The church's first squabble was over finances, and ever since, pastors have wrestled with what role to take in church money matters. They are trained and called, as those early church leaders put it, for "prayer and the ministry of the word" (Acts 6), yet ensuring wise management and distribution of church funds is also essential to a church's health.
What is the pastor's role in the financial process? How close to the money should the pastor be?
To find out, LEADERSHIP editors Kevin Miller and Marshall Shelley went to Hartford, Connecticut, a center of insurance and finance, and talked with four experienced pastors:
-Stanley Allaby, who has ministered for thirty years at Black Rock Congregational Church in Fairfield, Connecticut, and serves on the boards of the National Association of Evangelicals and Sudan Interior Mission.
-Ed Hales, pastor of First Baptist Church, Portland, Maine, who served as stewardship director for the Baptist General Conference for seven years and is a member of the standards committee and board of the Evangelical Council for Financial Accountability.
-Roy Jacobsen, who for sixteen years has served the United Methodist Church of New Fairfield, Connecticut, which is currently in a building program.
-Manzer Wright, for ten years pastor of First Assembly of God in Brookfield, Connecticut, and who has been through three major building projects.
Leadership: Most pastors are called to preach and give pastoral care. How important is it that pastors have a "carnal knowledge" of numbers?
Ed Hales: Whether we want to or not, when we're dealing with a corporation that's expending, say, a quarter of a million dollars a year, we have to be pretty well versed in finances, unless we find other persons to handle it.
Roy Jacobsen: The gift of administration might not be the gift the minister has, but in our polity at least, one of my roles is chief administrator. I'm fortunate, however, to be in a church that has CPAs and a number of people gifted in administration, so I am able to delegate some responsibilities.
Stan Allaby: Yes, you can delegate, but the buck still stops with you.
Leadership: What did you not know about church finances when you entered the ministry that you've had to learn the hard way?
Manzer Wright: In one church I served, the treasurer was under the impression the money belonged to him. He would not even bring a report to board meetings. If I had to do it again, I would remove him immediately, even though he was one of the hardest working people in the church. It was one of the most frustrating things I've had to experience in ministry, not knowing the income or expenditures of the church.
Hales: The opposite of that was the first treasurer of my first church. He was relentlessly meticulous in detail, which was fine. But at each monthly business meeting there was a financial report, and I saw attendance at those meetings dwindle because who wanted to sit through a listing of every expenditure?
Allaby: When I took church administration in seminary, it was basically on how to deal with lay committees. I began to see the need for knowledge of management and finance, so I've been picking up American Management Association courses on the side.
Jacobsen: Experience teaches you. Our church was small and it has grown gradually, so I've been able to grow with it. At one time we had a financial secretary who would collect the offering, pour it into her pocketbook, and go home. I had to establish some procedures: dispensing stewards separate from the collecting stewards, two people on counting teams, this kind of thing.
Leadership: What are the dangers of becoming overconcerned with financial matters?
Hales: Inhibiting ministry. We need to be businesslike, but we also need to recognize that God's business has an element of faith and anticipation. There has to be balance. Otherwise we see only dollar signs and don't see there's spirit and life in all we're doing. The church is not just bricks and mortar; it's people involved in ministry.
Allaby: It's dangerous when a balanced budget or a surplus in the emergency fund becomes more important than adding a needed staff person or beginning an important new program.
Hales: One pastor I know asked his board, "Would you rather have a church with a million-dollar endowment or a million-dollar deficit?"
Everybody opted for the endowment.
He said, "I've pastored in both situations, and I'll take a deficit any day."
I think I understand what he was talking about. You can become so caught up with accumulating, having reserve funds and cushions-all of which are important-that holding on precludes outreach and expansion of ministry. If we must have a financial safety factor before we do anything, then let's take the name church off the door and call it something else.
Leadership: First Baptist Bank? (Laughter)
How do you instill a ministry mindset in people who watch the numbers?
Allaby: Partly through your sermons, reminding people that buildings and funds are always a means to an end, never an end in themselves.
