Question:

Financial Reports

As a pastor, I’m curious as to what other pastors do in terms of providing financial reports to the congregation. Most of the people in our church are fine to simply let our board handle all of that, but a few of the people are from church backgrounds where detailed reports are given to the congregation. How much information do most churches give out, and how/when is that information disseminated?

Responses:

Pastor Jeff Jones – Kalamazoo, MI
We publish our financials in our annual report which is typically distributed to our membership at the end of January each year. We do our best to simplify the records to make it easily understood by most people who read it.

Pastor Dennis Cummins – Puyallup, WA
About four years ago we switched from handing out the basic CPA statement to a pie chart showing monies in and out. We did this since most people can’t interpret a year- end financial statement produced by a CPA. It has been very successful. I believe in the four years of doing pie charts we haven’t had any questions or negative feed-back regarding the matter.

Reverend Mark Williams – Rockford, IL
Our church administrator prepares a detailed report on the past year’s financial income and expenditures each year. This report is presented in a public meeting on the first evening in February. This meeting is both for reporting and comments/questions from the church members. This is also a time for the pastor to share vision and goals for the new year. This has always been a time for new members to get acquainted with the manner in which finances are handled in the context of the local church family. Many have commented that this meeting gives them a sense of security within their local church and its leadership.

Pastor Diego Mesa – Rancho Cucamonga, CA
As a pastor, I believe that financial integrity and responsibility to the congregation is of utmost importance. For the past 15 years of our ministry we have always presented a financial report to our congregation in January. It’s done through a Powerpoint presentation at our Sunday morning services and takes approximately five to ten minutes. I’ve never been concerned about sharing the information with both visitors and members. I share with the congregation that this information is for the family of our church and can be discussed within our family but should never be taken outside of our church and discussed with people who may not understand or as a means of telling another church or pastor how to run their financial stewardship.

The categories that I use are broken into four parts with sub-topics underneath which gives a breakdown of expense costs. By the way, this is the same format I use in the day-to-day financial operations of our ministry: category one—building or mortgage expenses; category two—operations or equipment expenses; category three – personnel expenses, and category four—savings and missions expenses.

I don’t get into too much detail. It’s more of an overview. For example, category two—operations and equipment would list the total amount for utilities. I would not breakdown separate costs for gas, water, or electricity. Another example would be personnel expenses. I put all personnel salaries, benefits, and perks together and give the total amount not individual amounts. Each one of the main categories might have around five to eight sub-topics. For the savings and missions category I will share the total amounts that were saved that year. For missions, I will identify the mission and missionary and the amount given.

Lastly, I remind the congregation that all this information in detail is reviewed annually at our church board meeting. I have also had board members who are present during this presentation, stand to be acknowledged.

This procedure has always served me well with minimum to no repercussions. It creates an atmosphere of trust, gratitude and celebration by the membership of our pastoral stewardship that we are a ministry of integrity.

Pastor Sam Smucker – Lancaster, PA
We have an annual business meeting where we share the financial report. We keep it short and uncomplicated—we share the income for the year and how it was spent. We give out a written report. I believe it is important to communicate these things to the congregation openly and honestly. This brings a confidence toward leadership and a sense of security in the congregation. It is important for a congregation to have a high level of trust in its leaders concerning financial matters.

We have done it in various settings. (1) A meeting where the members are invited and we supply a meal. (2) The last few years we have taken 15-20 minutes at the end of the weekend services—where we finish the service and then dismiss visitors and invite the members to stay for a 15-20 minute meeting to share our annual financial report. We hand out a response card where the people can turn in a question they may have concerning the report and then we respond to them either by a phone call or email. (3) This year we are sharing our report electronically where we will have a link from our website that members can go to to hear a short 15-20 minute podcast where the financial report will be shared and then there will be a way for them to respond with questions. We will also have hardcopies of the financial report available to members who do not have electronic capability. Financial openness is important to the health of a congregation.

Pastor Bill Anzevino – Industry, PA
We have found that it is helpful if people are kept informed. At the end of each year we provide a report showing the totals of all income and expenses for the year. We don’t break down salaries for each employee, we only show the total of all expenses. This report is mailed to all members along with their annual giving statement. Then if any one has questions, they are free to contact the office where we would be happy to sit down with them and discuss their questions. We believe that in doing this it helps eliminate questions about if we are being wise stewards of God’s finances.

