Home Church Management Church Financial Planning: 4 Tips And Tricks

Church Financial Planning: 4 Tips And Tricks

by Aplos Success Team

Church financial planning can be difficult to master, especially when you’re operating under a tight budget. After all, one mistake can significantly set your ministry back. This is why proper church financial planning is so important. Below, you’ll find 4 methods for proper financial planning when it comes to your ministry.

1. Church Financial Statements

Stay on top of your balance sheet, your income statement, and your statement of functional expenses. For those who don’t know, the balance sheet tracks your assets, liabilities, and equity. Your income statement subtracts your expenses from your income to calculate your net income, and your statement of functional expenses shows how much money you’ve spent by breaking down each expense by fund and category. Balance sheets and income statements are used by both for-profit and nonprofit organizations, but a statement of functional expenses report is unique to nonprofits, due to fund accounting.

For a more in-depth guide on these reports, read this article on church financial statements.

2. Proper Budgeting

Take advantage of best practices established by the most successful ministries out there. Research how to effectively budget so you can maximize your money’s potential. Check out our article on church budgeting to learn how. Healthy budgeting lays a financial foundation for your church.

3. Create A Cushion For The Unexpected

Once you’ve started proper budgeting and find your church in a place where it’s running smoothly from a financial standpoint, you should start planning ahead. After all, you never know when life might throw a curveball where you’re in need of extra money. If a fire destroys your building or a child is accidentally hurt, the financial consequences could mean the end—if you aren’t careful. A rainy day fund never hurts.

4. Plan For Growth With A Gap Analysis

It’s important to have internal programs and controls in place in order to grow your church at a healthy pace that won’t exhaust your resources. An effective tool to help with this is a gap analysis. This type of analysis examines your current financial position and compares it to where you want to be. It revolves around your church’s vision and what you hope to someday achieve. It can even go beyond your finances and look at your organization’s program management, discipleship, and congregation experience.

Start by looking at the current state of your ministry. Consider the following example areas:

  • How long you’ll need to rent your temporary building until you can move to a permanent one
  • Whether you’re lacking volunteers
  • If your church’s program is lacking a weekly training curriculum
  • The demand for a process that determines discipleship

The Next Step: Email Course On Church Financial Planning

By staying on top of your financial statements, budgeting properly, preparing for the unexpected, and planning for growth, you’ll be able to support a thriving ministry. And if you’d like to further unpack the four tips listed above, consider signing up for our 4-day email course.

During this course, you will learn the things you can do now to lead your church to financial health. We are going to share a little of what we have learned over 20 years in advising nonprofits and churches. We will discuss how to be good stewards, how to utilize your board or elders, and explore some best practices for planning your finances. Through this course you will learn how to:

  • Cultivate strong leadership and accountability with your staff and elder board
  • Implement a financial stewardship plan
  • Demonstrate accountability for managing your funds
  • Make strong financial choices

About Our Presenter

Dan Kimball is a seasoned fundraiser with 20 years of experience in strategic fund development and nonprofit management. He’s aided in the development of multiple features for Aplos to help nonprofits and churches connect with (and cultivate!) their donors and members.

“Fundraising is a relationship business.”

You may also like

Leave a Comment