Part One: Getting Started

My Ministry in Finance

The ministry of the committee on finance is to nurture the financial vitality of the congregation. This is a comprehensive assignment that encompasses a variety of responsibilities, all of which are necessary if the congregation is to accomplish its vision for ministry. This Guideline provides a broad overview of the characteristics of financially vital congregations as well as the specific responsibilities of those serving on this important committee. This guideline should be used by the chairperson of the committee on finance, the treasurer, the financial secretary, and the church business administrator (if there is one).

FINANCIALLY VITAL CONGREGATIONS

To begin, what are the distinctive characteristics of financially vital congregations? Notably, these congregations are transparent in their relationship with money, think missionally about budgeting and fundraising, and engage in certain financial best practices. In Part Two, specific steps will be described that your committee can follow to grow toward greater financial vitality, but first let's begin with expanding each of these distinctive characteristics.

Financial transparency: Money is perhaps the most powerful force in our lives. Secrecy generally serves to increase money's power. Financially vital congregations do not conduct their money matters under a cloak of secrecy, but rather purposefully cultivate a culture of openness and transparency by (a) sharing clear, easy-to-understand financial reports with members; (b) implementing a strong system of internal controls; and (c) providing for an annual audit of the financial reports.

Missional budgeting and fundraising: In many congregations, the focus from week-to-week is on whether there will be enough money to pay the bills. Financially vital congregations, however, have moved beyond a survivability mindset to think missionally about budgeting. Rather than thinking in terms of scarcity, these congregations have allowed God's great abundance to frame their approach to budgeting and to raising funds to support mission. They recognize that, perhaps more than anything else the church says or does, the annual budget is a statement of faith that reveals what is most important to the congregation. So before determining a budget, financially vital congregations first seek to discern what activities God is already about in their communities that God would invite them to join. The role of the committee on finance is not to set the spending priorities of the church, but to facilitate this congregation-wide activity of discerning, planning, and budgeting for God's mission.

Best Practices: Financially vital congregations engage in practices that ensure their current financial health and long term sustainability. Among these are the ways in which these churches deal with risk, laws and regulations, restricted donations and non-cash gifts, related-party transactions, and apportionments.

As a leader within your congregation in the area of finance, your work is to understand these drivers of financial vitality, to determine your goals for the year in each area, to develop strategies to meet the goals, and to establish measures that evaluate if each goal has been met. (In Part Two, we will take a deeper look at each of the characteristics of financially vital congregations with more information on measures and evaluation.)

Understanding the Theological Foundations

In many local churches, money talk is taboo. Churches are dependent upon the offerings of members and constituents. Yet, many people do not like to hear too much money talk in church. This stands in stark contrast to the Bible where money talk is both frequent and pointed. The Bible portrays money as a powerful force in life and ultimately, a contender against God for a person's primary loyalty.

The Bible discusses money within three basic categories. First, money is a blessing from God. Throughout the Old Testament, Israel is promised material blessing as it faithfully follows God. Still, the blessing is never an end in itself, but is meant to reveal the power of the true God. Furthermore, God's people are always blessed in order to be a blessing to others. This leads to the second important way that money is discussed; those who have been blessed by God are expected to care for those who are in need. Giving is not an option for God's people, but is foundational to the lives of disciples. Both Testaments speak frequently of giving in order to support God's mission. "Each of you must give as you have made up your mind, not reluctantly or under compulsion, for God loves a cheerful giver" (2 Corinthians 9:7). Finally, money is understood as a potential idol and a force of disruption against a person's ability to love God and neighbor. The most famous text for this aspect of money's identity is Matthew 6:24: "No one can serve two masters; for a slave will either hate the one and love the other, or be devoted to the one and despise the other. You cannot serve God and wealth."

Beyond all its other roles, the committee on finance serves at a primary place of Christian discipleship by asking the key questions of church members: "Whom do you serve?" "Does Christ or mammon rule your life?" The finance committee can make a great difference in helping a congregation fully embrace the reality of Christ's lordship over money.