Also, we try to get the nominating committee to populate the board with a balance between stewards and visionaries. I'm up front with the nominating committee and tell them we need some people who are going to take a sharp look at every penny as well as some who will think through the bigger issues of how money needs to be given away.
Leadership: What about the flip side? What are the dangers of a pastor ignoring church finances?
Hales: Let me answer with a story. When I was involved in stewardship work with our denomination, a church in the Midwest invited me to lead a stewardship-commitment Sunday, the first they'd ever held. The church was young, but had grown rapidly and had recently built a quarter-million-dollar building. These days, that would be three-quarters of a million.
Before the service, I met with the deacons in the pastor's study, and they told me what good things God had been doing there. "We've never ever had to talk about money," they said.
We prayed, they left, and then the pastor and I walked from his study to the sanctuary. The pastor put his arm around me as we walked and said, "Ed, our finances are lagging, and we are in a critical situation. Frankly, the whole future of our church depends on what happens today."
One reason churches neglect financial matters is because of those attitudes: pride says, "We don't have to talk about money" or fear reasons that if we talk about money, people will think we're looking to line our own pockets.
Time and again I've heard a board say to a pastor, "Pastor, you take care of the spiritual things; we'll handle the money." Those kind of people can cause an unhealthy neglect of finances. You end up preaching on stewardship at the worst time-when you have to. The best time, of course, is when things are moving ahead and you're doing well.
Allaby: I make a distinction between preaching about money and pleading for money. Telling the congregation we are running behind is something I hate to do and almost never do. I think I've done it three times in thirty years.
But I make no apologies for preaching on stewardship and money. I use testimonies of people who have given and been blessed. So we talk about stewardship a lot, but we do not beg and plead for specific needs. I think that gives a terrible image to the Christian church.
Jacobsen: One of our most important tasks is preaching and teaching about stewardship. Earlier in my ministry, I just didn't do it. I felt awkward about it, as if it were unspiritual. But through the wise counsel of others, I do it often now. I tell my people I tithe and I think it's important for them to tithe. It took a lot for me to overcome my reluctance, but I feel the Lord has blessed this direction.
Leadership: Is it part of your job to stimulate giving?
Allaby: Yes. I try to do it through enthusiasm, personal commitment, and information. I like the motto of one missions organization: "Full information, no solicitation."
If we have a need or we're facing a deadline, I let the people know. Right now, for example, we're trying to wrap up phase one of a building program, and we've had in the bulletin for the last three weeks, "We need fifteen thousand dollars by November 9 to dedicate phase one of our building debt free." We present that fact, but there's no begging, no pleading. Each quarter the trustees put in the bulletin a statement showing whether we're ahead of or behind budget. Giving that kind of information normally stimulates giving among people who are sincere about the Lord's work.
Jacobsen: I don't think it's my job to raise money; that's the work of the Holy Spirit. But it's my job to raise the issues with our people.
Hales: As pastor, I believe I have the responsibility to help raise money. I've seen a lot of Christian organizations go out of business because the executive director had the attitude, I don't raise money. That's like a cleaning lady who says, "I don't wash windows." Any person who's going to head up a Christian organization had better recognize the fact that he's going to have to raise money or that organization isn't going to make it. I know a pastor's role is a little different. But if a couple wants me to go with them to their attorney to sign their house over to the church in their will, as happened recently, then I'm delighted to go along and smile. Whether we want to be or not, we are development people.
Allaby: The lay people who are working hard on a program feel betrayed if the pastor doesn't give them support. Sometimes trustees have chided me, "You're not giving us the up-front support we need." Or the missions committee says, "You need to give us more emphasis here." Now, we can't respond to every squeaky wheel, but I don't want my lay people to feel betrayed by my failure to help raise needed money.
Leadership: Do you know or want to know the giving patterns of individuals in the church? Some pastors feel they need to know so appropriate pastoral care can be given in this important area of discipleship. Others say, "I don't even want to know who tithes, because it will lead me to treat people differently based on what they give." Where do you stand?
Allaby: I don't want to know. I don't trust myself. When I'm discipling someone, I talk about tithing. I ask the person to try it. But I don't ask if the person actually is or not.
