ECCU Blog

What is the one area that we see derail more ministries than any other? I’m sure you’ve already guessed that it has little to do with macro economic conditions or the weather.

In good times and bad, the area that poses the greatest threat to ongoing success in ministry is a loss (or perceived loss) of integrity.

Here are three steps you can take to ensure that your ministry keeps—and strengthens—its financial integrity.

1. Create an involved finance committee. When I meet with churches, the norm is a conversation with the senior pastor and a bookkeeper—the best have a competent and involved team of people who work together to ensure checks and balances.
2. Hire an outside CPA. If your ministry has more than $500,000 in annual income, we recommend that you minimally have a CPA compilation every year, and I’d suggest a CPA review as well.
3. Communicate with your congregation or donors. Stay in regular contact with updates about the financial condition of the ministry. This not only ensures that they understand and can hold leadership accountable, but also makes it easier to ask for additional giving when it’s needed.

Of course, it helps to find a financial institution that is aligned with your values and works to preserve your financial integrity (Hey, I can’t resist…this is important!). Look for product offerings that reinforce your commitment to integrity (like ECCU’s Positive Pay, which ensures that every check your ministry writes is verified for the same amount when it hits your account), or services like our ministry banking assessments to keep your financial strategies on track.

Bottom line: Accountability is king. The more safety nets you have in place, the less likely you are to fall.

What does your ministry do to protect financial integrity? Please leave a comment and share your practices with our readers.

I recently ran across an article in Leadership Journal that posed this question: Should pastors know what people give? I wanted to hear more on the subject, so I did a little research of my own.

My first call was to Doug Roller, associate pastor at Grace Church of Orange, CA. He told me that who gives what is never brought to the pastors’ attention—it is strictly between the giver and God. “However,” says Roller, “we are very intentional about teaching what the Bible says about giving and fostering a culture of generosity within the church.”

Brian Kluth, former senior pastor of First Evangelical Free Church of Colorado Springs, CO, writes that pastors should not be completely in the dark about giving patterns. He suggests that perhaps a more appropriate question is, “What should a pastor know about people’s giving?” Kluth builds a strong case for certain instances when it is wise for the pastor to be notified about an individual’s giving habits, like a sharp decrease in giving or when being considered for a leadership position within the church.

Others have taken a similar middle-of-the-road approach. Joe Ward of Walnut Ridge Baptist Church in Mansfield, TX (featured in the Leadership Journal article), encourages churches to periodically evaluate giving practices and notify senior leadership when appropriate. “While consulting for a church a few years ago…a giving analysis showed that 80 percent of the church’s income was given by two individuals in their mid-70s… [The church] was two funerals away from losing their cash flow. This information allowed the pastor to see the need to develop leadership, do more on stewardship, and challenge people with a vision.”

And some believe that, without a doubt, pastors should have full visibility of giving practices. They see it as an opportunity to know their sheep and “provide specific counsel and spiritual development tied to members’ tithing,” according to the Leadership Journal article.

Whatever your church’s policy, Leadership Journal recommends disclosing it to your congregation because donors need to have a realistic expectation of privacy. 

So, what’s your ministry’s policy? Post a comment and share your thoughts.

The difference between banks and financial cooperatives like ECCU isn’t a topic that usually attracts a lot of attention. Well, I couldn’t ignore an article in the most recent issue of The Christian Century titled “Where’s your church’s money?”  

It starts by introducing the Move Your Money project, which urges “people to move their money from scandal-ridden megabanks to local institutions” like community banks and credit unions.

As if that wasn’t compelling enough, it introduced the Appleseed Fund, “which declared that it would no longer invest in…the five ‘too big to fail’ banks,” making it “the first socially responsible investing firm to exclude banks from its investments—in effect adding banking practices to other issues of moral concern, such as alcohol, tobacco, pornography, working conditions, environmental impact and weapons production.”

