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7 Tips for Stewarding Church Finances

April 8, 2021 jill Blog
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By Deborah Ike

As people tithe and give, they’re trusting church leaders to use that money wisely. To maintain excellent stewardship of church finances, you need well-defined policies and internal controls in-place. These practices can greatly reduce the likelihood of financial fraud and increase wise usage of church funds.

#1: Always have at least three people present while counting the offering.

Although text-to-give and online giving are increasing in popularity, many people continue to give via cash or checks. If you have three or more individuals present while counting the offering, it’s much harder for any one person to steal from the congregation.

#2: Establish levels of financial authority.

Determine, document, and communicate who has authority to do the following:

  • Sign checks (and at what amounts)
  • Incur debt on behalf of the church
  • Establish new bank accounts
  • Use church debit/credit cards (for what types of purchases and at what spending limits)

For each of these scenarios, it’s wise to have more than one unrelated person involved in these processes. This policy protects the church from individuals working together to commit fraud and those with the authority from unwarranted accusations.

#3: Define and document a benevolence request process.

Benevolence requests pull at our heartstrings, making it difficult to offer an objective response. To ensure fair treatment and good stewardship of church finances, you should develop a standard method for processing such requests. This should include a request form, specific criteria for why a request would be approved or disapproved, how the money will be dispersed, who has authority to approve the requests, and how the request will be documented from start to finish.

#4: Develop a budget.

A budget is a plan for how the church will allocate the money God (and the congregation) entrusts to leadership. Each ministry department leader should propose what he/she wants to accomplish in the upcoming year and what funds they’ll need for that effort. Consolidate these requests and take the overall budget through the church’s review and approval process. You’ll likely need to do a few iterations before finalizing the budget for the upcoming year.

#5: Review church finances monthly.

The senior pastor, executive pastor, and leader of each department should review financial reports such as budget vs. actuals for each ministry area on a monthly basis. Departmental leaders should explain any significant variances. This report should also be reviewed with the board, elders, and/or deacons.

#6: Request an external audit.

Hire a neutral third party to audit the church’s accounting records annually and provide their findings to the senior pastor, board, elders, and deacons. This brings in unbiased experts to provide their opinion regarding how your accounting team is performing and the effectiveness of your accounting processes and policies. This process also provides another layer of accountability. Consider providing the results of this audit in an annual report to the congregation.

#7: Hire experienced accounting personnel.

Hiring a member of the congregation to oversee your finance office due to a family relationship and the individual’s willingness to take a pay cut isn’t wise. You can’t afford to have church finances poorly managed, so invest in a qualified individual who has years of proven accounting experience. If you can hire a CPA, that’s great. If not, at least hire someone with an accounting degree and 5+ years of experience (with great references and a clear background check). Also, outsourcing tasks that require more experienced staff could be a more economical option. Then have a CPA review your financial records at least annually.

As your congregation entrusts you with their tithes and offerings, take these steps to ensure those finances are spent effectively and with integrity. It’s easy to overlook the back-office processes since they don’t immediately look like ministry. However, maintaining the trust of your congregation and the community is a foundation upon which you build ministry.

Deborah Ike is a writer, church consultant, and the founder of the Church Operations Toolkit, www.churchoperationstoolkit.com.

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