One thing has been helpful, though, and as far as I can tell, nobody has resented it. Some time ago I taught on spiritual gifts and had people take tests and indicate what they thought their spiritual gifts were. I said we were going to use this information in the ministry. A number of people reported they had the gift of giving. I wrote each a letter and said, "I am delighted you have that gift. We need people with that gift, and with your permission I would like to write or call you once in a while to alert you to special needs and give you an opportunity to exercise that gift."
I have done that, and we've had some wonderful results. I always report to them what has happened, because I find people with the gift of giving like to make good investments. These people don't seem to mind my calling them. But I think people in my church would feel uncomfortable if they thought I knew what they gave.
Jacobsen: I don't think it's necessary for me to look at the giving records, although they are available.
It's important that people in leadership show their faith in active ways, but we don't say one must be a tither in order to be a leader. I think it's a matter of teaching what Scripture says about tithing. But we don't rigidly enforce it.
Wright: I'm not interested in knowing the level of members' giving; that's between them and God. But the deacon board is a different story.
My deacons are supposed to meet the standards set forth in Timothy and Titus, so I demand they tithe. I have instructed the treasurer to bring to my attention any deacon who is not paying his tithe.
When someone is nominated as a deacon, I tell him about this. If he becomes a deacon, he tells the treasurer his financial condition. Only the treasurer knows the level of each deacon's tithe, but through him I know when a deacon is not tithing.
Leadership: Have you ever had to call a deacon to account?
Wright: Once, and he started tithing again.
If these people are leaders, they need to be leading, not just in finances but in how they live. If there's sin in any area, it will influence me as pastor and the entire body.
Leadership: Ed, what's your approach?
Hales: Well, on this issue my belief and practice are two different things.
I believe that as a pastor I have the right and perhaps the responsibility to know what my people are doing in financial matters. Some years ago a member who was a manager in a grocery chain came to me and confessed he had been embezzling funds at work. He needed spiritual help. Now, is it less wrong to steal from God than to steal from your employer? I know some of our people are hindering their spiritual lives by stealing from God. So I think I have the responsibility to know.
But my practice has been to not exert that right. I could find out, but I haven't asked for the records. So I'm grappling with this. Perhaps if I'm going to do the things I need to do as a pastor, I have to talk with my financial secretary.
I do know at least three pastors who monitor giving patterns, and it has not been a detriment.
Leadership: If you did know, would you find yourself tempted to treat some people differently because they contribute more?
Hales: Once in a pastors' conference I shared my conviction that a pastor had a responsibility to know what his people were doing. Afterward, one of the pastors grabbed the lapel of my coat and shook me. He said, "I don't think I can be trusted with that knowledge, and furthermore I don't think you can, either." (Laughter)
But I don't know anyone who's been in the pastorate very long who doesn't know some things he wishes he didn't. How do we handle that?
I was not able to sleep last night because I was trying to put out of my mind a conversation I had with a man in my congregation. Sunday I spoke on the blood of Christ being able to purge the conscience of dead works to serve the true and living God. That prompted him to come and say, "Pastor, for decades I've been carrying something I cannot live with." He proceeded to put the kind of garbage in front of me that I will never be able to erase from my mind. I cannot reveal to my wife or anyone else the story that will be with me for the rest of my life.
Now how am I going to treat that man? I have to relate to him as his pastor. I bought that when I bought into the ministry. I hope by God's grace my treatment of him will be no different than of anyone else.
So when it comes to knowing what somebody is giving, hopefully I can handle it.
Leadership: As pastors, what part do you take in setting the budget?
Jacobsen: In our polity, the finance committee receives budget requests from church committees and presents them to the administrative board. Since the administrative board sets the priorities and pares down budgets, I take an active role here. Because I'm not chairman of the board, I can be a fairly vocal cheerleader, if you will, for various causes.
A couple of years ago, for example, some board members wanted to spend more on the missions program. Others didn't. I felt missions was important, so I taught about missions in the brief teaching time before the board meeting. I spoke up in support of the increase.
