Money Matters: Financial Management for Congregations
As organizations largely staffed by volunteers who may not have a business or accounting background, congregations will want to establish systems, policies, and procedures to reinforce financial health and vitality.
It’s also vital to prevent the opportunity for mistakes or malfeasance by any volunteer or leader--no matter how loved and trusted they may be. It is unfair to put people in situations where their reputation is their only protection against accident or allegations of dishonesty. Instituting checks and balances protects both staff and volunteers by preventing the opportunity for misappropriation of funds.
Of course, no system will completely protect a congregation from possible financial loss.
In This Section
- By UUA Congregational Life Staff GroupHaving a healthy culture around money will help a congregation have less anxiety and more open communication around money.
- By UUA Ministries and Faith Development: Office of Church Staff FinancesAll financial best practices depend on reducing the risk of embezzlement or theft by increasing transparency and detection by creating systems and roles that segregate key duties.
- By UUA Ministries and Faith Development: Office of Church Staff FinancesIn setting up church financial management software, it’s important to provide safeguards to prevent tampering with the electronic records
- By UUA Ministries and Faith Development: Office of Church Staff FinancesThe Sunday offering is fairly vulnerable to theft or embezzlement unless good checks and balances are in place.
- By UUA Ministries and Faith Development: Office of Church Staff FinancesAny petty cash kept in the building should be in a locked file cabinet or safe and should be disbursed only upon submission of a written request.
- By UUA Ministries and Faith Development: Office of Church Staff FinancesWhen making sure that your bills are being paid efficiently, accurately and on time, your congregation also needs safeguards to make sure no one has the opportunity to use your system to embezzle funds.
- By UUA Ministries and Faith Development: Office of Church Staff FinancesUS tax law provides that staff may consider certain items as usual business expenses that are reimbursed beyond the compensation paid to individuals as a necessary expense that is not reported for income tax purposes.
- By UUA Ministries and Faith Development: Office of Church Staff FinancesEmployees and volunteers should be reimbursed for approved church related expenses upon submission of receipts and accurate expense reports that conform to the annual budget and IRS requirements.
- By UUA Ministries and Faith Development: Office of Church Staff FinancesMany congregations supply a credit card to more easily segregate work-related expenses. Staff members would only use the card for professional or church expenses.
- By UUA Congregational Life Staff GroupBecause relationship, compassion and trust are all qualities that congregations are trying to cultivate, church members and staff can fall prey to bad actors and con artists.
- By Renee RuchotzkeWe often claim that budgets are moral documents, and that congregational budgets should reflect our values. But line item budgets that include "office supplies, utilities, salary" and other such descriptions don't show how these line items serve the mission of the congregation. How might we re-imagine how we categorize our expenditures?
- By UUA Congregational Life Staff GroupIf dropping a check or cash into the basket is the only way your congregation invites financial gifts, many in your pews can’t participate in the offering even if they feel called to do so.
- By UUA Congregational Life Staff GroupWhen it comes to tracking financial gifts from members in the form of pledge payments and other donations, it's important to remember that the gifts of money are a form of relationship, not just another financial transaction.
- By UUA Ministries and Faith Development: Office of Church Staff FinancesThere are nuanced tax rules regarding income derived from renting your building and/or parking lot, depending on its relation to your core purpose.
- By UUA Ministries and Faith Development: Office of Church Staff FinancesOnce the salary and benefits are set by the appropriate church leadership based on recommended practices, it’s important to make sure the payroll is handled accurately and confidentially.
- A portion of the money in the church’s checking accounts may represent money that is held for specific restricted purposes, including various religious education accounts, social action accounts, the minister’s discretionary fund, etc.
- By UUA Congregational Life Staff GroupYour operating budget helps your congregation live its mission in the world. How you allocate your resources reflects your values and goals.
- By UUA Congregational Life Staff GroupA congregations’ income ebbs and flows, so it is a good idea to have some cash reserves that can help keep the bills paid in the summer when attendance and pledge payments fall off.
- By Jan Gartner, UUA Ministries and Faith Development: Office of Church Staff FinancesYou’ve probably heard that there are special tax rules for ministers. Most church leaders don’t need to be experts on ministerial compensation, but it’s important to understand the basics of how payroll and taxes for the minister differ from other employees. ...
- By UUA Congregational Life Staff GroupA Minister’s Discretionary Fund is an account that the minister or pastoral care team can use to provide confidential assistance to those facing emergency financial need.
- By UUA Congregational Life Staff GroupFinancial reports help the finance committee and the board assess the financial health of the congregation so they can make adjustments or decisions as needed.
- Rarely can congregations pay for a full-blown audit of the church books by a CPA. An alternative is a management review of the congregation’s cash management procedures, which can be done by any other accountant or experienced church bookkeeper.
- By Kim SweeneyEmbezzlement from congregations is not unusual, and it almost always occurs when one individual has been granted such a high degree of trust with no safeguards.
- Endowments need special handling to ensure transparency, accountability and impact.
- By UUA Ministries and Faith Development: Office of Church Staff FinancesUU Congregations are churches, and exempt under U.S. Tax Law. There may be advantages to seeking 501(c)(3) such as sales tax exemption.
- Consulting, Publications and Connects for Congregational Finance staff and leaders.
About the Author
The regional Congregational Life staff are congregations' local connection to the UUA. All of the program Congregational Life staff have expertise in most aspects of congregational life and each also has a few program areas of expertise. See the UUA Congregational Life Staff...