The Most Unique and Challenging Aspects of Church Finance
CPA Michael E. Batts shares how he felt drawn to the subject and what's facing church leaders today
The Most Unique and Challenging Aspects of Church Finance

You began serving nonprofit organizations straight out of college, and you discovered right away a calling to serve ministries. Is there a specific moment when you realized what you could bring to ministries and churches, at least as far as accounting and tax help goes?

Very early in my career, I worked in a CPA firm that served both businesses and nonprofit organizations. I had the opportunity and privilege to serve some of the ministry organizations, and I quickly realized that their needs and issues were very different from those of the businesses that our firm was serving.

I also discovered that our firm was not well-equipped to address the unique needs that churches and ministries had in terms of accounting and tax matters. I realized that to serve them well would require that I pursue learning more about those unique needs, which is what I began to do. And the more I did that, the more I realized I had found my life's work. Of course, now I have the blessing and privilege of leading a firm dedicated exclusively to serving and protecting churches, ministries, and other nonprofit organizations.

You mentioned that churches have unique needs compared to businesses. What specifically are those?

Specifically, the accounting for churches and nonprofit organizations is definitely different from that of business organizations.

The tax laws that apply to churches and ministry organizations are vastly different.

And ultimately, the motives and the purposes are fundamentally different in terms of the financial objectives.

I'd say those are the three big areas.

What do you think church leaders find the most challenging in their day-to-day work with finances?

I would say probably in the financial arena, the most challenging area is managing liquidity and financial position. And fortunately, I have an entire chapter dedicated to that in my book Church Finance.

Are the challenges the same today as they were when you first started working with churches three decades ago?

Largely they are similar. The big difference today versus thirty years ago is—I would say—the sheer number and volume of regulations to which churches and nonprofits are subject. We're in an environment where the laws and the regulations continue to increase in number and complexity. And so the job of leading a church or a nonprofit organization in this environment definitely involves more complexity than was the case then.

I'd say there's also exposure to risk as the result of that increased complexity, increases in litigation, and—sadly—increases in bad behavior on the part of some who work in churches and nonprofit organizations.

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