Allaby: The budget makes your program possible. It's where the rubber meets the road. So that is one time of the year I really involve myself.
Once the finance committee proposed cuts that endangered staff morale. I operate on the theory that the most important thing going for me is the morale of my staff. When that gets threatened I become deeply disturbed. So I really fought against the cuts.
Leadership: What guidelines help determine your budget?
Allaby: Our goal is to have church attendance grow by at least 6 percent a year. So often we take last year's budget and add anywhere from 6 to 10 percent to give us guidelines within which to operate.
We made a major exception the year we added three staff people. We upped our budget 40 percent. That was a year of watching every penny but we kept reminding ourselves that those staff people would pay for themselves in two or three years.
Wright: We don't necessarily fix it on last year's budget. We begin with requests from the various areas of the church.
We have fifty-eight departments in the church, and every one of them is responsible for producing its own budget and generating its own funds. For example, the Sunday school raises money for its curriculum by taking offerings in the classrooms. The men's department raises its own funds for retreats.
At budget time, the department heads review the budgets for their areas, and, with the help of the finance chairman, determine whether they're realistic or not. The finance chairman then presents these to the board. By the time we see the budget, though, the fifty-eight separate budgets have been funneled into about six general areas, and we just authorize the amounts for each of those.
This way, the board and I don't have to worry through every dime. And by making each department autonomous, the department leaders are more cautious about spending money for things that aren't necessary.
Leadership: Have there been times when you did not make budget, or it looked like you wouldn't? How did you handle that situation?
Hales: It is very discouraging, obviously, when you see there may be a shortfall. Normally you have to give a directive that for a certain period there will be no expenditures except for what is needed to keep the operation going. And you look for increased revenue as well. Occasionally special appeals do it, but it's dangerous to build an ongoing program on crisis appeals.
Allaby: As important as meeting the budget is, though, there can be a deadly mentality about meeting it. People begin to panic and focus on the wrong things. I have said over and over to my trustees, "God never promised to meet our budget. He promised to meet our needs." Sometimes you may not meet your budget, but then you find your needs weren't the same as your budget.
Hales: A fellow pastor used to say, "Don't say 'We went over the top.' I was around when we made that budget, and we pulled this out and pulled that out and got it down to its lowest level. We didn't go over the top; we went over the bottom." (Laughter)
We've got to remember that the budget is only a projection of our need and an expectation of response. It's not a limitation of potential. The budget is meant to be an authorized spending guide, not a straitjacket.
Leadership: How do we ensure the financial integrity of the church?
Jacobsen: We have an audit every year and keep an audit trail of all expenditures. I make sure checking accounts are balanced monthly and reports are in. On Sunday we have two unrelated people doing the counting, and another who checks that the money is deposited on time.
I feel responsible that these kinds of practices are set up and followed. If you have a schlock operation, people aren't going to be responsive in giving.
Wright: I keep weekly contact with what's happening. Every Wednesday I get a report from my treasurer of the week's income.
Then at the monthly board meeting, we receive a report from the treasurer that is also checked by the financial chairperson as a safeguard. And at the end of the year, the entire financial statement is printed and given to every member of our church.
Hales: We require that a minimum of three people do the counting, in the same room at the same time. When the envelope is opened, the counters verify that the amount shown on the front of the envelope matches what's in it. If it doesn't, the correct figure is marked on the envelope with a felt pen. The envelope then becomes the means of recording.
There's a reason we do that. Let's say the person counting money is counting alone. The envelope says $15, but when he opens it, there are two fives. He records it as $10. Later when the statement goes to that individual, that person may say, "But I always put in fifteen." Who's there to protect the counter and say, "No, on this Sunday you forgot to put in one of the fives?" We want to protect the counter as well as the givers.
We also break the chain in as many places as possible so the persons who receive, count, and deposit the money never are permitted to spend it. And at the advice of our accountant, we no longer allow the financial secretary or the treasurer to reconcile our bank statement. That's being done by the auditing committee.
Leadership: So the treasurer writes the checks and someone else balances the account?
