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An Opportunity When a Church Expense Runs High

Evaluation and communication can yield a far better return.

An Opportunity When a Church Expense Runs High

The question first came up while presenting the monthly financial report to our church’s governing body.

“Why are office supply costs so high?” an elder asked.

I hadn’t previously noticed, and I didn’t have a good answer to the question.

I discussed the variance with my finance team and sat down with the manager of our print shop, who handled all office supply purchases. No one had a good explanation for a nearly 15 percent expense increase.

What was happening?

Start by Watching

When it comes to managing a church’s money, leaders sometimes assume that they need answers to questions right away. My investigation into this question reminded me that isn’t always so. Budgets, income statements, and expense reports are complex for churches of any size, so to immediately recall every detail is impossible.

But you do need to be willing to figure out the answers.

Our team was. We started by monitoring expenses, flagging when, where, and by whom office supplies were purchased.

The mystery was finally solved.

Our staff of 60 people bought the office supplies they needed, often for upcoming meetings or events, by heading to local stores and purchasing them with church-issued credit cards. This may not seem like a big deal but it was. Team members—unintentionally, as far as we could tell—were circumventing our entire purchasing process.

That process called for them to identify their supply needs, contact the print shop manager who would place their order, and then have their supplies paid via a check request through the finance team. Doing this would help us get better pricing. Perhaps even more importantly, it allowed us to anticipate the costs for the office supply budget and to sometimes suggest more inexpensive alternatives. When team members used their credit cards, all we could do was simply assign the expenses retroactively to the office supply budget when the monthly credit card statements arrived. We were being reactive instead of proactive.

Help Ministry, Don’t Hinder It

We talked with staff members because we needed to know if the policy did not work for our ministry model or if we needed to coach our church leaders to get them on board with it. We never want a policy or process to impede ministry.

The conversations revealed that the policy was fine. Team members were either unaware of it or they forgot.

Over time, they came to rely on convenience to get supplies, often because they uncovered their supply needs at the last minute. Placing an order required a few days to fulfill, so a quick drive to pick up, say, pencils and notepads seemed innocent enough. It never occurred to them that this approach, repeated over and over again across multiple teams and departments, really added up.

They also thought that because their specific budget for an event or activity could accommodate the shopping expense, they were fine. They didn’t realize office supplies are a centralized expense, so when those expenses are assigned later, they don’t come out of the specific event budget. Eventually, that centralized budget suffered.

By explaining all of this, team members immediately understood the problem because they could see how higher expenses ultimately drained budget funds that could make other ministry work possible. They could also see how the additional administrative work of assigning credit card expenses further sapped valuable staff time.

Explain and Train

When something looks amiss, or someone isn’t following a policy, it’s easy to assume the worst. This is a mistake church finance leaders sometimes make. The vast majority of people don’t intentionally blow their budgets; they just see a need in a particular moment and try to meet it, not thinking about the financial consequences of doing so.

For our church, it was a matter of explaining the policy and the process supporting that policy then periodically revisiting the topic to make certain people stay on track.

The results have been positive.

First, team members plan ahead more. This helps them identify their supply needs earlier and even helps them see other opportunities missed by last-minute planning.

Second, they’ve started placing orders together. A specific item needed for a youth ministry event can also be used for a men’s ministry event, so one order can get placed. Bulk purchasing means even more savings.

Third, we lowered the spending limits on the church-issued credit cards, so when someone needs to exceed that limit, it offers another opportunity to evaluate the necessity of a potential purchase.

And last, office supply costs are down about 5 percent below budget, a significant swing in just 18 months compared to the original presentation to our church’s governing body.

An Opportunity, Not an Obstacle

Finance leaders often are the ones who have to say no because of costs, or the ones who have to enforce a rigid policy. However, our experience gave church financial leaders an opportunity to seek answers, communicate, and collaborate. This then allowed us to achieve the right outcome for ministry while providing the financial leadership needed to make that ministry possible.

Terrence Chavis is chief financial officer of Concord Church in Dallas, where 5,500 people worship each week.Matthew Branaugh is Editor of Christianity Today’s Church Law & Tax Team.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold 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." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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  • May 15, 2015

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