Money and ministry, continued
A standalone essay, but the continuation of a theme that plagues me
In conversations online and in person with other ministers, this quick example, a composite to be sure but a pretty close picture, helps me explain how I’ve ended up dealing so often with financial matters as a pastoral matter.
They often begin with another church leader coming to me first, explaining they or their class or group had helped out the household in question, but now found themselves not sure where to go. They’d helped with an immediate bill, but now . . .
Let’s use as the primary example an elderly couple, owning their home, having about $1,800 a month in Social Security income. They had been using savings to pay bills like the twice a year property tax, which we’ll call $2,200 a year, so $1,100 in the spring and fall. They have spent down all their savings, and when the crisis struck, it was a notice on the house from the county, three non-payments in a row, for $3,300.
An immediate payment of $1,100 had been made, but then the person handing off the challenge to me explained they learned there was still $2,200 owed, and the situation would recur in a few more months, so could I help them look at what their options were.
After some back-and-forth (in most cases), a meeting and discussion would reveal that average household expenses were $3,000 a month, so $1,200 more than was coming in . . . and the savings are gone, remember. So how were they . . .?
Usually, it would turn out that there was $10,000 to $30,000 in credit card balance among five or six credit cards. Part of that average $3,000 a month was paying the minimums on them. The plan, such as it was, involved the expectation of dying, counting on that consumer debt to be voided on their passing.
Oh, and if you’re wondering: it was not at all unusual the last twenty years to get to this level of near-bedrock reality before learning that, in fact, they had already gotten and spent a reverse mortgage. So the house was not exactly an asset. It was where they lived, a place from which they did not want to move, but for which they must pay property taxes twice a year. The injustice of this I’ve heard much about over the years, and I’ll admit to complicated feelings on the subject, but after the venting, we’d get back to brass tacks.
Oh, and I don’t like Tom Selleck anymore. Sorry, Magnum, but you’re dead to me. You know why. Reverse freaking mortgages. Dang.
Obviously, most churches can’t “help” most people in these situations to stay in their home and maintain their lives as they have lived them to date. And here we introduce the Anna Karenina problem expressed so well by Leo Tolstoy: “All happy families are alike; each unhappy family is unhappy in its own way.” Argue with the truth of it however you wish, but I will note that the resolutions for the many situations similar to what I’ve just described were all quite different, mostly unsatisfactory to all concerned, but in details it would get too close to indiscretion, so I’ll pause here (just where it’s getting interesting, I can hear some of you thinking).
Are there community assets and resources which can help? Yep. They’re not always what the parties involved want, and sometimes near relatives who’ve not been involved much will jump in to object when the help goes down roads they don’t think are fitting for the circumstances. I’m squirming even writing what I am, because the assumptions and expectations around privacy and confidentiality and secrecy are the cotter-pin holding these messes in place: if you don’t talk about it (or answer the phone, or open the mail) it will go away. Talking with strangers, let alone the pastor, pokes all kinds of soft spots and pain points, and again, I’m not talking just about the people in a financial fix, but of their friends and family who have their own odd investment in keeping the secret. The secret of debt, the secret of unpaid bills, the secret of running out of savings. Talking openly about these things is unforgivable to some.
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Which is where I pivot back to church life and congregational fiscal management. My history with this subject is complex, and doubtless unique, but I have to start somewhere, and this is the most solid ground I can find to stand on.
I have an unusual background for a parish minister, or that’s been my impression. Before I went to seminary, I had spent time on a church board, as a member of a pulpit (search) committee, and been a church treasurer. That isn’t common in my experience with my colleagues. It gives me some advantages, at least in anticipating certain complications which have taken fellow ministers by surprise; it’s also not been as much help as I might have thought.
When I was in seminary, over a four year span, I got into church finances very little. I learned quickly how record keeping could be sketchy — we were a church with about 120 a Sunday which claimed some 1,200 members, and sitting through a Membership Committee attempt by the senior pastor I served with to cull those 1,200 was a learning experience, but one I found myself repeating, not benefiting from. Still, that’s not finance.
