What Makes a Financially Healthy Church

What Makes a Financially Healthy Church

Is your church financially fit?

Part of being a good steward is taking care of the resources God has given you and using them to further the Kingdom. As a leader of your church and congregation, you have a responsibility to help ensure that your members’ funds are being used properly and to set an example of good financial practices.

To create and maintain a solid financial foundation, a church needs strong financial leadership, both in the office and on the church board. A few board members with backgrounds in finance can be a valuable resource when you’re planning the annual church budget.

And when it comes to budgets, “You can’t manage what you don’t measure,” says Brent Olson, Senior Vice President of Finance at AG Financial Solutions. Planning a budget is more than a matter of assigning funds for each ministry and activity. It requires careful and thoughtful planning, as well as regular review and management.

A budget details how your ministry uses its funds to fulfill its mission and vision. When developing or adjusting your budget, review each line item and consider eliminating anything that doesn’t help your church reach its goals.

Your church leadership should meet regularly to review the budget and current financial activity. Compare your budget to how much money is actually going out and coming in. If you’re not aware of where you are financially, it’s hard to know where you’re going and whether your finances are on the right track.

A great way to monitor your finances is to include two columns in your financial reports: one for actual spending and one for budgeted spending. Seeing where you’re exceeding or falling short can help you better plan for the future. For more practical tips on church budgets, including a free template download, check out our Church Finance Guide

As you build your church budget, review expenses and spending for previous years. If you budget to 90% of the previous year’s budget, you’ll have 10% to direct toward cash reserves or to cover any unexpected expenses that may crop up throughout the year. Building this margin into the budget allows your church to steadily grow its savings and prepare for unplanned expenses.

Keeping your church financially healthy can also involve helping out your members. Consider offering financial counseling services to help your congregants get their finances on track. Many people want to give to ministry but simply lack the funds to do so. If you help your church members take control of their finances, they’ll be able to give more freely to Kingdom work.

A financially healthy church can serve as a demonstration and inspiration to its members. If your church can manage its finances well and reach the community, your congregants will have a clear example of good financial stewardship, and your ministry will have more impact on the community it seeks to reach.

To learn more about to create a culture of giving in your church, download our free white paper, Cultivating Generous Givers.