This means that building trust and offering transparency have become more important than ever before for pastors, their staff, and their donors. Offering clear and honest financial communication is an essential part of today’s church stewardship.
Effective financial communication within a church goes beyond transparency and regular updates. It involves:
Tailoring reports to specific stakeholders
Educating the congregation
Facilitating interactive meetings
Maintaining comprehensive records
Adhering to ethical and legal standards
In part two of our blog on communicating church finances, let’s dive into these five best practices. You’ll discover how they contribute to a well-informed and engaged church community.
6. Stakeholder-Specific Reports
Different stakeholders within the church have varying levels of financial expertise and interest—from advanced to those with little to no knowledge. Customizing your financial reports to the specific needs of each group ensures that everyone receives important yet understandable information. For instance, the elder board might require a detailed financial analysis, while the congregation might benefit from high-level summaries..
In other words, tailored reports ensure that each group gets just the right amount of detail. This approach not only makes financial information easily understandable, but also allows everyone to make meaningful decisions based on their specific responsibilities.
7. Educational Initiatives
If your congregation doesn’t understand your church’s financial reports, what’s the point of sharing them? This is why offering workshops or informational sessions can make financial information more accessible.
These educational opportunities can cover topics like budgeting, financial planning, and understanding financial statements. Take it one step further by also providing other resources such as guides or simplified outlines. This further supports your congregation’s understanding and encourages them to participate more actively in financial discussions (rather than just sitting on the sidelines.)
8. Interactive Meetings and Q&A Sessions
Holding regular meetings where stakeholders can discuss financial reports and ask questions helps create a culture of openness and engagement. These kinds of meetings provide an opportunity for clarification and understanding, ensuring that everyone is on the same page.
Be sure to encourage open dialogue and be prepared to provide clear answers to any concerns that are raised. This practice not only builds trust but also shows a commitment to transparency and accountability. It allows stakeholders to voice their opinions and contribute to the church’s financial health.
9. Documenting and Archiving
Does your church regularly maintain accurate and comprehensive records of all financial reports and how they were communicated? This practice is essential for accountability and historical reference.
Establish a process that makes past reports are easily accessible through physical archives or digital platforms. This aids in transparency and accountability. It also provides a historical perspective that can inform future financial planning.
10. Ethical and Legal Compliance
Adhering to legal requirements and ethical standards is non-negotiable in managing church finances. All financial practices should comply with relevant laws and regulations. Communicate any changes in compliance requirements clearly and explain their impact on the church’s finances.
Ethical compliance goes beyond legal obligations — it involves fostering a culture of integrity and responsibility. Demonstrating a commitment to ethical practices builds trust within the congregation and assures them that their contributions are being managed responsibly.
Improve Your Finances without Breaking the Bank
By implementing these five best practices, your church can enhance financial communication and engagement, and this ensures that all stakeholders are well-informed, involved, and confident in the church’s financial management.
But here’s the deal — it’s hard to do all of this on your own without professional help. That’s why more and more churches are turning to Finch, PC
to handle their finances. Finch provides you with:
A dedicated team of accountants
Experienced analysts
Monthly reports
Financial statements
And much more!
The best part is you can get all of this for a small fraction of the cost of hiring an accountant!
Corey has 10 years of professional experience in financial planning and analysis. His previous areas of focus involved helping launch the Financial Services department of a large government contractor, where he developed the various reporting and budgeting systems.
Corey also actively manages Shorebird, a Registered Investment Advising firm that focuses on Financial Advising, Planning, and Investment Management for clients. He is also an adjunct finance professor at the University of California, Riverside for their graduate-level programs.
Corey received a B.A. in Business Administration at the California State University, San Bernardino; a Masters in Business Administration and a Masters in Finance from Indiana University’s Kelley School of Business.
Jonathan has more than 7 years of professional experience in corporate taxation and strategy with both public and private companies. His industry experience includes entertainment, church finances, medical device, and technology. Jonathan is also an adjunct professor at the University of California, Riverside (named a Best Business School by Princeton Review and named a Best Undergraduate Business School by Businessweek) and speaks at conferences on topics such as leadership and management.
Jonathan is a graduate of the University of California, Riverside and an MBA candidate at UCLA Anderson School of Management. He is a licensed Certified Public Accountant (CPA) in California.
Jonathan previously worked at PricewaterhouseCoopers, LLP where he specialized in corporate taxation.
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