Many church boards have two main areas of focus: the faith-based aspect of governance and the business and stewardship aspect. It’s important for your church to balance the two, because a weakness in either can cause serious issues in overall governance.
Too often, we see church boards that are strong in one area but challenged in the other. Some churches are dominated by mission but lack proper fiscal management. Others are strong operationally, but lack leadership support for the “why” that drives the church’s vision and mission.
Although I’ve served as an executive pastor, a role in which I was concerned with both the spiritual and business sides of the church, the observations in this article focus on the business and stewardship aspects church boards must monitor.
Who is monitoring your church’s finances?
When talking with a new church client through my work with the accounting firm CapinCrouse, I want to find out who is monitoring the church’s finances. Sometimes it’s an elder. Sometimes it’s a subset of the full board. All too often, it’s no one.
I have seen churches rely heavily on the bookkeeper or executive pastor to monitor finances, but when that individual produces or receives the financial information, they lack either the time or expertise to use it strategically.
Unfortunately, this means boards don’t always have useful financial information on which to base their decisions. The challenge in these situations is that the internal reporting structure provides neither accurate nor necessary information to paint a true picture of the church’s financial health. Without that, the board can’t take appropriate action.