The line between the church and the business is very thin. On one hand, the church is a non-profit organization, and on the other hand, you can’t run it without money. Most churches, if not all, depend on congregational donations and tithes, which have gone about 50% down since 1990.
The thing is, both sides should be treated with the respect and strategies they deserve. This is to say that you should take church business as is, a business. You have church employees to pay off, church rent and utilities, programs to fund, and charities to help.
The question is, how do you handle the business aspect of the church? How do you handle the congregational donations and run the church without any problems? Well, we’ll guide you with the best church business tips and help you run your church efficiently.
Start By Considering How Healthy Your Finances Are
To effectively handle your church business, you first have to consider how healthy your church finances are. There are two things that will help you make this determination, which is your budget and the giving practices in your church. There are certain questions that will help you figure this out.
First, does your church pay all the expenses on time? Do you have an adequate emergency fund, and do you have a sufficient undesignated reserve? How effective and ongoing is your church’s giving campaign?
Do your church members support missions locally and beyond the local church? Are you currently building towards expanding the church? The answers to these questions will help you determine where to start when it comes to managing church business.
Create a Church Budget
One of the best ways to manage your church business is by creating and managing an effective budget. Start by assessing the current state of your finances by checking out the last 3-years of financial statements. Go through your church attendance books and check how giving your congregation is.
Are you experiencing an increase or a decrease in the donation amounts?
The three imperative benchmarks for your church budget include personnel, office expenses, and building/facilities. Once these are taken care of, then you can set the remaining funds for your savings and charities beyond the local church.
Now that you have gathered all your documents, the first thing you have to do is set annual goals for your church. It’s important for you to define your mission for the year and all your budget requirements that need to fit in those plans.
One of the best ways to come up with church goals is to ask your congregation members what they would like. You can discuss everything from building and growing the church to serving the community and helping other charities.
Discuss how you would like to advance your missions, increase congregational attendance, or start outreach programs.
Once you have your goals outlined, you should get the best software programs for your finances. There are many accounting tools out there, and you can click here for one of the top church management software in the market.
Stabilize Your Expenses
Depending on what you find on your financial records, it’s imperative that you stabilize your expenses. Go through your current expenses such as upkeep, utilities, payroll, and ministries. Make sure you are covering the costs and have an influx of money to keep them covered in the future.
This process will help you break down your church budget and allocate funds appropriately. Now that you have a church management software program, it’s important that you update it on a regular basis to make sure you track incoming and outgoing funds.
It’ll help you make any necessary adjustments to make sure you have enough funds at all times.
Build Your Church a Financial Reserve
Now that you have your finances in order and your church business has started to run smoothly, it’s time for you to grow an undesignated reserve. This money will strengthen the future of your church, and you’ll be prepared for anything unexpected that comes up.
A reserve is generally not something to worry about because you generate it by putting aside an unrestricted surplus of the money you have.
Keep Track of Your Expenses and Donations
The tithes and donations you receive are the lifeblood of your church. It’s essential for you to determine the fundraising capabilities of your church, which will help you assess the financial health of your congregation. Start by considering the overall giving compared to your overall attendance.
A giving unit can be a family, a couple, or an individual who donates to the church. Consider how many units are giving and divide your annual donations with that number to understand how much each unit is contributing.
With this figure in mind, you know that if you increase members, your budget will increase. If you were to lose members, then you should plan accordingly for the loss of their contributions.
Consider Setting Up Recurring Giving
We’re living in a digital world where a lot of congregants prefer to contribute through online payment methods. The beauty of this is that you can encourage your church members to automate their contributions.
When you have some of your members contributing automatically on a recurring basis, you’ll be in a better position to budget for your expenses and church taxes.
Encourage Your Congregants To Give More
This can be a hard conversation to have for most church leaders. You don’t want to make it seem as if the only thing you’re after is the money your congregation contributes and donates. However, if you’re going to run the church business efficiently, then you need to talk to your congregation about giving.
To begin with, it’s important for you to update your congregation on your current church finances. You can choose to do it per week, per month, quarterly, or annually. Make it very easy for your congregation to donate, given that different generations prefer different donation methods.
Have different payment options such as mobile giving, online giving, recurring donations, online typing, and the like.
Church Business 101: Everything You Need to Know
As a church leader, it’s a given that you’ll find yourself doing things you’re not trained for, such as managing the church business. With the tips above, it will be easier for you to manage your church finances. You should also consider getting church management software, which will make the process even easier for you.
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