Our fiscal issues were hugely complicated by the fact that a year and a half into my four years there, we burned the church down. This simplified the membership roll question, and frankly, our finances became byzantine due to insurance payments and special gifts and other one-off issues, so there’s nothing from that period that helped me see more clearly how church finance worked. I DID learn a great deal about architects and real estate and construction bids which did help me later.
My first church out of seminary and my first true full-time, benefits-paying church position, I went in with a sense that I knew what to ask and how to listen. I was very specific about asking if the compensation they were offering me was in the budget already, and I was assured that it was.
Yeah, many of you are already laughing. It was in the budget, but that’s just a planning document. Did they have the money in the bank, and the giving already incoming, to cover the position? No. Was I lied to? Not exactly. I did learn how to more carefully ask the question in later years and other interview processes — I also would learn the more carefully you phrased such questions, the better the quality of untruths you’d get told. Hold that thought.
So I ended up sitting in a church member’s basement office, coughing in the cigarette smoke, as she and I sorted out what the actual position of the church was. Treasurer’s reports were . . . odd. They existed in a bubble of past reality and current deposits and payments, and unless you had a stack of them to reconstruct for yourself, you really couldn’t tell where the church stood. I was not the senior pastor, but my wife was applying to grad school, and I needed to understand things. So this was my homework, and here I had a blessing in a treasurer who was happy to share information with me.
It turned out that monthly income had not matched expenses from well before my arrival on the scene, and six months in, the net expenses over income was some $30,000. That was more than my compensation package.
We made some discreet statements and some progress was made, but I can sum up by saying over the next few years, the expenses were greater than the income in ten out of twelve months, but the two months of surplus would whittle the deficit down to a manageable number, versus the net reserves whose amounts and restrictions were in multiple buckets controlled by various factions or groups in the church, so it could look solid from one angle, and near collapse from another. No checks bounced, but I was warned I might be cut or cut back to half time at least four times every year I was there.
My next ministry position was a solo pastorate, but I ran into a very interesting challenge there. I had asked very careful questions, and gotten pretty detailed answers, that seemed to indicate this was not going to be precarious from the outset, and the current state of giving and spending was sustainable even going back from an interim to my arrival. Yet about six months in, with the board reports of incomes and expenses looking very favorable, we were suddenly told we were tens of thousands in deficit, and that cuts might need to be made.
Full disclosure here, trusting in a statue of churchly limitations going back thirty years. I picked the lock of the treasurer’s office. The treasurer was cordial, but not willing to share any information other than board reports, of which I only had six or seven, due to “confidentiality.” And I couldn’t make sense of things, but couldn’t get answers, either. This treasurer, though, had an office in the church building. So one quiet morning I got in and accessed (Scout’s honor!) just the financial records, so I could figure out how we could have more giving than spending for months on end, yet end up in a deficit.
God bless her, she had grown up old school, with the assumptions every regional minister and the general office wish local church treasurers would have, up to a point. She made a point of sending off a monthly check to the then-BMF of ten percent . . . of the budget. Every month.
Yet the budget, which is as I’ve said a planning document, at this church was wildly larger than average costs, in support of a long-standing mandate true at not a few churches, that any expenditure from within the budget can proceed, but if an expenditure was beyond the line items in the budget, it had to get board approval. So the budget was drawn up, and approved, in excess of what likely spending would be. Call it a $180,000 budget when an average year actual expenses were $120,000.
This is how we got into a deficit. We were bringing in $10,000 a month, expenses were $10,000 a month, and we sent another $1,500 on top of that to Indianapolis. After six months like that, we were $9,000 in deficit.
When I first tentatively observed at a leadership meeting this appeared to be what was happening, it was met with a flat denial. And I couldn’t explain my certainty that, no, that’s exactly what you’re doing. My guess then and now years later is that when giving was strong and consistent, you could do that and it never really showed up, other than reserves that should have grown but someone would have had to keep their own records of board reports to realize “wait, shouldn’t the net reserves be $18,000 higher by your account?” But if the reserves grew a few thousand a year, no one noticed and it didn’t matter. Over time, the steady whittling away happened as giving settled into a figure closer to expenses.
Again, the church was able to pay all its bills, but not keep up the 10% off the top as calculated off the budget. As memory serves we’d spend down the available reserves with no change in giving or expenses in another two and a half years. But it took almost another six months to get the leadership around to making our “missions giving” tied to what came in, not to what we forecast we’d spend per budget, which meant we gave less, and some were unhappy with me . . . not the regional minister, who took no time at all to understand what I was explaining when I told him what we needed to be doing.
