FINANCE

6 Tips for Managing Church Donations

In the United States, approximately 10 million tithers contribute $50 billion to churches each year.

Are you a church leader looking for better ways to manage church donations? To effectively manage your church finances, you need internal control measures put in place. That way, you’ll reduce the likelihood of getting the church funds misused or mismanaged.

Read along to get six tips for managing church donations.

1. Have Budgets

Budgeting is an important tool to ensure you foresee your expenditure and keep you in line from spending too much money. It gives church leaders an idea of the year’s expenses for them to solicit funding from the church members. It gives the church a framework as to how much they can spend in a particular month, quarter, or year.

Have a strict policy that if something wasn’t included in the budget at the beginning of the year, it shouldn’t be added later. Take time to create the budget and make sure everything the church is likely to spend on is in the document. How well you create the budget will influence the financial health of the church.

2. Members Involvement

Finances tend to be a sensitive topic that most people can’t talk about openly, especially in small churches. When it comes to financial issues, members have many questions running through their minds, but are shy to ask. To enhance transparency and accountability, involve your members more in financial issues.

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If the church is experiencing financial challenges, involve the members in coming up with solutions. Ask them which period of the year is more appropriate for setting up fundraising events to raise money for the church. Let the congregation know the projects the church is planning to implement and how much it would cost.

More so, you can get cost-saving ideas from the members to help you make more strategic financial decisions. You’ll get surprised how much members are willing to help the church become sustainable.

To put this into perspective, if you’re about to do church renovations, involve members in the project cost. Let them come up with ideas that will make the project less expensive and have value for their money. This will make them contribute even more since they know where their funds go and how they get used.

Have a continuous financial reports communication strategy that seeks to involve members. Share the budgets and any other important information in regards to the finances of the church. You can go further and make information regarding offerings and funds collected open for everyone to access.

3. Plan For Emergencies

It’s advisable to have a financial emergency plan in the event that something comes up and requires church finances. Imagine a scenario where bad weather conditions destroy the church structure. If you are the kind of church that operates on a tight budget, getting the church fixed would be challenging.

The church needs to set aside a certain amount of money to facilitate unforeseen emergencies. You should also have a plan for a financial emergency in case church donations and offerings reduce. Harsh weather conditions can affect member attendance, impacting the amount of offerings collected.

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As a result, the church might be unable to finance the budget. More so, you should prepare for those snow Sundays that might prevent the members from going to church. Have a plan to accommodate donation variances, making the church unable to reach its projected revenues.

4. Accountability

Getting accountable for every church donation and finances is key for every church institution. You should set up an oversight committee to monitor church donations and how they’re used to enhance credibility. The committee should ensure that the church only spends on what was in the budget.

The committee should liaise with the groups within the church to ensure they spend the resources allocated well. They should conduct audits on the various church groups to see how they spent the money allocated to them.

The committee should also be in charge of tracking church donations to appropriate how they got used at the end of the year. Having such an oversight committee enables accountability on the church donations.

The church can leverage church donation tracking software to enhance efficiency. A good example is the Icon Church Management tool, which is a web-based church software solution.

5. Have a Hierarchy of Financial Authority

Have a clear and detailed guideline on who is in charge of what and their underlying responsibilities in regards to church finances. To avoid embezzlement of funds, you can have at least three signatories for signing checks. The document should outline who is responsible for incurring debt on behalf of the church, and the spending limits.

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The document should outline the procedure of seeking funds from the church. There should be a process which someone should follow when making a benevolence request. The request should be in writing, explaining the purpose of the funds requested.

6. Do External Audits

Consider hiring a neutral third party to audit your church accounts at the end of every financial year. The results of the audit should be given to the church leaders and congregation at large.

The auditors should give recommendations on how church donations can be managed even better. This enhances the transparency and accountability of the church finances.

Learn the Key Things About Managing Church Donations

The above pointers come in handy in managing church donations to safeguard the trust of the congregation. Use the above tips to ensure your church finances are in order.

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