Successful Church Finances
Pastor Dave Williams

Dr. Dave Williams, D. Min. is pastor of Mount Hope Church and International Outreach Ministries in Lansing, Michigan. Under his leadership, the church has grown from 225 to over 4000 members in attendance today. He has a heart for missions and a strong commitment to evangelize the lost. His God-given vision has led Mount Hope Church to sponsor over 40 daughter and neighborhood churches in Michigan, the Philippines, and in several African nations. He has a dynamic speaking ministry, and has authored more than 60 books as well as numerous audio and video publications.

How well I remember the marathon board meetings discussing – no, arguing – over the upcoming church budget for the next year.  How much should the youth department get?  How about the children’s ministry?  Music?  Education?  Salaries?  Where should we buy boxes of tissues and get the best price?

Department leaders were frustrated.  Board members were at each other’s throats.  And I, as pastor, started getting weary, dreading any board meeting where money was the topic.

Time Consuming Nonsense

It was all unnecessary time-consuming nonsense! 

No more.

We now operate on a system of simple guiding principles and practices that are fair, easily implemented, and make sense.  It took months to develop, but I decided that I’d rather go to heaven than to face any more of those December midnight arguments with six men who all felt they were financial experts. 

So, with the help of a truly good accounting expert, and a few brilliant minds who were not board members, we developed the “Sleep well tonight” budget system for Mount Hope Church.  Department leaders are now free of the monstrous task of trying to figure out a budget for the next year, and free to do what they are called to do – minister!

Idolatry?

Money mismanagement is related to idolatry.

Some pastors are chasing rainbows when it comes to church finances.  “If I build it, they will come,” they think.  Some even tell others, “God told me that.”  Well, maybe they are watching too many movies in their spare time.  I’m not saying that God cannot or will not speak a word to a pastor’s heart, but I can assure you, that “word” will never take the church into unsupportable debt.

Our former general superintendent, the late G. Raymond Carlson, during a meeting back in the 90’s, gave us his shocking report.  His research on ministers who had fallen into moral failure found that in every case there was also financial mismanagement involved.  Hmmm.

Luke 16:10-13 NLT

10 “If you are faithful in little things, you will be faithful in large ones. But if you are dishonest in little things, you won’t be honest with greater responsibilities.

11 And if you are untrustworthy about worldly wealth, who will trust you with the true riches of heaven?

12 And if you are not faithful with other people’s things, why should you be trusted with things of your own?

13 “No one can serve two masters. For you will hate one and love the other; you will be devoted to one and despise the other. You cannot serve both God and money.”

Principles

First let’s look at the principles.

Principle 1 – If money is the bottom line in all of your church decisions, then money is an idol.

Principle 2 – Outgo must never exceed income.  Simple, huh?

Principle 3 – Never borrow money to operate the church.

I know colleges and universities that borrow regularly to get them through the summer months, but it’s a bad practice.

One Christian University is trying to pay off $22,000,000 in debt they’ve accumulated over the many years of applying this “borrow” philosophy. 

When a church borrows money for general operating costs, it is a “death rattle.”

Principle 4 – Never incur consumer debt. 

In other words, NEVER borrow money or use a credit card on anything that depreciates.  Buses, vans, furniture, sound systems, and consumables all fall into this category.  

Use credit cards for travel and general purchases as long as you pay off the balance every month.  Never incur interest payments on credit cards.  And make sure that you are getting air miles, hotel points, of free gasoline with every credit card you use.

Principle 5 – Borrow short-term, and only on appreciating assets. 

Our rule is, if we need to borrow for construction or existing real estate, we make sure we can pay one- third cash and the rest must be paid off within seven years.  The property will have appreciated beyond any interest payments made.

Principle 6 – Always negotiate. 

We never take the first offer as “cut in concrete” when purchasing.  Negotiate with vendors and suppliers.  And make sure it’s a win-win deal.  Remember, your vendors need Jesus too and if you turn them off, you may have cut your opportunities to reach them.

Principle 7 – Nobody – I mean nobody – is ever alone with the money.

Set up security and controls.

Principle 8 – Develop a 13-week cash cushion to be held in a good investment account. 

If your average income is $1000 a week, you will need $13,000 in your “cushion account.”  This will be your “emergency only” fund.  After the emergency, you must be committed to replenishing the account.

Principle 9 – God has a plan for a church’s financial success and it doesn’t involve selling candy, peanut brittle, quilts, and cakes … or having rummage sales. 

Success in church finances comes when the pastor is unafraid to teach God’s principles of finance: tithes, offerings, alms, faith promises, and first fruits.  We teach people that if they give their broken lives to Jesus, that He’ll give them a brand new life and a home in heaven.  Then we teach people to give to God and expect nothing in return.  But that is not what God’s Word teaches. 