I’ve served a number of other churches since, and interviewed at a few, gathering what financial data I could to sort out what I was being told versus what actually was happening. And for my sins, I ended up becoming regional treasurer pro tempore for almost two years (same song, second verse, a little bit faster and a little bit worse). So I have a data set of sorts to work with here.
Local church finances tend to default to the norm of their leadership’s financial understanding.
That’s not meant as a slam, or even as a critique, but as an obvious statement of everyday fact which we’d all do well to consider. You may have a church treasurer who is a CPA or a Ph.D. or even an attorney. Great! (Maybe.) You surely have church leaders who are street smart but not financially literate. Generally, those folks won’t end up tapped as treasurers or financial secretaries — and if you ask me for a final formal pair of distinct definitions for what the two are, I will laugh in your face, and say “it depends on what their governance documents say and how the position evolved over that church’s history.” Often one is the person who monitors expenses and payments, and the other tracks giving and deposits, but I’ve seen those flipped. It’s never (okay, almost never) due to someone trying to hide something. It’s due to the fact that even forty years ago, these are a tedious, technical, sometimes complex tasks which many churches still expect to have done for free, by volunteers.
Today, that’s virtually impossible. Personnel and HR (human resources) issues under law, worker comp payments let alone Pension Fund dues, filing W2 or 1099 paperwork: it’s beyond a volunteer in most cases. And if you have a volunteer who knows the legal context and the mandated requirements who is doing it, you still have the dilemma of just how much you can expect of a volunteer.
Which is where I will repeat: Local church finances tend to default to the norm of their leadership’s financial understanding.
You can have a very smart person who doesn’t get the distinction between a budget, and actual financial statements. There are plenty of intelligent people who don’t understand the nature of a trust or a bequest. You can have a knowledgable person who can talk accurately about IRA RMDs (look it up, friend), but not get the difference between restricted and unrestricted funds.
And plenty of people don’t get percentages at all, and glaze over when you are talking about sums in the thousands. What you end up with, when all is said and done, is there will be a norm, an average comprehension of financial matters, which fiscal reports will settle into.
Local church finances tend to default to the norm of their leadership’s financial understanding.
That means your average financial awareness is the level of output your fiscal team is likely to respond towards, because they are all or mostly volunteers, and people can get impatient with things they don’t understand, so you have to assume that there’s a tendency to oversimplify or gloss over the complex elements of what it means to have to manage cash flow, maintain investment accounts and non-profit status, or file necessary forms for insurance and inspections. Some churches have trustees who help; some churches have trustees who are a property committee of sorts who are more comfortable with questions of maintenance of boilers than management of HR issues. Which is a nice way of saying many churches have trustees, but they don’t always help when it comes to fiscal management.
Because to go back to my grim and recurrent nightmare of an opening, situations like that are not unusual in my pastoral experience. Not everyone, but every year there’d be one or two (or three) like it to smooth over, sort out, and ideally refer to those who actually have skills in the areas needed. But do you see what I’m saying here?
Those sorts of situations aren’t unheard of among those who are making decisions for local churches. And if they get into their circumstances through a mix of denial and desperation, you can’t be too surprised if their approach to church finances are somewhat unrealistic.
I write and post this not to say every parish minister should become a competent accountant. That’s getting pretty far out of your lane. I will say if you are a preacher who ends up on a few non-profit boards (that’s not just me, is it?), you’d best be getting up to speed on profit and loss statements, HR rules, and the actual cost of benefits. However, you can find in church life as I have too many times that it’s you and often ONE other person on the board who understands that most union employees are NOT paying 100% of their insurance . . . when six other board members are certain they are. Don’t even get me started on Social Security/FICA and what employees pay versus self-employed idiots like myself. You can’t assume there’s a majority who get it even in formal leadership positions, let alone the church as a whole.
Congregations need to get real about how we manage our giving and expenses, and an actual financial professional at some point needs to be involved. For many small and even mid-sized churches, this means a NEW cost when they’re running behind on current expenses. I know. But litigation or judgements against local churches can close them entirely.
