5 Best Practices of Church Financing Management

August 4, 2020

For a church to sustain its vibrant organization, ministries had taken a meticulous approach in managing their finances. However, talking about money makes them uncomfortable. The topic itself is connected to fear of being associated with bad examples, including issues on the embezzlement of high-profile ministries in local churches. The ministers do not want their members to think that discussing finances is self-serving, especially if their salary comes from the pledges of the people. But, discussing church financing management is crucial if they want to grow the assets of their church and become financially healthy. 

Often, churches lose their money because of mismanagement of funds. The number of expenses is higher compared to the number of funds pouring in. Therefore, to help you get in control of things, there are five best practices that you can follow to manage the finances of your church better.

Projections of Revenue

It is imperative to make realistic projections of revenues when preparing for the budget. Creating a budget will be difficult if the forecasts are not accurate. You have to consider the available money. To achieve this, analyze church financing historical patterns. Look into the donations of your members, their pledges, and attendance. It can also help when making budget estimates.

Avoid making projections with hopeful increases. Remember that your budget is per the amount that the church has. Hence, it is vital to base your estimates using the actual figures. If possible, look into the projection for the past three years. It can help show you whether there is a pattern of increase in your attendance and pledges. 

Creating a Budget

The role of the committee for church financing is to establish a budget based on the projection of revenue. They are also responsible for allocating funds to different departments of the church. Each department will create a budget based on the funds allocated to them. The committee head for the individual department is responsible for its budget estimates based on their projected activities and available resources. The distribution of responsibility for budget creation results in inaccurate reporting, thus increasing accountability and reliability when making future revenue projections.

Keeping Track of Your Contributions and Overlays

Regarded as one of the guiding principles for handling church financing, keeping track of your donations and expenditures will enable you to make an accurate estimate of your revenues.  It can also help if the contributions received versus the expenses of the church are enough or in a deficit. If the church expenses are higher than the number of donations or pledges received, then you will always experience a shortage of funds.

Emergency Funds

Establishing emergency funds is very crucial to any organization and should be part of church financing. It is a form of fund that is created and allocated for unexpected costs, such as restoring the church, which is damage caused by typhoons or earthquakes. Another unexpected situation is helping out church members during calamity situations. The church can take a portion of the emergency fund to give to the members of the church that were greatly affected. 

Using an emergency fund that is not considered an emergency is not a good practice. It is the role of each committee head to manage their activities according to the funds allocated to them. If they experience a shortage of funds, then they need to adjust their budget. The emergency funds are not a replacement for covering budget deficiencies.


Financial reporting includes an in-depth review of the activities of the Church. It will help you see the bigger picture where your church financing stands. The reporting can help each department head to be accountable for the funds allocated to them. It can help trace if there are deficiencies in their resources. 

The five best practices mentioned can help the church manage its finances well. If they have loans, a proper strategy in paying lessens the burden of going into bad debts. The objective of each church is to be as debt-free as possible. However, if there are situations where the church has to acquire a loan, make sure to include payment in your budget allocation. Else, your church might end racking up some debt.

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