Hales: Right. If we don't take care of these things, we open the door to great problems. In one church I pastored, just before I arrived it came to light that the former Sunday school superintendent had been embezzling funds. The Sunday school had a separate budget, and when a new Sunday school superintendent had taken office, she sent a check to a local missions agency. The agency wrote her, saying, "Thank you for your Sunday school's gift. We hadn't expected anything like this."
The superintendent called the agency and said, "What do you mean, you hadn't expected this? We've been doing this for years."
"Oh, no," they said. "We haven't had a gift like this from your church for years."
The trustees began checking into it and hired an accountant to do a five-year study. The accountant came back and said, "There's been a defalcation of seventy-five hundred dollars over that period of time."
The church got legal advice and finally agreed to have the person confess before the congregation and repay the amount. He did, but even many years later there were still wounds over it.
Eventually we let the guy usher one Sunday night. Immediately I got a note from a lady: "As long as he is ushering, I'm not going to put any money in the offering. I love him and I'm thankful for him, but to put an offering plate in front of him is like putting a bottle in front of an alcoholic."
The church reels for years. The pastor needs to be aware of the long-range ramifications of financial misdeeds.
Allaby: We pastors can be too nice, too gullible, too trusting. We finally went to an external audit when I found out our auditing committee had gone to the treasurer's house one night, flipped the pages, and said, "Well, everything seems to be fine." We asked the external auditor for recommendations on how to tighten our procedures, and we got five typewritten pages.
Leadership: How much does your audit cost?
Allaby: Six or seven thousand dollars a year.
Leadership: Ed, when your church had the problem with embezzlement, were audits being done?
Hales: The church had been receiving audits on a regular basis for years, but when I saw the first one after my arrival, I knew something was wrong. I'm not an auditor, but I knew it was not according to generally accepted accounting standards (GAAS) or generally accepted accounting procedures (GAAP). It didn't have the proper language in the opinion statement inside the front cover. So I called the auditor and said, "This really isn't an audit, is it?"
"Well, no," she said, "it really isn't."
I said, "Would you agree that our people think this is an audit?"
"I guess they would."
The church had for years been paying an auditor for something that wasn't an audit at all. I suppose in accounting terms you would call it a review. In a true audit, usually they'll take a couple of checks, or a couple of areas, and follow them all the way through. The auditor will contact a sample of the church's contributors and say, "The records say you gave x number of dollars. Does this square with your records?"
To get the first official audit is a horrendous amount of work, because you have to price every church item. But I feel the money you spend on an audit is some of the best you will spend. I have had to stand alone and really press for an audit sometimes. The board gets a little unhappy with the insistence of the pastor, but when the church blows up over some financial problem, the one thing they remember is who was pastor at that time.
Leadership: What effect does financial integrity have upon the church?
Allaby: If you haven't got financial integrity, you haven't got a message to proclaim. It's that simple.
Wright: Shortly after I arrived at one church, my son got sick and we went to the doctor. The doctor looked at me and said, "Oh, you're pastoring First Assembly."
"Yes."
"You know, I used to give services to clergy gratis as a professional courtesy. But I stopped doing that because of your predecessor. When he was here, his child had an operation. I asked him to pay only the operating room expenses, but he left town and never paid me."
I asked him what the amount was. Then I paid him myself.
I began to find out the pastor had run up bills all over town. My wife and I started paying the bills. In fact, we even started a small business at home to generate the money to do that. By the time we left town, the church had finally regained respectability.
When financial problems arise, there's more at stake than the reputation of a particular church or denomination. People in the community aren't conscious of the difference between one church and another. They just say, "It's those Christians. They never pay their bills." The name of Christ suffers reproach.
Allaby: The pastor has a responsibility to set the example in all of this. Once in a while, I'll spend church money while on a trip or get stamps from the secretary for personal use, and I'll always reimburse the church. Once in a while some generous board member will say, "Oh, you don't need to reimburse us for that."
I say, "Oh yes, I do," because I know as pastor, I set an example that filters through the entire church.
Copyright © 1987 by the author or Christianity Today/Leadership Journal. Click here for reprint information on Leadership Journal.
