2 of 3
 Is Your Church Fiscally Fit?Ten ways to assess you financial strength.
2 of 3
A little sleuthing at the local planning agency will probably produce a figure for average household income. Multiply that by the number of households in the congregation (and adjust a little for the comparative wealth of a given church), and this approximates church members' total earnings. Then, divide the church's total giving by its total earnings. If the result is 10 percent, the church is a biblical lot! More likely it's under 5 percent or perhaps around 3 percent. If we can find the figures, we can compare the percentage of income given in previous years to establish a trend. Income history"I always look at consistency from year to year," says Grace Nicholaou of Ministry Business Services in Huntington Beach, California. "Is the church meeting its budget? Are they consistently ending the year in the black? Can they pay their bills?" Trained financial eyes look at the trends: Is income rising or falling? For how long? Why? Do we have reason to believe the trend will continue? Ratios provide another benchmark. A 1989 study, mainly of larger churches, by Christopher Robinson, chief financial officer of Partners International, established a series of benchmark ratios. The median church: —Held 6 percent of its total assets in cash.Sources of income Where does church money come from—that is, besides God? One way to look at it is old money versus new money. Old money is what was given last year. Net new money is figured this way: pledges from new givers plus the increases previous givers have pledged, minus amounts no longer pledged and decreases in previous pledges. If the new pledges and increased amount of old pledges are greater than the lost pledges and the amount of decrease of other old pledges, we are ahead. Net new money tells us what additional funding we can expect in a given year. A second way to break down the sources of income is by age of the givers. Is most of the money coming from the silver-haired crowd? What will happen ten years from now? What percentage of contributions derive from the mid-adult age range of 30-55? Do they contribute more than their share or less? A third division is by size of gift. Do a few generous people underwrite a substantial part of the church's finances? Or is the burden spread more evenly across a number of smaller givers? Would the loss of one or two sizable tithes cripple church finances? By charting the number of donors in a series of giving brackets, we can see how a church's income is derived. |             |
share this page