JOHN WESLEY AND MONEY

John Wesley, the primary founder of the Methodist movement, frequently spoke about money and its relationship to our lives as followers of Christ. Regarding money, his most famous words to the early Methodists were to gain, save, and give all that one can. Perhaps less famous were his concerns that many Methodists were quite content to follow two-thirds of his advice; that is, many were gaining and saving, but few were truly giving as much as they could. Some things change very little. One of the key roles for the committee on finance is to encourage contemporary United Methodists to continue to take John Wesley's complete message to heart. This can be done through verbal witness, but it is most effectively accomplished through the adoption of sound financial practices, which will be described below.

STEWARDSHIP AS DISCIPLESHIP

Finally, building on the witness of Scripture and the United Methodist tradition, the committee on finance can help members of the congregation embrace the life of stewardship. The way in which the committee addresses money is crucial here. The Christian faith consistently lifts up the image of a steward regarding financial matters. Ultimately for Christians, all that we have is a gift from God. Therefore, no Christian has complete control over his or her money or possessions. For this reason, the finance committee can help United Methodists better understand money's power and thus be more open to growing in Christ's grace. Vital and effective financial leaders do not primarily understand themselves as the "business end" of the church. Instead, the committee on finance can play a key role in encouraging Christians to fully embrace their vocation as stewards of God's many blessings. (See also the Stewardship Guideline.)

Committee Members and Basic Responsibilities

In The Book of Discipline of The United Methodist Church, (¶258.4) the committee on finance is charged with all of the following activities:

• overseeing stewardship

• compiling a budget annually

• raising sufficient income to meet the budget

• administering funds received by the church

• counting and depositing the offering

• disbursing funds

• establishing internal control policies

• annually reviewing and reporting on the adequacy and effectiveness of internal controls

• providing for an annual audit of the church financial statements

• reporting to the annual charge conference on the audit

• recommending proper depositories for church funds

• using contributions in accordance with donors' intent

• annually reporting to the church council all designated funds that are separate from the church budget

Lots of responsibility to take on, isn't it? The good news is that you are part of a team! At its best, the team functions in such a way that the whole becomes greater than the sum of the parts. The directions, membership, and responsibilities of the committee on finance are included in the Discipline, (¶258.4).

The Discipline provides for the committee on finance to be made up of persons who, by virtue of other leadership responsibilities, link the committee to other areas of congregational life, and others who are nominated in recognition of their commitment and witness of personal stewardship. The Discipline calls for the following members of the committee:

• chairperson

• pastor(s)

• lay member of the annual conference (one)

• chairperson of the church council or board

• chairperson or representative of staff/pastor-parish relations committee

• representative of the trustees (selected by the trustees)

• chairperson of the ministry group on stewardship

• lay leader

• financial secretary

• treasurer

• church business administrator

• others as determined by the charge conference

If any of these persons are paid (other than the pastor), such as the financial secretary or business administrator, they serve without vote. As a member of the committee on finance, you serve in a fiduciary capacity and as such, must always strive to act in the best interest of the congregation, rather than in any personal interest in which you might profit. The congregation has placed its confidence and trust in you to make decisions for them regarding the use of money they have contributed to the church. This is a position that requires the highest standard of care and complete loyalty to the interests of the church.

How Should We Start?

Begin by reading this Guideline to familiarize yourself with the characteristics of financially vital congregations, the specific responsibilities of your position, and the importance of setting goals and measuring how well those goals have been met. Ideally, each member of the committee should read this Guideline; at a minimum the chairperson of the committee on finance, the treasurer, the financial secretary, and the pastor should become familiar with the material. If your district offers a training event at the beginning of the year, encourage all committee members to attend.

If you are newly elected to the position of treasurer, financial secretary, or chair of finance, meet with the person who held your position previously. Your predecessor will have financial records, reports, meeting minutes, important documents, and plenty of good advice to offer that will be helpful in establishing a starting place for your work. You should meet as soon as possible after your election at charge conference, and prior to the first meeting of the committee on finance.

The chair of the committee on finance should contact committee members and set up a time for the initial meeting. Unless addressed in other ways, it is wise to invite the previous treasurer, financial secretary, and/or chairperson to this transitional meeting.

