Small Church Financial Stewardship
Last Sunday was our church’s Annual General Meeting. We always look forward to this meeting because, for us, it’s been a discipleship tool and a time of “body-building” among our members (the “church body,” I mean). I don’t recall ever really having much disagreement in these meetings, for which we praise God. We also take steps on our part to avoid any attempts to push our church beyond its means, either materially or spiritually. This makes for good meetings.
This year was a red-letter year in particular. In late 1998, we purchased our current church building. Last year we knew we were closing in on a final payout of the mortgage, the figures from the bank this year showed us that we’d reached our goal. Monday morning, before the bank opened one, of my deacons and I stood outside the doors waiting to be the first ones in. After the vote the day before, we wasted no time in going to sign the documents that would close out our mortgage — much rejoicing all around!
Yesterday we published an article related to church finances in Thomas Overmiller’s piece, “Is Tent-Making the Biblical Norm?” Coming the same week as our mortgage milestone, I thought an article on small church business philosophy might be helpful. Some of what I say might apply to churches of any size. I spent my whole Christian life, except for a few years in seminary, in small churches. I’m most comfortable thinking in small church terms. (And by small, I mean less than 100 people usually. Currently our church averages right around 50.)
Perhaps accountants would have more to say, or would correct some of what I say. Nevertheless, based on my own experience and observing the practices of others, I think there are things that pastors and churches should keep in mind in planning their business affairs. That’s our subject for this article.
Spending Only What You Have – not what You Plan
Each year we work at developing a church budget. We try to predict our giving, based on our history, especially the last year, and plan to spend (and save) within the limits of that projection. Sometimes our giving exceeds our planning, in which case we deal with the “surplus” in the following year. Other times, for various reasons, our giving may lag behind our projections. We discipline our spending in line with our actual receipts (and known upcoming bills) rather than simply “spend to our budget regardless.” Some small churches I’ve known foundered on this rock. You can’t spend what you don’t have.
Every week we publish our giving records in our church bulletin. We just want people to be aware of where we are in relation to our planning. Occasionally we remind them that we don’t spend more than we take in. I’ve avoided putting any pressure on our people to “make up the difference” or “catch up with our commitment.” My thinking is that the Holy Spirit is better at it than I am, if He wants our people to give more, he will achieve far more than I can. The only exception I can think of is one year we were quite close to our projection going into December. I suggested that our people consider a little bit more at Christmas time just to make our goal. Even that much “push” from me makes me uncomfortable. I’ll preach the giving passages when I come across them, but the church isn’t about money and I don’t want our people to think that it ever is.
Buildings and Mortgages
Some Christians have a conviction against mortgages, or loans of any kind. It is also true that many churches struck the rock of debt and really smashed things up. Prudence is always the key when it comes to debt. My own view is that debt for mortgages is acceptable, within one’s means. (That is, within one’s means to repay.) One of the “tent-making” jobs I had in earlier years was as a mortgage broker; perhaps that biases me in favor of them. Nevertheless, my brokering experience did give me contacts that procured a favorable mortgage when the time came.
How do you know if a mortgage is within your means? Where we live, the banks usually only loan up to 50% of the purchase price or the value of the property, whichever is lower. Banks have a reason for this, built on experience. Groups of people are less stable than individuals are. Sometimes, people in groups have a falling out, and suddenly the repayment of a loan becomes challenging to those that remain. The bank’s requirements are one test of “within our means.” Another is percentage of income towards building expenses (mortgage principle and interest vs. rent). With individuals, banks in Canada will only allow your total cost of ownership to be about 30% of your income. For a church, I would suggest that it should be somewhere around 25% at the top.
If your building costs exceed 25% of the church’s income, you should not buy, you should rent. You may also need to consider finding a cheaper rental! Land and building costs are astronomical in some locations, renting is challenging, and buying is even more challenging. Some church situations would not allow you to buy at all. In our own situation, if we were starting over today, buying land and building would probably be impossible. Our property is now worth far more than we paid for it. For a new church starting out in our city, rental would be in their future for some time to come. In any case, building costs can eat up a lot of church income. It is prudent to reduce that as much as possible and if the Lord gives the chance to buy or build, be sure that it is the right time and that you don’t run ahead when you should just be walking along.