Pastor Timothy Kutz – Bartlesville, OK
There are three things that a pastor should think of when disseminating financial information for church consumption.

1) Provide all things as open honest before all men. (Rom 12:17)
2) People have a right to know of the financial health of the church.
3) The devil will absolutely, continually try to use this against you to destroy both you and your church.

It is never right to keep the church in the dark about the financial dealings of the pastor, staff and board. However, bringing every detail of the church’s financial dealings before the congregation is generally not wise either. The biggest example would be staff salaries. Staff salaries should be set by an independent group of people qualified to make staff compensation decisions. If those guidelines are followed, any desire or need for that information to become known by a congregant beside the pastor, salary committee and the board of trustees is misguided and should not be granted. It is not the pastor’s business what any given individual in the congregation earns as a salary; neither is it any business of any given individual in the congregation to know the pastors salary; or any other staff member for that matter.

Posting staff salaries in so very many cases has been a point of contention and strife and never leads to good. If you are going to post anything about salaries, lump all of the staff and any church employee salaries as well as all of their benefits into one figure and call that “Employee Compensation and Benefits.” With rare cases, this is the right way to approach this. You are not trying to hide anything; you are just protecting private information that is known by trusted, faithful leaders in the church as a matter of checks and balances.

Don’t provide specifics, but rather general categories and what you spent. If you want to post anything, think hard about posting income and (some) expenses (you’ll understand this better the first time someone comes to you and tells you that they think you are spending too much money on toilet paper and paper towels). Whether you or any other pastor likes it or not, there are people in your church that think they have a right to express themselves on how church money is being spent. These are things that should be addressed in membership class, but there will still be people that think they have the right. You will even find some who believe that God set them in your church by divine call to help keep you walking in what they think integrity is where church finances are concerned.

If you post your income and a limited number of expenses every week, that would be good enough for most everyone, and it would also serve to help you when you vision-cast. But anyone who is digging for more and is not a member of the board of trustees is not motivated by the right spirit and should not be obliged. If so, you are headed toward strife, division and trouble.

You can and should have a congregational financial meeting at the first of the year that includes a more detailed report, but still only shows the aforementioned salaries and benefits in one lump sum. But use this meeting to cast vision and talk about your stewardship campaign for the year.

Pastor Matt Beemer – Manchester, England
I have always lived by the scripture: ‘Provide things honest in the sight of all men (Rom 12:17). I always try to keep things in the light because wherever there is darkness, the devil can gain a foothold. We’ve worked hard to be balanced, but also keep things very open when communicating about finances to our congregation. Some of the ways we do this are:

• Print in our weekly notice sheet the tithes and offerings, as well as any designated giving for the previous week (ie: missions, building, guest speakers, etc.), as well as our monthly targets and the previous month’s totals.
• In January every year I set aside a couple Vision Sunday’s during which I report briefly on the previous year’s activities and include a summary of the financial position (including communicating what our new financial ‘faith’ targets are for the year).
• In addition we have two ‘State of the Vision’ opportunities in the year. One is in the spring during our ‘Annual General Meeting (AGM)’ which is required by the charity commission in the UK. This is an in-depth report on the previous year, including finances.
• The second ‘State of the Vision’ opportunity is normally on a Sunday in September.

Throughout these 15 years pastoring in the UK, I’ve never had a church member become upset about the finances in the church. I believe this is because we provide such a solid case for all we are doing and we keep people really informed. This may be a naive point of view; however, it is my belief that our church members are able to handle far more than we think they can.

Pastor John White – Decatur, AL
We publish a financial report at the end of each calendar year. We use to send a copy to each member of the church, but now as our membership has grown, we found it just as beneficial to report it in our church bulletin. We allow it to run in the bulletin for a period of one month. We report an abbreviated version and do not reveal anyone’s personal salary. All the salaries are reported but lumped together. What I mean by abbreviated is that we do not go into detail with all the small expenditures.

Dad Hagin use to always say that the proof of the pudding is in the eating. It is evident as one looks at our ministry that we are wise stewards of the money that God has placed in our hands. We strive for a ministry of excellence and no one has a problem when they see the results of their giving.

Over the years we have had very little complaint as to the handling of the church’s finances. Money is always a point of contention, but integrity, honesty, and openness dispels all accusations and complaints.