The more I read, the more tempted I was to holler “Amen!” Here are a couple more excerpts:

The new focus on banking practices forces us to consider banking as a moral issue. For many of us, choosing a bank is a matter of finding convenient branch locations, low fees and high interest rates on savings, CDs and mutual funds….I suspect this is how most churches choose their banks as well. We look for the best deal and then pat ourselves on the back for our good stewardship.

The challenge is that banking has a high level of invisibility. We deposit money and we withdraw money, but what the money does once it disappears into the bank is, or has been, largely invisible (and uninteresting) to us.

Before launching into a lengthy (but still compelling) discussion about the biblical view of usury, the article raises an important question: “Can churches become more discerning about where they keep their money?”

The question raises another that we’ve been asking more often these days: Do you know how your deposits are being used? Because ECCU is a financial cooperative comprised entirely of evangelical Christian ministries and individuals, we can respond by saying that our deposits are always used to resource ministries and never for causes contrary to Scripture.

It’s encouraging to hear a conversation like this in a national venue. What do you think? How concerned should ministries be about what happens with their deposits?

Earlier this month, we looked at two recent cases of church embezzlement, and the “zero tolerance” stance judges are starting to take against these crimes.

Unfortunately, yet another big headline has since emerged—this time, the leaders of a 150-member Greek Orthodox Church in Connecticut discovered someone potentially embezzled more than $1 million. Federal authorities investigated the claims, and in an arrest made Tuesday, authorities say the suspect, who oversaw the church’s investments (including managing the building fund and endowment) allegedly used the money for his businesses, according to the New Haven Register. The church’s attorney, and federal documents released with the arrest, allege the 50-year-old man stole more than $2 million from three parishoners, and potentially millions more from the church, the paper reported.

As incidents such as these continue to spring up, we’ve compiled the Top 7 resources church leaders should use to prevent embezzlement opportunities and combat individuals who might attempt to steal:

7. The National Association of Church Business Administration. Phill Martin, NACBA’s deputy chief executive officer, is a Contributing Editor to Your Church. NACBA offers ongoing certification that covers a variety of subjects, including church financial management. The organization also recently released “Weeds in the Garden,” a book about preventing fraud in churches.

6. The Evangelical Council for Financial Accountability. Dan Busby, the ECFA’s president, is an Editorial Advisor for Church Law & Tax Report, Church Finance Today, and Your Church. The ECFA publishes best practices on its website, as well as a quarterly publication, Focus on Accountability. The organization also plans to host numerous regional workshops throughout the country in 2010 focused on establishing higher standards in church finance and governance, among other things.

5. Secure Your Church Finances, an electronic training resource from ChurchSafety.com. This free online assessment will help you determine whether your church’s money is at risk.

4. Safe Ways to Handle Your Church’s Money, an electronic training resource from ChurchSafety.com. The free article from this resource outlines several initial steps to take.

3. Church Finance Today, a monthly newsletter written by senior editor Richard Hammar, one of today’s leading thinkers on church law and finance matters, covers key financial and tax developments that church leaders should know.

2. Chapter 7 in Richard Hammar’s four-volume series, Pastor, Church & Law (4th ed. 2008) (also available by calling 1-800-222-1840). Chapter 7 addresses the following topics:

• Definition of embezzlement
• Why churches are vulnerable
• How embezzlement occurs
• Reducing the risk of embezzlement
• Responding to allegations of embezzlement
• The consequences of embezzlement
• Confidentiality and privileged communications
• Informing the congregation
• Avoiding false accusations
• The Employee Polygraph Protection Act

1. Essential Guide to Church Finances (Christianity Today International, 2009). This new book, co-written by university accounting professor Richard Vargo and Vonna Laue, a CPA and partner at nonprofit accounting firm Capin Crouse, maps out how to plan and budget, how to set performance measurements, how to create church financial reports, how to conduct church audits, and how to minimize the risk for embezzlement.

Matt Branaugh is director of editorial for Christianity Today International’s church management publications and resources. His current duties include editing Your Church magazine and TheYourChurchBlog.com. Used by permission.