Commissioned and ordained ministers rarely know half what they should, and when they know stuff, their knowledge is not always welcome, if it has to do with financial affairs. But the wider church is getting smarter about having resources and tools and even people to help with sharing the hard realities of what it means to live in a world where money is a means of exchange, and ministry is something churches would like on a full- or even just half-time basis from a trained person. If we want solid, reliable ministers and effective ministries, we have to be able to talk candidly and in detail about financial matters.
It’s a poetic irony that as I was finishing this essay, I learned that Bruce Barkhauer is planning his retirement, having helped establish the Center for Faith & Giving in our general offices. He’s had these conversations with hundreds, nay thousands of clergy and church leaders. He’s earned his retirement with years of hard work — but we need more of them, and we need Bruce’s tribe to increase and multiply.
Blessings into your retirement, Bruce, and may the church honor him by continuing to talk openly and honestly about money and stewardship and finances into the future.
How can we do this? My suggestions (not Bruce’s, by the way; he’s not responsible for my Substack maunderings, poor man!) would be:
If your church is still 100% volunteer driven for deposits & payments, cheerfully & calmly ask about whether professional support has been investigated, especially for payroll & HR matters. Again, there’s a cost here, but the costs of doing it wrong are huge.
Professional accounts don’t mean there’s no place for volunteer leadership out of the church; the flip side here is that if you go 100% to an external treasurer function, you’ll get reports which are audited and accurate . . . and incomprehensible. It’s the job of a Fiscal team or Stewardship Committee or whomever to figure out how to take the cold numbers and turn them into narratives and stories and people. Ministry is about people, even if it’s done with money: do the Christ thing, and put flesh on those figures for the good of the church.
Be willing to work with stewardship matters. I know, I was that guy once. I didn’t want to “do fundraising” and math scared me. Still does. But I learned in a variety of contexts in living out the calling God gave me, in the church, the community, and more widely, that I needed to speak the language of finance to keep the basic functions working. It was as if I wanted to call myself a physicist but didn’t want to do any calculus let alone quantum mechanics. Faith & Giving, as Brother Bruce put it together, is a close fit. Remember something about where your treasure is, and your heart?
Give, and talk about it.
Okay, this is a tricky one, but I’m putting it here anyhow. I think, as my last essay tried to outline, there was a toxic intrusion into church life around secrecy and confidentiality around money. We’ve maintained the cultural norm by the justification “we don’t think those who give more get more influence in the life of the church,” but how has that actually worked? In my experience, with limited specific knowledge but lots of perspective now to rely on, people who give peanuts try to throw their weight around as “you don’t want to lose my giving” pillars of the church — and I won’t say major donors don’t try to have influence, but it happens less than you might think, and it’s not like confidentiality has prevented those folks from doing so, or trying to.
My previous essay outlined how the rise of unions and collective bargaining created a very new norm of salary secrecy — imposed by management. It filtered into church life. I don’t think it has helped. What has the potential, at least, to be toxic, is the culture of secrecy that makes all kinds of shifts and movements become more covert, incomprehensible, confusing. If you’re going to stop giving because you’re unhappy about something in church life, confidentiality hasn’t prevented that, it’s seemingly made it worse.
So I’m not saying go back to posting at the end of the year what each household gave (but we did that until about ninety years ago), I’m saying make sure to be clear that giving is a priority and part of your spiritual disciplines. Giving is one of the ways you express your faith and values. Say you’ve given; you don’t have to say how much, but you can talk about it. It’s okay, really.
The guilt over debt and running out of money? That’s something we need to talk about in church life, too. I think it’s also an imposition on Christianity. That’s not encouraging people to spend more than they have — our culture is doing a FINE job of that, thanks Tom Selleck — but lifting the anxiety so many have over not being able to make ends meet. Especially at the end of life, and the widespread fear of “outliving your money” which is the secret topic of so many senior gatherings.
In a church tradition jam packed full of seniors and retirees, it’s a simple point of evangelistic malpractice if we can’t speak to this fear. We must talk about it, free people from fear, and help them work together to build up hope. That’s what I think Jesus would be talking about today, and I hope to heaven I’ve done so appropriately in my time in parish ministry.