Administering church money

A budget is essential to a well-run church. And financing most local needs through one offering item makes life easier for both church leaders and members. Here's a simple way to set up and operate a combined budget program.

Warren Zork serves as the pastor for stewardship at Sligo Seventh-day Adventist church, Takoma Park, Maryland. He says that while stewardship education and financial administration require considerably more attention to detail in a large church like Sligo than in a smaller congregation, the principles for implementing financial responsibility are similar. He credits Sligo's business administrator, Israel Castro, for many of the ideas and practical suggestions this article contains.

A friend of mine recently remarked that he wished he could convince the treasurer of the 150-member church he has just begun to pastor that they need a church budget! His new congregation is paying off last year's school salary debt to the conference office by selling citrus fruit from Florida.

A church budget is essential for fiscal responsibility and trust between a pastor and his congregation. I want my members to consider the inreach and outreach ministries of their church as their own. If they are to do this they must know what the church plans and what is actually happening. Jesus said, " 'Which of you here, intending to build a tower, would not first sit down and work out the cost to see if he had enough to complete it?' " (Luke 14:28, Jerusalem). His point was "You plan ahead for your secular affairs. How much more essential planning is to a life of discipleship!"

A budget simply consists of a careful estimate of the cost of operating the church--both its inreach and outreach aspects--and how we plan to pay those costs.

Two years ago my local church began following the Personal Giving Plan. For the first time we combined every aspect of our church life into one budget. Up until then we had called for separate offerings for the youth, the summer recreation program, our outreach (personal ministries), Sabbath school, worthy student fund, Community Services, school subsidy, and church plant and office operations. Now we were bringing these needs all together in one budget, asking our people for a single offering commitment for a balanced church program.

Influential members objected, fearing that such a plan wouldn't work. Some thought we were taking away their freedom to give to the local need of their choice. We fully acknowledged their right to continue to give in this way. But we believed the benefits derived from having everyone in the congregation see the whole program of the church in perspective outweighed these objections.

Our budget formulation process included input from lay leadership, pastors, the finance committee, and finally an open board meeting. Those church leaders (lay and pastoral) responsible for each section of the expense side of the budget were given ample opportunity to explain why they needed the amount they had specified. Our treasurer explained the income (or offering) side of the budget. He showed us the giving patterns for each part of the budget over the past several years and the approximate number of giving units supporting the church program. (A giving unit represents either a nuclear family or a single adult supporting himself.)

Though our budgeted expenses totaled about 7 percent more than our highest previous year's offerings, we decided to vote the new budget and take the challenge to our people. We believed we could raise the extra amount necessary by tactfully but clearly focusing our stewardship efforts on members who previously had not planned their offering giving in the same routine way they had been returning their tithe. During our stewardship commitment month we conveyed the details of the budget through the church paper and by direct mail.

Our members' reactions to giving the combined way were mixed. A few hearty souls refused to use the newly designed tithe offering envelope, continuing to turn in their gifts under the old separate headings. Others, seeing for the first time how much we were spending on janitors or music or church bulletins or Sabbath school materials or Community Services, pinpointed their giving for a time. Or, more important, they continued dialogue by asking hard questions such as "Why do you have to pay the organist?" or "Why can't we mimeograph the bulletin instead of having it printed?" Such discussion, while timeconsuming and even intimidating on occasion, let people know that this was their church, that nothing was being shoved under the table, that the church must minister to the needs of a variety of people both inside and outside its membership. Early criticism and giving intransigence have gradually given way to understanding and support.

We have found it important to keep the entire congregation informed of the actual offering income and expenditure needs. A weekly offering report box in our bulletin news section compares what came in the previous Sabbath with what was needed in order to fund our budget fully. The cumulative comparison is there as well. For example, one week (more than ten months into the fiscal year) our bulletin showed the cumulative offering need was $288,403, while our offerings to date were only $275,633.

These figures, and those of other recent Sabbaths, show a trend that must be addressed by church administration. How do we do it?

Administering the budget

We use a computer to record each week's tithes and offerings. In addition to entering all conference funds against their respective trust fund accounts (tithe, World Budget, conference bud get, and specially designated conference offerings), we enter all local combined budget offerings into the combined budget account. Once each quarter each member is sent a printout, which serves as a receipt, denoting all gifts he or she made during the preceding quarter. The fourth quarter's printout shows not only the giving details for that quarter but also the cumulative giving for the entire year. This final receipt is a bona fide record for the entire calendar year and thus is helpful in substantiating church giving if needed for IRS purposes.