Supporting Leadership
Property needs probably move churches than supporting leadership, but their first priority biblically is to support their pastors. Brother Overmiller’s article yesterday covers a lot of the Biblical grounds for this, so I will refer you there for Scriptural support. Small churches find it challenging to cover all their expenses, and certainly Baptist churches have a long history of “tent-making” pastors. The early history of the English Baptists records many men who also did something else to make ends meet. Tent-making, while not ideal, in my view, has a long and honored history among us. Our own experience is mostly a tent-making/missionary support experience. A few years ago, we ended missionary support, the church able now to take on the full support of the pastor, and now we’ve paid off the building. Praise the Lord; we think the ministry is on a sound footing for whoever takes on leadership in the future.
On the supporting leadership theme, however, I believe the church should learn to support leadership, even if only partially, right from the beginning. When a fully supported missionary plants a mission church, the church should as soon as possible prepare to pay for leadership. Perhaps one way to do this is to have a budget item called, “Pastoral Support temporarily diverted to Building Fund” or some such designation. The church should get used to the idea that they are preparing for a day when the missionary moves on and a pastor comes in. I’m thinking primarily in a North American context, of course. We want to get churches to be forward thinking, even when small, so that growth is expected. Ultimately, real growth is in the hands of the Lord, but we should train ourselves to think with expansion and growth on our minds. It isn’t just a matter of having soul-winning programs; it also means orienting every aspect of church life for growth.
Missions
A debate often comes up along the lines of this statement, “If a church can’t support a pastor, it can’t support Missions.” It is possible to over-burden a church budget on the Missions side of the ledger at the expense of taking care of essential local needs. However, the Missions budget can be a means of training God’s people about a biblical philosophy of giving.
I don’t teach a tithe for New Testament churches, in the sense of the Old Testament notion of a tithe. (I realize there are varying opinions on this!) Yet if we want to teach our people to give generously out of the first of their income, why wouldn’t we lead our small church to do the same? Very early in our ministry, when we only had a handful of people, we began supporting a missionary. Just one. The philosophy at budget time was that our goal was to have a standard for missionary giving of about 10% of the overall local offering. I don’t think we achieved that initially, but eventually we got there. Now that we no longer have a mortgage payment, we designated a small portion of our old payment to our Missions budget, which brings us over 10% for this year.
We don’t think we can manipulate God by giving to Missions, expecting him to give us more in return. Rather, we want to teach generosity, so we should be generous. We’ll let God worry about giving us increases in his own good time.
Working Within Your Own Limitations
I’ve already said a lot on this subject, and some of what I’ve said could be unique to our situation. I realize that. I hope you’ve gotten a bit of my philosophy, though. The objective of our financial plans isn’t simply to pay bills and deal with “secular needs.” Our objective is to teach spiritual truths by means of the way we handle our money. Small churches can’t do everything big churches do. However, we can work within our limitations to accomplish much for the Lord.
Our recent mortgage milestone came in the normal course of events. There were very few special fundraisers or large gifts. We simply steadily worked at paying off the mortgage. We’ve done a few other things as well. We put a new roof on the building, refinished floors, bought new chairs for the auditorium, put in new windows in the oldest part of the building, painted, built a handicapped ramp… much of that was along the way as extra funds came available. Sometimes the Lord gave us a unique one-time gift, like the time the old roof blew off. A unique gift pretty close to the amount we needed happened to come in right about that time. Praise the Lord. But mostly, all the Lord allowed us to do was through a slow and steady normal process.
We still have a list of other improvements to do. We can see a day when a building expansion might be a good idea. When the time comes, slow and steady is the way to get there, trusting the Lord and preaching the gospel to anyone who will hear while we are at it.
Don Johnson is the pastor of Grace Baptist Church of Victoria, Victoria, BC, Canada.
Excellent Article. Contrary to common thinking and practice, some larger churches could learn from smaller churches.