What does good look like in terms of church finances? How can we be godly and effective in this area?
Key indicators to watch
Monthly givers
Is the total number of givers trending up or down?
Monthly giving
Is the total giving income trending up or down?
percentage givers
What proportion of potential giving units (esp within the membership) are giving regularly? Is that percentage trending up or down?
Gift Aid
What proportion of giving has Gift Aid applied? How well is the church utilising Gift Aid?
Cash Flow
What is the forecast for cash incoming versus outgoing for the next 12 months?
Budget V Actuals
Are income and spending in line with budgeted levels?
2 more instruments to have in place and check on periodically
Reserves policy – clear and agreed. What is the current actual level of reserve?
5 year financial plan – credible and sufficiently detailed – e.g. for how long are you going to rely on reserves, what growth in giving is possible, what staffing will you need for growth, what are two or three possible scenarios, how can you avoid having to sack several staff in 3 years’ time?
Other metrics you may want to keep an eye on
- The spread of your giving – are 20% giving 80% or is it more equally distributed?
- Proportion of budget spent on staffing and on mission giving – is the church polity happy with these proportions and what is the extent of these budget commitments – i.e. how quickly and to what extent could these budget lines be reduced if necessary?
- How do giving trends compare with economic and demographic trends? – e.g. how is giving compared to inflation or growth in wages or change in age profile? Do these factors partly explain trends in giving or is giving performing better/worse than you would expect?
More resources:
- Briefing papers from Stewardship on finance and governance – e.g. how to chose the right accounting software for your church or what are the important financial controls to have in place
- Treasurers Lunchtime Dial in – regular free webinar from Stewardship
- Stewardship Consultancy Helpline
- Stewardship Payroll and Accounts Examination
- Connect Supply – reasonably priced admin support for churches including bookkeeping and payroll
- Fundraising tools
- Cash flow basics (including downloadable cashflow planner) from Heelan Associates (see also their YouTube channel – mainly targeted towards small business owners but lots of explainers are relevant to accounting and bookkeeping for churches/charities)