Some members choose to give to a specific fund within the local combined budget. Not only do we honor their special designations, but we add their contributions to the funds that are distributed by percentages to the respective funds of the budget. The table accompanying this article illustrates how we do this. The figures it contains are fictional but represent the process our church follows.

Notice several important things the table indicates about the offerings and their distribution: 1. The actual combined budget offerings for the first month were a little short of expectations. 2. Therefore, every operational trust fund within the combined budget shared in the underfunding in exact proportion to its percentage share of the overall budget. 3. Had the actual combined budget offerings been higher than budgeted expectations, every operational fund within the budget would have shared proportionately. 4. Members who chose to give specific offerings to the church school, for example, had their gifts added to the total that came from combined giving. This must always be done. Money must always go for the purpose the giver intended. Only in this way can trust be maintained.

The procedure we've described immediately raises two questions. If these patterns of giving continue, some local funds will come up short, and others will have more than planned. How should the church administrator handle this? And the combined budget represents a number of organizations within the church, e.g., Sabbath school, church school, and personal ministries. How does the treasurer keep the leaders of these entities from ordering supplies or otherwise spending more than the available funds will permit? Let's take these questions one at a time.


Giving and spending trends must be monitored regularly and the implications shared with the church board each month. In most situations it is unwise to readjust the budget during the fiscal year, even by vote of the church board. Weather conditions, vacations, and other seasonal variations may even out the offering income of the church. It usually takes a full twelve-month cycle to establish a complete picture of the total giving power of the church. True, large special donations to particular projects will tend to skew the picture. The church, however, may build up a cash operating reserve by operating in the black for a few years. This can be prudently drawn on during lean months if there is some degree of certainty that larger offering months are just around the corner. (Incidentally, our fictional budget calls for 5 percent of the combined budget offering to go into a miscellaneous fund. In reality we rarely call upon this fund. But it provides for rainy days, helps the church operate in the black, and builds up a cash flow operating reserve.)

Underfunding raises a delicate situation that calls for the wisdom of the entire finance committee, if not the entire church board. There is always room for intelligent faith to be exercised while the church is made aware of the situation. There is sometimes a very fine line, however, between faith and presumption. The best way to even out the budget is to make adjustments as the board plans the next year's budget, adjusting each main section of the budget to account for recent giving patterns, including special donations.

Occasionally the board may decide to reallocate funds, transferring them from one church entity to another at the end of the fiscal year. For example, a very mild winter may leave the church operation section overfunded. The church board may decide to transfer the extra funds to the Sabbath school expense fund, which has come up short in meeting a Sabbath school lesson quarterly bill.

Group leader responsibility

Each officer or pastor of the church must be responsible for intelligent spending within his or her own budget funding. Accountability must be required. Only in this way can trust be maintained. For example, suppose giving is down 10 percent. The pastor and treasurer may together determine that certain expense items will have priority: insurance, the secretary's salary, the heating bill, basic postage needs, and janitorial services. They agree that the painting of the interior, the buying of a typewriter, and new landscaping around the sanctuary can be delayed. The Sabbath school leaders and those in charge of Community Services, outreach, and special programming should follow the same principle. Each should be encouraged to spend within his or her funded budget. The church board should require an accounting from each at least monthly.

The short-term temptation in times of financial crises may be to borrow from other trust funds held by the church--to rob Peter to pay Paul. (Generally speaking, a trust fund is set up to receive gifts members designate for a specific project.) This is unethical and can destroy trust between the members and those of us who are handlers of sacred funds. Another solution is to take up a special offering to cover the shortfall. Let me offer a word of caution here. It is far better to work evenly and steadily at building increased commitment to planned sacrificial giving, encouraging a wider circle of regular church support, than to go after the emergency dollars with a highly emotional appeal.

An honest sharing with your people in time of financial crisis will help them to take seriously the importance of everymember participation in the solution. About the seventh month of our past church year, we saw clearly that if giving did not increase we would have a serious problem in meeting our budget. Our commitments to our school, our new Community Services center, and even the basic operation of our new church addition were threatened.

