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Big Church Small Church Myths | That Pioneering Spirit | Delegation Made Simple | Small Church Finances | Leadership Teams | Planning the Future Getting Organised

Small Church Finances

Probably one the most common challenges in churches, no matter what the size, is in the area of finances. In this section, we're going to talk about practical principles relating to getting your finances under control. For some leaders, this may come naturally. But you may be surprised how many leaders don't understand even the most basic of financial management principles.

Here are some of the things you need to understand.

1. You're Running a Business

Now don't just switch off here. Lots of leaders get themselves into trouble because they get all spiritual about financial management. They think they can do anything they want, quote a few Bible verses, and everything will be all right.

I'm here to tell you that that's not how the real world ticks. If your church can't make it as a business, it can't make it on any other level either. It may not sound very spiritual, but if you want your church to survive - or even better, to flourish - you, or someone else in your church, need to come to grips with how to handle money. After all, that money is a trust that God has put into your hands, and you want to do your best.

So even though your church is a lot of things - a family, an army, a body, a spiritual house, and so on - you also need to realise that it is subject to the same financial constraints as any business. If Satan can delude you into thinking that the way you handle your finances is unimportant, and if he can cause your bank balance to sink, your church will sink with it. Because like it or not, your church runs on money. That's why there's so much stuff in the Bible about it.

2. The Two Realities

Businesses, churches, governments and families all are faced with two inescapable realities: Income and expenditure. Any change in the balance of your bank account is due to the impact of one of these. If you receive money, your bank balance rises. If you spend money, the balance falls. It really is as simple as that. Any accountant knows this. That's why when they present a Profit and Loss Statement, the left column itemises the Income, and the right column itemises the Expenses.

For many people, this reality has not really impacted their thinking. They look at their bank balance and its continuous decline, wondering what mysterious forces are at work to bring about such a state of affairs, almost as if it's completely beyond their control. Some even blame it on the devil.

Sometimes things may well be beyond our control. Economic downturns, increases in the cost of living, changes in interest rates, and so on. But many times, our financial position is a direct result of the choices we make and how we handle money.

There is a saying that people don't have a money problem, they have a spending problem. There may be many parts of the world where people are living at subsistence levels, but in the developed nations overspending is usually at the root of many financial difficulties. Again, this is true, not only on a personal level, but in churches, businesses, and governments too.

Unfortunately, it is very often the case that church leaders are oblivious to how their own spending affects the finances of the church - until it's too late. So let's take a look at how we can make the finances of our churches the healthiest they can be. Then we can leave the rest up to the Lord.

3. Preparing a Budget

The first thing any leader needs to do if they are going to get their church finances up to par is to prepare a budget. If you've done this before, then it may seem an obvious step. However, many small church pastors have never prepared a proper budget, and may even have convinced themselves that their cash flow is so small that it's a pointless exercise.

That couldn't be further from the truth. You may not want to do a budget, you may even find it a real challenge, but if you put the effort in, you will reap the rewards. To make any progress in this area, you need a clear picture of where your church finances are right now. So let's take a look at some basic steps to gaining a measure of control over your money problems.

First, if you've never done it before, you need to start keeping good records. Presumably you are already keeping receipts of all expenditure. You have to make sure that all your expenses are categorised in a way that you and your Leadership Team can easily understand where the money is going. That will include everything you spend money on, such as salaries, rent, electricity, stationery, equipment, repairs and maintenance, visiting ministries, missions, telephone, internet, insurance, advertising, superannuation, travel, accounting costs, postage, bank fees, levies, meetings, bank charges, books, CDs, and anything else you can think of. If you've spent it, it needs to be itemised on this list.

On a sheet of paper, draw two columns. Make the left column much wider than the right and entitle it "Expense Item". Then entitle the right column "Annual Cost". Now underneath the Expense Item column, list all the expense categories as mentioned above. You can do this in alphabetical order or start with the high cost items and work your way down to the low cost items. The choice is yours. Here's what it might look like:

Expense Item Annual Cost
Salaries
Rent
Electricity
Stationery
Equipment
Repairs & maintenance
Visiting ministries
Missions
Telephone
Internet
Insurance
Advertising
Superannuation
Travel
Accounting costs
Postage
Bank fees
Levies
Meetings
Bank charges
Books
CDs
Total

Now the quality of your record keeping becomes evident. You must now calculate how much you've spent in the last year in each of those areas. This will require you to go back over your monthly records, or your receipts if you aren't already keeping records. Then total the whole column so that you can see how much you've spent in the last year. Next you need to total the amount of money that's come into your church from all sources - tithes and offerings, missions, bank interest, etc. You could call this whole page, "Budget: Our Current Position", and it could look like this:

Notice that I've put in columns for both the weekly and annual amounts as they can both be handy. Work this out for your expenses too.

