The financial pillar of the local church is spirit-led giving through faithful stewardship by its members. While there is a spiritual dimension to this that cannot be measured, there are some tangible ratios that can help you gain a better understanding of your congregation and its giving patterns. These ratios represent important indicators every church should understand.
1. Net Income Ratio
The ratio of “Change in Unrestricted Net Assets” to “Unrestricted Revenues”
The purpose of this ratio is to show whether the results of your church’s general operations are positive or negative, and by how much. It answers the question of whether the church is making or losing money in its basic day-to-day function of ministering to the local community. Obviously a church is not a business and is not trying to generate a profit. However, if a church is continually losing money in its basic operations, it will eventually reach a point where it is no longer able to function and will close.