Pastor Jerry Weinzierl – Sterling Heights, MI
For many years we had an annual meeting where we invited the whole church to hear the financial status from the previous budget year and to see where our projected budget had been set for the next year. We would also outline the vision for the church at that time. The problem became that fewer and fewer people came year after year. A lot of work went in to something that our congregation no longer saw as necessary…so we quit having them. I must add however that I’m in my 26th year pastoring this church, so I’m guessing that over time people became comfortable with the levels of accountability we provide within our system of administration.

Now, if someone calls the office and would like a copy of our annual financial statement, we provide that to members only. It’s not specific concerning payroll, (who gets paid what), but shows the payroll expense, overall benefit costs, building, etc., under general headings with total expenditures listed. Our “chart of accounts” is several pages long so we create one (for members that call) with totals for categories rather than all the specifics within a category (hope that makes sense).

Rev. Dan Beller – Tulsa, OK
In my experience, I found more problems when too much financial information was given out to the congregation because it is misinterpreted and everyone judges from their own experience without contextual or comprehensive information. For example, a member of the congregation will judge the amount of a salary according to how much he or she is making instead of judging the salary in relation to the job description and the importance of Kingdom work.

If the congregation can trust the board of directors to deal with finances in a “representative type of government,” it is better than the whole congregation getting involved because they cannot have enough information to judge properly. The congregation should trust the board members whom they elect (or if the board members are appointed in some other way), to represent them well in financial matters. Usually, a congregational form of government results in more disputes and can interfere with the atmosphere of worship and the spiritual life of the church.

Detailed financial information and all other relevant data should be shared with the church board in a monthly meeting. The church board should make policies but not be involved in the administration of those policies. The day-by-day operation of the church and the administration of board policies should be carried out by the senior pastor, other staff pastors and church staff.

Pastor Brad Allen – San Mateo, CA
In our church, a one page YTD Income and Expense statement and a one page income/expense statement from the prior year are available to anyone who asks.

We had a couple join the church from a smaller church where finances were mishandled. They asked to see our financial statement, got one, and became great church members after reading it. It was important for them to be able to see it.

I have seen a number of small churches in our area where the pastor treats the finances like his personal checking account. It’s disappointing. Even, if you’re just starting out, set the pastor up with a realistic salary and have someone trustworthy keep the books who is accountable to the pastor and to a CPA who regularly checks the books.

I’ve seen churches where they publish their weekly offering amounts and monthly goals. This can be inspiring to the good givers but can seem strange to new visitors who are often staggered by the large numbers. I’d prefer giving amounts be known by my leaders but not published for new visitors.

Pastor David Emigh – Sand Springs, OK
In our membership classes I let the potential new members know that if they are a tithing member, our books are open. I mean by that that they can call my administrator and he will meet with them and answer any questions they may have. Other than that, I give an end of the year report every year on paper and place it out where people can receive it. In the past I would take a Wednesday night and go over the report but our people said they would rather receive the Word so now we place it out and they can take it home and read it. I also put on the report our harvest of people for the year.

If someone had a request for more information I would entertain their request and make a decision on that on a case-by-case basis. If their heart was right and they needed to know more, I would consider that. If I sensed that they are just problem people, I would not do any more.

Pastor Loren Hirschy – Dubuque, IA
Word of Life Church provides a yearly financial report (income & expense only) to the congregation which includes all income—designated and undesignated, and all expenses, including general fund expenditures and designated pass-through income such as missionary support, special events, etc. Compensation for salaried staff and hourly employees are reported in one category called compensation. We usually include a graph of the contribution Income for the year. These reports are made available for people to pick up at their convenience at our information center, usually by the end of February. Our pastor may schedule a member/regular-attender meeting to go over the information if he feels there is a need to communicate with the members of the church that way concerning vision or things pertaining to the past year. This same financial report is given to our financial institution every year.

Pastor Ray Almaguer – Glendora, CA
For the first several years I never did anything like this. Then I heard about other pastors providing financial reports and thought I would give it a try. I provided the previous month’s financial report on the first Wednesday evening of the next month. I didn’t print anything, but rather took the last 15 minutes of the service and projected it on a screen and then went over it. The expenses were listed in general groupings in order to keep things like salaries, etc., confidential. Most people were bored with this and just wanted to go home. So I quit doing it and nobody seemed to notice. This was many years ago. Our policy now is that the financial statements are available to anyone who tithes. I can’t remember the last time someone asked to see this information. It seems to me that as long as the people are seeing good stewardship in their leaders, they don’t worry about things like this.