Budget: Our Current Position

Expenses
Expense Item Annual Cost
Salaries
Rent
Electricity
Stationery
Equipment
Repairs & maintenance
Visiting ministries
Missions
Telephone
Internet
Insurance
Advertising
Superannuation
Travel
Accounting costs
Postage
Bank fees
Levies
Meetings
Bank charges
Books
CDs
Total

Income
Item Weekly Amount Annual Amount
Tithes & Offerings
Missions
Bank Interest
GST
Total

Remember how we talked about the two realities? This is where they come in. If your income is higher than your expenses, then you have what's called a surplus. That's a good position to be in, although God didn't call us to build big, fat bank accounts. He called us to invest in the Kingdom of God.

But if your expenses are higher than your income, then the moment of truth has come. You have a deficit, a problem that you need to fix as soon as possible. Otherwise, you will eventually go broke. There are only two ways you can solve your problem. You can either increase your income, or you have to work on decreasing your expenses. These are the only two options.

The next step is to carefully peruse your Budget: Our Current Position, and put a tick against everything you can either cut out or reduce. Be realistic. Don't just slash everything on the list. Give some real thought to your budget cuts and how they will affect the running of your church. Make sure you are prioritising according to what is in the best interests of the Kingdom of God.

So far, your budget has only told you what you've already done in the past. Now it's time to do a Proposed Budget so you can plan for the future. In the Proposed Budget, you will probably have most, perhaps even all, of the items listed in your Current Position, only you will have adjusted all the items you ticked. Total up the expenditure column, and hopefully it will be radically different from the initial position you were in.

If you still have a deficit, try going through your expenses once more, and even have your Leadership Team go through it with you to see if they have any ideas. If you've trimmed as much as possible from your expenses, it's time to start work on the other side of the equation - income.

There's one more thing to be aware of before we talk about the subject of income, and that's credit cards. Many pastors have a credit card covering pastoral expenses which the church pays for. But credit cards pose a great danger.

You go into a shop, make a purchase, and hand over your credit card. But it's not like spending real money. When you spend real money, your wallet gets lighter as you go. You see the money disappearing. But in a credit card transaction, it's like having a little magic card that takes care of everything. The reality of a diminishing bank account doesn't quite sink in. Until the end of the month. That's the day of reckoning.

So here's a bit of advice that could save you a lot of heartache. If you can't pay out the full balance of your credit card completely (with very occasional exceptions) at the end of every month, get rid of it. You're not doing yourself, or your church, any favours by incurring regular credit card interest because your spending is out of control. That's right. If you can't pay out your credit card balance every month, your spending is out of control.

4. Raising Money

If you've already done what you can to reduce your church's expenses, you now need to turn your attention to its income. This is an area where you have to be careful. There are two extremes you can go to, and neither of them is helpful or desirable.

On the one hand, you could bleed your people for every last cent, regardless of how it affects them. The usual justification for this is that you're stretching their faith and that God will give back to them with interest. If you really believe this, then I suggest that you start by giving away all of your money, property and possessions. After all, God will give it back to you with interest, won't He? The truth is, when Christian leaders preach this sort of stuff, it's a belief they rarely put into practice themselves.

The other extreme is to ignore the giving levels in your church and simply hope for the best. This doesn't help your people either. The purpose of this section is not to teach principles of giving and how God blesses generosity. But you should be aware that your people will reap what they sow. Therefore, you have a God-given responsibility to make them aware of this and help them to live generous lives.

So, avoiding the two extremes, let's look at some practical steps you can take to increase the giving in your church.

Assess the current giving

First, make an assessment of the average giving in your church. There are two methods that are pretty simple to do. One method is to add up all the giving in your church for a year and divide that number by the average number of people (men, women, and children) in attendance every Sunday. For instance, if the total giving for your church in the last year was $100,000, and the average attendance was 50 people, you divide 100,000 by 50. The average giving per unit (by this method) would then be $2,000 per annum, which would be very high.

Using this method, research shows that the average giving in the US is around $1,000 per giving unit per year.1 This means that you just add three zeroes to your average weekly attendance and that gives you the national church giving average for that number of people. If your average attendance is 50, then you can reasonably expect (in the US) that your giving will be around $50,000 for the year. Any more than that and your giving is above average. Of course, this average applies to the whole of the US, and you may have to adjust it for your particular area.

