Top 7 Financial Mistakes Made By Church Leadership

Most pastors and church leaders don’t go into the ministry with much interest in managing money or with any experience in finance.


Unfortunately, this can lead to inattention, which can in turn lead to financial mistakes and mishandlings that cause serious problems with your church.


Money problems can cause irreversible damage to your community and lead to you closing your church doors, just as they do in businesses and in other nonprofits.


It’s up to church leaders to take responsibility for handling church finances in a professional way. Perhaps even more than businesses do, church pastors and elders owe it to their congregations to carry out their finances with integrity.


With that in mind, here are ten financial mistakes church leaders tend to make.


1. Not prioritizing finances

As mentioned, many church leaders aren’t comfortable with or excited about handling finances, and of course they always have plenty of other work to do. For that reason, it’s easy for finances to get put off or pushed aside by church leaders, who trust others with the task or simply don’t devote enough attention to it. When church leaders give don’t finances the attention it deserves, problems are sure to develop.

2. Not choosing finance staff carefully

The person or people in charge of managing the church’s books and budgets need to be trustworthy professionals who work well with church leaders, but are also confident enough to operate relatively independently of the sway of their influence. This means finding people who have done finances for other churches, nonprofits, or businesses before — not the pastor’s family member or an inexperienced volunteer.

3. Failing to stick to a strong annual budget

Financial planning centers on creating a strong, detailed annual budget. As you plan for the year, you should be working toward one financial goal whether that’s to pay off a certain amount of debt, create a surplus, or something else. Your accountants should be able to help you with this. However, it’s not enough to just create the budget. You have to adjust it as necessary and make changes when money doesn’t come just as you planned so that you can still reach your goals.

4. Not being transparent

Keeping secrets breeds mistrust and resentment in your congregation. There’s no reason that only church leadership should know the details of your church finances. The budgets, incomes and other financial documents should be made available to anyone who asks, and even printed in the church bulletins. Being honest and upfront isn’t just the right thing to do — it also makes your members feel involved and inspired to help. Some churches even host special meetings and presentations to share finances with their members.

5. Forgetting to adjust for cash flows

Even if you make more than enough money over the year to cover your church’s annual expenses, it doesn’t do much good if the bills need to be paid long before you have the cash in hand. Annual budget goals are key to great finances, but when you don’t account for big fundraising events and the bigger expenses such as the start of starting new projects or programs, you can run into cash flow problems. This is another reason that church leaders can’t just outsource finances — they need to be involved in cash flow projections because accountants may not be as aware of the details of the church’s priorities and projects.

6. Not planning to create a surplus

As much as we would like them to, surpluses don’t just happen on their own. In order to have the reserves that can shield your church from unexpected expenses or lean times, you need to make a plan to create reserves.

7. Being too involved

On the flip side of the pastors who don’t much interest in finances, some pastors can get too involved with them, even choosing to handle things alone or personally. Having professionals involved and being transparent is important for accountability, so pastors shouldn’t handle money themselves. However, also remember that spending too much time on finances that could be better handled by a financial professional distracts from your church’s greater mission.


Photo credit: Alejandro Rdguez / CC 2.0

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