ministry.

Some churches assign one or two people to take videos through the year at various church activities. Testimonials could even be recorded in advance and woven into a total ministry report.

People give to what they can see—that's why building programs tend to generate more money than less visible ministry. Our job in presenting financial information is to help people "see" the ministry that is taking place behind the budget.

One way to accomplish that is to print budget reports that show expenses and receipts in pie charts or graphs.

In addition, if a report has to be given orally, it should be short and concise as well as focused on ministry. Many churches find that the best person for this job is a lay person. The reason is that staff are usually not neutral parties in the budget; they have a vested interest in their areas of ministry as well as their compensation package. By having a lay leader address financial issues, the church takes ownership for this important area of ministry.

• Prepare clear financial reports and budgets. When executive pastor Charlie Culbertson took over his post at the Bellingham Evangelical Free Church, he found that the budget reports caused his eyes to glaze over trying to make sense of them. Says Culbertson, "The budget was arranged somewhat randomly, and it was full of excessive detail. So I rearranged the budget in terms of major categories, and now I report only in terms of those larger categories."

Three categories that Culbertson chose, for instance, were (1) staffing, which includes all expenses related to keeping pastors employed in the church, such as salaries, housing allowances, benefits, and business expenses; (2) facilities, which includes rent, utilities, repairs, maintenance, and office supplies; and (3) missions, which includes all programming expenses, such as youth ministry and women's ministry.

"We can now generate reports that include all the information or relatively little," says Culbertson, "depending on how much people want to see. For monthly elder meetings, though, I prepare a one- or two-page summary showing income versus expenses and the balance in church accounts. The elders don't need to deal with the vast volume of details regularly. And for a quick update to the congregation, I'll use pie charts."

Certainly, finance committees will have to spend the bulk of their time crunching numbers—they're the committee that is given this arduous task. But there is no reason why the nature of their task has to determine how they view their task. They can be structured so that instead of numbers and pledge cards, the Lord and his vision for the church inspire their work.

Excerpted from "Mastering Church Finances," (Christianity Today International).

Cash Reserves: Who Needs Them?

Cash reserves. If you’re like me, your eyes glaze over when these two words are used together. It’s certainly not the most exciting topic. But, what we have found through the current economic downturn is that cash reserves are more important than ever for ministries.
Why do ministries need cash reserves? Consider these actual situations:

• During the past winter, I received calls from about 50 churches that were panicked by outrageous heating bills running two to five times their normal averages. Some churches in Charlotte, North Carolina, and Atlanta, Georgia, where snow rarely falls, canceled services some weekends because of snowfall, and therefore took in virtually no offerings.

• The earthquake in Haiti created massive need. Many churches wished they could help but didn’t have the extra cash to do it.

• July was the hottest month on record in some parts of the country. Three churches I work with had to replace multiple HVAC units.

These are just a few recent examples of situations where adequate reserves could have allowed ministries to move forward instead of only wishing they could, or prevented them from having to pull funds from other parts of their ministry to pay unexpected bills.

Building cash reserves is actually not as daunting as it may sound. Churches can increase reserves by increasing revenue or decreasing expenses and not spending the difference.

Beyond that, here are four specific examples of ways a church can get on the path to building adequate reserves:

1) Take a special offering. Highlight a recent need that went unmet due to your church’s lack of reserves. Explain the effects of that situation, and the importance of possessing reserves in the future. Some churches even do short-term campaigns, with the specific goal of building liquidity for unexpected needs and potential opportunities.

2) Use interest-bearing accounts. Most financial institutions offer interest-bearing savings and money market accounts that build upon funds you have saved, even if you’re not adding to them. When Jesus shares the “Parable of the Talents,” in Matthew 25, He uses the example of an interest-bearing savings account as a minimum standard of good stewardship.

3) Create reserves through the budget. By creating and following a budget, your church can build in a monthly margin to transfer to an interest-bearing savings account. This is a smart time of year to begin making these types of budget tweaks for 2011. By keeping the budget conservative and devoting a monthly line item to a cash reserve, the church can position itself to stay on mission, even if giving stays flat.

4) Consider alternate giving channels. Many churches now have online giving, ACH, and even giving kiosks. If your church doesn’t, consider adding one or more of these, but don’t immediately spend any increased income that may develop. Contrary to what many churches do, there is no rule that says you must find a way to immediately spend every new, unexpected dollar that comes in. Put some away for future needs and opportunities.

It’s important for your church to lead by example when it comes to finances. Many congregants struggle financially due to their own lack of reserves. Show them how to prepare for unexpected needs and opportunities, rather than just tell them, by making adequate cash reserves a priority within your ministry. For a more complete picture of cash reserves, you can check out the white paper “Cash Reserves: How Much Is Enough?”

Also, by increasing reserves, and by communicating what you’re doing to your congregation, you also increase the financial credibility you have with your givers by demonstrating good stewardship.

Why Church Leaders Should Take the Risk of Embezzlement Seriously

As hard as it may be to believe, churches are not immune from embezzlement. In fact, the widespread belief among church leaders that such a crime "could never happen in a church" makes churches an easy target. Economic downturns make the risk even greater. Here are seven reasons to prevent fraud from happening at your church:

• Removing temptation. Churches that take steps to prevent embezzlement remove a source of possible temptation for church employees and volunteers who work with money.
• Protecting reputations. By taking steps to prevent embezzlement, a church protects the reputation of innocent employees and volunteers who otherwise might be suspected of financial wrongdoing when financial irregularities occur.

• Avoiding confrontations. By taking steps to prevent embezzlement, a church avoids the unpleasant task of confronting individuals who are suspected of embezzlement.
• Avoiding church division. By taking steps to prevent embezzlement, a church avoids the risk of congregational division that often is associated with cases of embezzlement--with some members wanting to show mercy to the offender and others demanding justice.
• Avoiding the need to inform donors. By taking steps to prevent embezzlement, a church reduces the risk of having to tell donors that some of their contributions have been misappropriated.
• Protecting the reputation of church leaders. By taking steps to prevent embezzlement, a church reduces the damage to the reputation and stature of its leaders who otherwise may be blamed for allowing embezzlement to occur.
• Preserving accountability. Churches that take steps to prevent embezzlement help to create a "culture of accountability" with regard to church funds.

Resource. For a full analysis of the subject of embezzlement of church funds, see chapter 7 (volume 2) in Richard Hammar's four-volume set, Pastor, Church & Law (4th ed. 2009). To order, call 1-800-222-1840 or visit ChurchLawToday.com.