Malachi 3 – great promises for the giver.  2 Corinthians 9 – look at the wonderful promises for the generous giver. 

But are we afraid we may be labeled “health and wealth” preachers?  So what?  Teach God’s Word anyway, and watch your church finances expand and become even more fruitful.

Principle 10 – Always put mission’s giving FIRST, before the local church needs. 

Never cut a missionary’s support for the sake of a local project. 

If we expect people to tithe to the church, then the church should be tithing to missions, to the district council and to the general council.  At Mount Hope Church, we not only receive faith promises every year for missions, we also tithe on the general income.  And we haven’t been in financial trouble ever since implementing that practice.

Principle 11 – Pray in faith about all financial matters in the church. 

My dental hygienist once said to me, “I thought I’d be wealthy and retired by now.”  I responded with a smile, “You should have planned it that way twenty years ago.” 

I found you get what you,

(1)   Pray for,

(2)   Plan for,

(3)   Prepare for.

Principle 12 – Above all else, OBEY GOD.  

Do not make a decision based upon mammon.  If God says to build, you begin praying, planning, and preparing, and He will show you how to bring in the finances.  Do it on your own and, well … you’re on your own.

Now after having established these foundational principles, let’s look at the practical budgetary matters.

The General Rule

A general rule is “1/3, 1/3, 1/3.”  One third to missions, salaries, overhead, insurance, etc., one-third to building expenses, and one-third to ministries.

Now let’s get a little more specific.  And remember, you can computerize all this and make it an automatic, simple matter.

How to Divide the “Pie”

Okay, money comes into the offering every week.  How do you divide it up without having to worry about those annual “Budgets” that never seem to work anyway?  It’s simple once you get the hang of it.

You start with the weekly offering, let’s say $10,000 for simplicity’s sake.

Number One

The first thing you do is to remove all the designated money.  Some of it will be designated to “building fund” or “missions.”  My rule is to always maintain absolute integrity in money distribution.  Money designated to missions goes to missions; money designated to an approved project must go to that project.  Financial integrity is critical and non-negotiable.

Number Two

Now you have what is left over after subtracting the designated amount.  Let’s say the designated amount was $2000.  You now have $8000 left.  Now you subtract 10% (or $800) for missions, which now leaves you with $7200.

Number Three

Okay, now you have $7200.  From that, you must pay the bills, salaries, and any rent (or put it into an account that goes toward your monthly payment).  You will also designate some to an investment account and toward your 13-week emergency fund.  Let’s say this comes to $3200 total.  Now you have $4000 remaining of that week’s offering.

Number Four

You have $4000 remaining of the $10,000 income for that week.  You have eight departments in the church and every ministry falls under one of those departments.  Each department gets a “cut” of the $4000 that goes toward their “budget.” 

For example, if every department received an equal proportion, each would receive $500 for that week.

Now, it’s unlikely that each department will receive equal measures.  The music ministry is likely more expensive than accounting.  The youth ministry is likely more expensive to operate than the children’s ministry.  So you need to find the right percentages for each department.  This can be tweaked mid-year if necessary.

This is where some healthy research is going to be helpful.  Let’s say you discover it takes about $1 a week to minister to each child, and about $2 each week to minister to a member in youth ministry.  And you find it takes about $3 for each member of the music ministry due to the expenses of instruments, music purchases, etc.  And perhaps it costs about $1 each week for every adult. 

Let’s say the youth ministry has an average of 50 young people (50 x $2 = $100).  It takes a hundred dollars a week to operate the youth ministry.

Children’s ministry has an average of 200 children weekly (200 x $1 = $200).  In other words, it cost twice as much to operate the children’s ministry as it does the youth ministry.

Accounting 2% Adult Care 10% Helps Ministry 15% Music Ministry 20% Children’s Ministry 20% Youth Ministry 10% Outreach Ministry            10% Christian Education            13% TOTAL 100%

Total Offering $10,000 Designated 2,000 Missions Tithe 800 Overhead, Salaries, Etc. 3,200 Accounting 80 Adult Care 400 Helps Ministry 600 Music 800 Children’s 800 Youth 400 Outreach 400 Education 520 $10,000

Let’s suppose in the middle of the fiscal year, you find the youth ministry has doubled, but the music ministry has lost some members. 

Now you must tweak the percentages to reflect the change.  In this way growing ministries are rewarded with more of the “pie” so-to-speak.  You bring the youth ministry up to 20% and reduce the music ministry to 10%.  No matter what you do, the total percentages each department gets to operate must come out to 100%.

The beauty of this plan is:

(1)   No marathon budget meetings

(2)   No debt

(3)   Fairness to all departments

(4)   No headaches

This is the Mount Hope Church way of handling money. 

My prayer is that this plan will help you honor God in all your finances, and see amazing increases as you become more and more fruitful for Jesus Christ in your community.