With careful announcements ahead of time, we called a special business meet ing of the church to ask their advice. Several hundred of both the curious and the faithful showed up. Using simple graphics, we explained clearly that it did not appear that our giving would match the "faith factor" in our expense plans for the rest of the year. We were serious. Should we cut back on the paid professional musicians in the church? Should we save on fuel by vacating our church office section, moving our secretary into one room and scattering our pastoral staff to other, more easily heated sections of the old building? Should we discontinue our church newspaper? Should we go to a simple mimeographed bulletin?

After a lively but honest discussion, our members let us know that they didn't want the existing services or programs of the church cut back and that they had been unaware--in spite of our previous attempts to inform them--that the situation was really all that bad. (Most had been unaware that we have no cash reserves for operating--a situation that we are slowly beginning to turn around.) They suggested an aggressive campaign to inform members, both from the pulpit and by direct mail, including an immediate appeal for increased commitment to planned giving. We complied and ended the year with a slight operating gain.

Administering our church emergency aid fund

Giving to the needy both within and outside the church has a high priority with our congregation. We've built a tradition of giving to our less fortunate neighbors through our Festival of Praise the Sabbath before each Thanksgiving. And it is a well-ingrained custom to take a special offering for the poor each communion Sabbath. We have retained during the year these five special offerings for the poor outside of the local combined budget.

A ten-member committee administers the .emergency aid fund built up from these offerings; one of the pastors attends the regularly called meetings. A smaller church might select for this work some sensitive, caring deacons and deaconesses who can keep confidences. Work ing from a set of financial guidelines developed for the kinds of financial crises most frequently encountered, the committee assesses the current requests and, after tactful but careful inquiry into the facts, votes financial help. This is no ivory-tower group; each is committed to going out and interviewing destitute church (or community) members, get ting the facts required by our guidelines, and then phoning as many committee members as are required to make a decision. This group keeps confidences, works carefully, and is bonded together in a spiritual fellowship through its common agonizing over how best to help and follow through. In this way the task of evenly distributing our emergency aid funds among our own members in crisis is shared. It does not usually become an emotionally exhausting and time-consuming burden upon the pastor alone.

All God's children are His priests and share equally in the responsibility of administering funds, as well as of giving. Though at times it seems easier for the pastor and the treasurer to make all the financial decisions and inform the board later, in the long term this breaks down the trust between the people and their spiritual leader. While the pastor must speak prophetically from the pulpit about the mission of the congregation, he must take his people with him, letting them share in the setting of financial priorities. A lay finance committee of committed (but not necessarily big) givers should be relied on for advice, a committee not beholden to one or another of the sincere task-oriented leaders of the church. It can do much to help prioritize the many missions of the church, assisting the church in striking a balance between undue restraint on the one hand and unbridled innovation on the other.


For a church to reach its stewardship potential, the pastor as well as the congregation must be committed in principle to the concept of systematic benevolence--that is, spiritually motivated, planned, sacrificial giving. The pastor, in his personal giving commitment, must be practicing what he preaches. While he will not fall into the self-serving trap of advertising his giving habits to the congregation, a pastor will convey his commitment in more subtle ways: by his pulpit enthusiasm for planned giving, by his insistence on keeping details of individual tithe/offering gifts from members confidential, and by maintaining openness and accountability concerning all local fund expenditures. The treasurer must also practice both confidentiality concerning donations and forthrightness about expenditures.

By the very nature of their responsibilities, the church treasurer and the conference auditor have to see individual donations. But I personally do not know and do not want to know specifically how much any member gives to my church. As the pastor of all the people, I do not want to be in the position of even subconsciously assessing any person on the basis of what he gives in relation to what I think he ought to give. It is essential that both the finance committee and the pastor be as free as possible from the subtle but real power to persuade that is so often associated with a church's big givers.

Advertisement - Ministry in Motion 300x250

Ministry reserves the right to approve, disapprove, and delete comments at our discretion and will not be able to respond to inquiries about these comments. Please ensure that your words are respectful, courteous, and relevant.

comments powered by Disqus
Warren Zork serves as the pastor for stewardship at Sligo Seventh-day Adventist church, Takoma Park, Maryland. He says that while stewardship education and financial administration require considerably more attention to detail in a large church like Sligo than in a smaller congregation, the principles for implementing financial responsibility are similar. He credits Sligo's business administrator, Israel Castro, for many of the ideas and practical suggestions this article contains.

Digital delivery

If you're a print subscriber, we'll complement your print copy of Ministry with an electronic version.

Sign up
Advertisement - Southern Adv Univ 180x150 - Animated

Recent issues

See All
Advertisement - NAD Stewardship (160x600)