3 Steps for Avoiding Financial Crisis
How to create a healthy and God-honoring budget.
3 Steps for Avoiding Financial Crisis

A while ago I was helping a church that was in a major crisis, one that would cause it to close its doors six months later. "How must we change?" asked the interim senior pastor. "The first thing you need to do," I said, "is to do one ministry very well. And that ministry should be toward people who are outside the congregation, preferably people who are in great need, such as the homeless."

In that instant I could tell the pastor wrote me off. He tried to be polite and thanked me for my input. Realizing that I no longer had very much credibility with him, I pressed further. "In order to do that one ministry well you will need to make much deeper cuts in staff. And I think your compensation should be first. You make $75,000 per year. You will need to take a cut to $50,000 at most." From that moment on the interim pastor was always cordial with me, but not once did he ask for my opinion again. Three months later the elder board forced the interim pastor to resign due to mismanagement of finances.

What might have helped that church escape the "crash and burn" that it experienced in the years leading up to its demise? These three things:

  1. Each year publish the salary and overall compensation of the pastors of the church. The transparency of this act will automatically cause the budget committee or whoever oversees the finances to take a hard look at each person's salary. In the words or Ricky Ricardo in the I Love Lucy show, "you have some 'splaining to do!"
  2. Diversify the leadership team, especially in two ways. First, have men and women give input, perspective, and make decisions together on the use of money. Second, include a diverse socio-economic group: blue collar and white collar, educated and uneducated, etc. People with less money have a very different perspective on it than people with large amounts of disposable income.
  3. Track the actual money that is given to people and causes outside the church. This is not just about giving 10 percent to missions, although that might be one step in the process. More important is the focus and attention given to causes outside the congregation. This posture invites people in the community to become more and more sensitive to those less fortunate and in great need.

Brian Newman served as senior pastor of Crossroads International Church of Amsterdam for five years. He also served as an assistant pastor at a church in Geneva and as executive pastor of a church in Denver. He has consulted with a number of churches going through major transition.

Adapted from "Follow the Money Trail," LeadershipJournal.net, June 2014.

For information on church budgets, see the August 2014 issue of Church Finance Today and How Churches Spend Their Money—An Executive Report.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations

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