In the Beginning...
About a year ago, a pastor from a new church start-up came to me and discussed having me come in and provide some practical coaching for couples. During our connect, we got on the subject of start-ups and I was asked what advice would I give a new Pastor if they wanted to experience growth, especially from the business side of things. I shared some key strategies, which resonated with the flow of conversation. A year later, I’m happy to say that the church is thriving and from the aspect which we had discussed, they are doing really well. While several things played a role in their success, I had them focus on one foundational element first: the financial health of the ministry. Because guess what? It costs money to run a church effectively—it always has, and always will. It is not something people would readily say out loud but your church has a business (not for profit in most cases) component built into it that is fueled by the members and giving.
Beyond just the spiritual leadership, managing a church well means knowing how to steward its financial responsibilities. It includes everything from maintaining facilities to funding outreach and compensating staff. And without a strong financial base, even the most vibrant ministry can struggle. In fact, according to Lifeway Research, about 4,500 Protestant churches closed in the U.S. in 2019 due to a combination of declining membership and finances, a trend many churches face as financial pressures mount.
So if you’re building or growing a church, here are some practical strategies that can help. These focus on establishing a strong financial foundation while keeping your ministry effective and impactful.
1. Financial Literacy: Empowering Your Congregation
One big obstacle to consistent giving? A lack of financial literacy. People want to support the church, but they may be struggling with their own financial situations. According to the National Financial Educators Council, financial illiteracy cost Americans over $415 billion in 2020. If members don’t feel in control of their finances, giving can feel impossible. So what’s the solution?
Action Steps:
Offer Financial Workshops: Equip members with skills in budgeting, managing debt, and saving. When people feel financially secure, they are more likely to give with confidence.
Lead by Example: Show that the church itself manages finances responsibly and transparently, building trust with the congregation.
Frame Finances as Faith: Help members understand that financial stewardship is a part of their spiritual life, making giving and budgeting feel like a natural part of their faith journey.
Tip: Partner with local financial advisors or use experts on this topic to offer accessible, faith-based financial education.
2. Tithing: Simplifying and Encouraging Generosity
For many churches, consistent tithing is essential to maintain financial health. But let’s face it—regular giving can be challenging for people. Studies show that fewer than 5% of adults tithe and only about 25% give consistently. Here’s how you can make giving more accessible and meaningful:
Action Steps:
Communicate Impact Clearly: Go beyond the spiritual message and show members exactly how their tithes are supporting the church’s mission and daily operations.
Make Giving Easy: Digital giving platforms make the process convenient and secure, which can encourage consistent support.
Keep Finances Transparent: Sharing financial updates helps build trust, showing members that their contributions are making a tangible difference.
Tip: Consider quarterly financial reports that highlight how contributions have been used and outline future needs. When people see the impact, they’re more likely to continue supporting the church.
3. Budgeting: Aligning Resources with Mission
Budgeting is essential, both for members personally and for the church itself. A well-planned budget helps ensure resources are being used effectively and aligned with your mission. Churches without clear financial planning can struggle to stay afloat, even with a loyal congregation.
Action Steps:
Teach Members to Budget: Offering budgeting workshops can help members better manage their own finances, which in turn helps them feel more confident in their ability to give.
Develop a Transparent Church Budget: Set an annual budget that reflects the church’s goals and needs, and share it with the congregation. Transparency builds trust and helps people feel more connected to the mission.
Involve Members in Financial Planning: Giving members insight into financial decisions fosters a sense of shared responsibility and commitment.
Tip: Host an annual "Budgeting Day" to discuss the church’s financial goals and priorities with the congregation, creating an open dialogue and shared commitment to the church’s financial health.
4. Crafting a Clear Mission Statement with Measurable Goals
A mission statement is more than just words; it’s the guiding force behind everything the church does. Without a clear mission that’s aligned with specific goals, a church’s efforts can feel scattered and unfocused. Research has shown that churches with clearly defined, measurable goals tend to have stronger growth and member engagement.
Action Steps:
Review Your Mission Regularly: Ensure that the mission resonates with both your congregation and the local community. If it no longer aligns, it might be time to revise.
Set Specific, Measurable Goals: Define concrete objectives that support your mission. This could include increasing community outreach, boosting attendance, or expanding programs.
Celebrate Milestones with Members: Sharing progress on mission goals helps keep members engaged and motivated, reinforcing a shared sense of purpose.
Tip: Implement a quarterly “mission scorecard” to communicate your church’s progress on key goals, helping members stay informed and connected to the church’s vision.
5. Creating an LLC for For-Profit Ventures
Many churches rely solely on tithes and donations, which can be unpredictable. One way to diversify income and lessen the burden on members is to create a for-profit venture under an LLC (Limited Liability Company). This provides an additional revenue stream to support church activities while allowing the church to focus on its mission.
Action Steps:
Choose a Complementary Business: Look for a business that aligns with your church’s values and mission—think along the lines of a daycare, community center, coffee shop, or bookstore.
Ensure Legal Compliance: It’s crucial to keep the church’s nonprofit activities separate from the LLC’s for-profit business. This distinction maintains compliance with tax regulations.
Reinvest Earnings: Use profits from the LLC to support church programs, outreach, or facility needs, relieving some of the financial pressure on the congregation.
Tip: Consult a legal or financial advisor to establish a compliant and sustainable LLC structure that serves the church’s long-term goals.
Bonus: Simplifying Church Organization and Maximizing Time
Many churches find themselves stretched thin with numerous auxiliary groups, committees, and gatherings. This can lead to burnout and a lack of focus, both for leadership and members. Research by the Lilly Endowment shows that churches with streamlined operations tend to have higher engagement and effectiveness.
Action Steps:
Reduce the Number of Auxiliary Groups: Simplifying organizational structures can make it easier for leaders to focus on core missions while reducing burnout among members.
Make Gatherings Purposeful: Make sure every meeting or gathering has a clear goal and respects people’s time. Engaged members are often those who feel their time is valued.
Tip: Conduct an annual review of all ministries and groups. If certain activities are no longer impactful, consider redirecting resources to higher-priority areas.
Coach's Conclusion
Building a thriving church means embracing both spiritual and financial stewardship. By focusing on practical strategies like financial literacy, accessible tithing, clear budgeting, mission-driven goals, and innovative revenue streams, you can set your church on a path to sustainable growth and community impact. Leadership isn’t just about the spiritual side—it’s about ensuring the church has a solid foundation that supports its mission fully.
These strategies have helped many churches, including the start-up I worked with last year, to build strong financial health and grow their ministries. With a thoughtful approach, your church can achieve the same success and thrive in both spiritual and practical dimensions.
Be well!
I Am Coach Kenn! info@iamcoachkenn.com
p: 531-331-2399
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