At the first meeting, pray and begin to reflect together about the goals that you hope to accomplish through the finance activities within your congregation during the coming year. How might your committee nurture the financial vitality of the congregation to enable it to accomplish its vision for ministry? Which characteristics of financially vital congregations still need work and will be priority areas within your church? Since this discussion will take more time than you will have at your first meeting, you will need to schedule a special meeting to fully address these questions (see below). Also at the first meeting, be sure to address the following matters:

• Evaluate and update your policies related to internal controls, check- signing, bill-paying, securing and counting the offering, expense reimbursements, gift acceptance, the pastor's discretionary fund, and any benevolence fund your congregation might have, as described in this Guideline.

• Designate or reaffirm the designation of certain individuals to sign checks, authorize and approve cash disbursements, reconcile bank accounts, count and deposit the offering, and investigate any discrepancies identified by donors between giving statements and their records. As described in detail in this Guideline, care must be taken to separate these duties to prevent internal control weaknesses.

• Make provision for conducting the annual audit (if it is not already done). You will need to discuss arrangements at your first meeting (see Part Two for helpful information about the audit). Verify that all year-end tax filing requirements will be met on time and that the annual giving statements will be distributed to donors as soon as possible after year end (as detailed in the Appendix).

• Deal with the ongoing business of the church, such as reviewing the prior month's income and expenses and determining the current and projected cash situation of the church.

Conduct a special meeting to further consider your goals for nurturing financial vitality within your congregation during the coming year. If your church is facilitating a congregation-wide day for goal-setting, your meeting can take place at that time. Once goals have been set, the committee can develop strategies to meet the goals, and then establish measures to quantify and qualify how well those goals have been met and how fruitful the specific activities have been in accomplishing the vision and mission of the church. (See the section entitled Measures starting on page 26.)

Determine how often to meet. Your committee should meet often enough to accomplish the responsibilities placed under your care. For many congregations this will mean monthly, while the committees of other churches can meet bi- monthly. At a minimum, you should plan to meet once a quarter.

During each meeting, begin with prayer, thanking God for abundantly blessing and providing for the needs of the congregation and asking for God's guidance in the matters before the committee. In addition

• Review the prior month's income and expenses as reported by the treasurer.

• Determine the adequacy of cash to meet spending needs for the coming months.

• Discuss the status of giving to the church as reported by the financial secretary.

• Be sure that monthly remittances of benevolent and administrative funds have been made to the conference treasurer.

• Evaluate your progress on achieving your goals by examining the results of your measures.

At the April, July, October, and January meetings check that:

• Quarterly payroll-related tax returns have been prepared and filed by the treasurer.

• Quarterly giving statements have been prepared and mailed by the financial secretary.

Throughout the year, be sure to remember to address the following matters; some of these may be ongoing issues that will need continual attention:

• A strong system of internal control is mandated by the Discipline and financial transparency is a key characteristic of financially vital congregations. Throughout the year, your committee may need to assess your financial transparency and the effectiveness of your current controls. Are there areas in which your church is not transparent? Can steps be taken and processes changed that would serve to strengthen and improve internal controls? See the section on Financial Transparency in Part Two for suggestions about internal controls.

• The committee on finance has the duty of compiling the annual budget and raising sufficient income to meet the budget. If your church has a ministry area dedicated to stewardship, begin working with that group early in the year to insure that plans are on track to implement a successful stewardship campaign. If this task falls to the finance committee, consider creating a subcommittee to handle this important undertaking. Do not wait until fall to begin the planning for your annual giving campaign. See the section on Missional Budgeting and Fundraising in Part Two for some helpful suggestions on how to tackle this task.

At the end of the year:

• Review the annual reports prepared by the treasurer for accuracy and adequate transparency. Provide these reports to the church council. Be sure to include a report on activity in all designated funds.

• Make arrangements for the annual audit. Remember that the audit must cover the financial reports, all organizations and accounts of the church, and the internal controls of the church. Refer to the section on Financial Transparency in Part Two for more information.

• Finalize the annual budget and submit it to the church council for approval.