Another way of assessing the giving is to divide the total annual giving by the number of people (again men, women, and children) who consider your church to be their church. Since not everyone attends church weekly, this will give you a lower figure. You can then divide the figure by 52 to find the average weekly giving.

In Australia, the average giving is apparently about $13 per person per week.

Depending on what country you live in, it may be more difficult to find the average giving in your area. But you need to compare your church's giving with the average giving in your district. If you live in a poor country, there's no point comparing your giving with giving in a wealthy country like the United States.

The purpose of this exercise is to get an idea of how your church is doing compared to other churches. This isn't for the purposes of boasting, but so you can get a feel of what you can reasonably expect. If the giving in your church is lower than average, then there's definitely room for improvement.

Teach about giving

Some churches inexplicably think that money should not be mentioned in church. Given the fact that there is so much information on money management in the Bible, and especially in the teachings of Jesus, this position is rather difficult to justify. Money is an important part of life. If the devil can deceive leaders into neglecting this subject in their preaching, he not only effectively cripples churches financially, but also individuals and families. This is obviously one of his strategies.

Not only should you teach on giving at various times during every year (don't overdo it!), but every week when you receive the offering you need to select a Scripture for that purpose. I'm not suggesting that you do what some churches do and turn this into a weekly opportunity for preaching a mini-sermon on giving.

This is counter-productive. I have known people who attend churches that do this and they actually stop giving altogether as they believe the church is only after their money. I would take that a step further and suggest that any church that spends fifteen or twenty minutes a week speaking on giving is making giving the most important doctrine in the Bible. And it isn't!

Here is a list of some Scriptures you can use:

    Phil 4:17 Not that I seek the gift, but I seek the fruit that abounds to your account.

    Luke 6:38 Give, and it will be given to you: good measure, pressed down, shaken together, and running over will be put into your bosom. For with the same measure that you use, it will be measured back to you.

    Phil 4:19 And my God shall supply all your need according to His riches in glory by Christ Jesus.

    1 Chr 29:14 But who am I, and who are my people, that we should be able to offer so willingly as this? For all things come from You, and of Your own we have given You.

    1 Tim 6:17 Command those who are rich in this present age not to be haughty, nor to trust in uncertain riches but in the living God, who gives us richly all things to enjoy. (Do you know that giving is all about trusting God? Did you know that when you give, you are demonstrating that you trust God?)

    2 Cor 9:6 But this I say: He who sows sparingly will also reap sparingly, and he who sows bountifully will also reap bountifully.

    Prov 11:25 The generous soul will be made rich, and he who waters will also be watered himself.

    Prov 3:9-10 Honour the LORD with your possessions, and with the firstfruits of all your increase; (10) so your barns will be filled with plenty, and your vats will overflow with new wine.

    Mat 6:19-20 Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; (20) but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal.

    1 Tim 6:18-19 Let them do good, that they be rich in good works, ready to give, willing to share, (19) storing up for themselves a good foundation for the time to come, that they may lay hold on eternal life.

    2 Cor 9:10-11 Now may He who supplies seed to the sower, and bread for food, supply and multiply the seed you have sown and increase the fruits of your righteousness, (11) while you are enriched in everything for all liberality, which causes thanksgiving through us to God.

    Is 58:10-11 If you extend your soul to the hungry and satisfy the afflicted soul, then your light shall dawn in the darkness, and your darkness shall be as the noonday. (11) The LORD will guide you continually, and satisfy your soul in drought, and strengthen your bones; you shall be like a watered garden, and like a spring of water, whose waters do not fail.

    Is 32:8 But a generous man devises generous things, and by generosity he shall stand.

    2 Cor 9:7 So let each one give as he purposes in his heart, not grudgingly or of necessity; for God loves a cheerful giver.

    Mal 3:10-12 "Bring all the tithes into the storehouse, that there may be food in My house, and try Me now in this," says the LORD of hosts, "if I will not open for you the windows of heaven and pour out for you such blessing that there will not be room enough to receive it. (11) And I will rebuke the devourer for your sakes, so that he will not destroy the fruit of your ground, nor shall the vine fail to bear fruit for you in the field," says the LORD of hosts; (12) "and all nations will call you blessed, for you will be a delightful land," says the LORD of hosts.

    Prov 19:17 He who has pity on the poor lends to the LORD, And He will pay back what he has given.

