Lainie Petersen Last Modified Date: September 14, 2020

Good church financial management typically involves the development of sound financial processes and procedures, hiring or appointing someone who is skilled at money management to oversee church funds, and adhering to denominational and congregational policies regarding financial transparency. In addition, churches should work to develop financial strategies that encourage church members to responsibly donate money to the congregation. In most cases, it is not a good idea for a church to leave finances in the hands of the pastor, as this can result in tensions and accusations of conflict of interest. In many cases, bonding church financial officers can be a way to protect the church against financial mismanagement.

A church business administrator should oversee the financial management of the church.

Religious congregations may have different structures, which can greatly affect church financial management policies. In general, however, a financially healthy church will incorporate both transparency and accountability in its policies. Practically speaking, this means not entrusting clergy with church financial management, but instead appointing a financial committee and perhaps a church treasurer who is accountable to this committee. Some churches may also hire an outside accountant to reconcile the church's books each year. Large denominations may have their own church financial management policies and may provide various financial management tools to individual congregations to help prevent financial difficulties and possible scandal.

Small churches may have different financial management needs than large churches.

Churches are often responsible for coordinating ongoing fundraising activities. These activities may include urging congregants to pledge certain amounts of support to the church every year. Ongoing fundraising may also be a way for a church to maintain a positive cash flow. It is typically a good idea for individual church committees and groups, such as women's clubs and youth ministries, to participate in the church's policy of full financial disclosure in all of their financial dealings.

Some churches work with financial management advisors who can help the institution make better financial decisions.

It is typically wise for a church to select trusted members to serve on a financial committee that is accountable to both the church's governing board as well as the church's parent denomination, assuming that the church has a parent denomination. Members of this committee should ideally be familiar with financial, accounting, and business matters. This does not preclude, however hiring outside assistance with finances or using third-party services to regularly review the church's books to prevent accounting errors. Some denominations may require a church treasurer or the staff member in charge of handling money or overseeing church financial management to be bonded against financial fraud or theft of church funds. Even without this requirement, bonding church financial officers may still be a sound practice, particularly in churches that collect large amounts of money during the year.