    Mat 10:41-42 He who receives a prophet in the name of a prophet shall receive a prophet's reward. And he who receives a righteous man in the name of a righteous man shall receive a righteous man's reward. (42) And whoever gives one of these little ones only a cup of cold water in the name of a disciple, assuredly, I say to you, he shall by no means lose his reward.

    Prov 22:9 He who has a generous eye will be blessed, for he gives of his bread to the poor.

    2 Cor 9:8 And God is able to make all grace abound toward you, that you, always having all sufficiency in all things, have an abundance for every good work.

    Phil 4:19 And my God shall supply all your need according to His riches in glory by Christ Jesus.

    Mat 6:19-21 Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; (20) but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. (21) For where your treasure is, there your heart will be also.

    Gal 6:7 Do not be deceived, God is not mocked; for whatever a man sows, that he will also reap.

    Gal 6:9 And let us not grow weary while doing good, for in due season we shall reap if we do not lose heart.

    Lev 27:30 And all the tithe of the land, whether of the seed of the land or of the fruit of the tree, is the Lord's. It is holy to the LORD.

    Acts 20:35 I have shown you in every way, by labouring like this, that you must support the weak. And remember the words of the Lord Jesus, that He said, "It is more blessed to give than to receive."

    Gen 12:2 I will make you a great nation; I will bless you and make your name great; and you shall be a blessing.

    Deut 12:5-6 But you shall seek the place where the LORD your God chooses, out of all your tribes, to put His name for His dwelling place; and there you shall go. (6) There you shall take your burnt offerings, your sacrifices, your tithes, the heave offerings of your hand, your vowed offerings, your freewill offerings, and the firstborn of your herds and flocks.

    1 Kings 17:10-16 (Elijah and the widow)

    Josh 6:19 But all the silver and gold, and vessels of bronze and iron, are consecrated to the LORD; they shall come into the treasury of the LORD. (The people kept all the booty in the cities they conquered, except for one - Jericho, the gateway to the promised land. It was the firstfruits.)

    Luke 12:48 …For everyone to whom much is given, from him much will be required; and to whom much has been committed, of him they will ask the more.

    Mat 19:21 Jesus said to him, "If you want to be perfect, go, sell what you have and give to the poor, and you will have treasure in heaven; and come, follow Me." (22) But when the young man heard that saying, he went away sorrowful, for he had great possessions. (23) Then Jesus said to His disciples, "Assuredly, I say to you that it is hard for a rich man to enter the kingdom of heaven."

    Luke 12:16-21 The rich man who built barns

Don't just read these Scriptures aloud. Put them on your data projector or in your newsletter so that people can read along with you. Once you've read the Scripture out, talk about it for one or two minutes maximum. And I mean maximum. Don't bludgeon your congregation each week.

There will be some in your church who are already giving generously, and some who are not. Aim what you say at the people who are already giving generously. Say something to encourage them. Remind them that there are plenty of promises that apply to generous givers and encourage them to put their trust in God to fulfil His promises. Those who are not already giving may also be inspired to take up the challenge of being generous givers.

5. The Final Ingredient

It's one thing to be business smart when running your church, but as Christians we have another dimension as well. We need to include God in all our decision-making. We're talking now about entering the realm of faith. This isn't a licence to do stupid things in the name of faith.

I don't believe that we were ever meant to run a church merely as a business without adding the faith ingredient. Nor do I believe that we were meant to walk in so-called faith without any business sense. God expects us to use both our faith and our minds. He didn't give us brains just for the purpose of filling our skulls.

So when I say that we need to add the faith ingredient, I am not implying that you throw out good business principles. I'm simply reminding you that you need to involve God in the financial condition of your church. This includes praying for wisdom in handling church finances.

It also means asking for God's help. If you are being a wise steward, don't just leave it at that. Ask God to work in the hearts of people to increase their giving. Pray that He will prosper them. Ask Him to help you get better deals on what you have to purchase.

Finally, get more people in. Aim to reach more people with the life-changing power of the gospel. An increase in attendance will obviously have an effect on the level of giving in your church. Please don't misunderstand what I'm saying. I'm not suggesting that your motive for winning the lost should be to get more money into your church coffers. If that's all you're interested in, then you might as well just make it your aim to rip people out of other churches.

However, this is just a reminder that you have been commissioned to reach people with the gospel (Matt 28:19-20). The main goal is to get them into the Kingdom of God, but don't forget that's going to have a big impact on the finances of your church.


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