5 Ideas for Being a More Transparent Church
By Ken Sloane
In October of 2015, I had the privilege of preaching and leading training with United Methodist Churches in Alaska. Rev. Carlo Rapanut, Conference Superintendent and Assistant to the Bishop, took me to visit The United Methodist Church of Chugiak. It was built on a high elevation and included this wonderful sanctuary wall that was all glass. It gave worshipers a view of the beauty of God’s creation in Alaska. It was absolutely breathtaking!
As lovely as that was, it is not exactly the kind of transparency I’d like to talk about today. Financial transparency—the kind that builds trust and confidence in your donors—is where I’d like to let some light shine!
1. COMMIT TO REGULAR FINANCIAL REPORTS
I can’t tell you the number of times I have heard local church folks say, “We can’t seem to get regular reports from our finance people.” If those words have ever been uttered in your congregation (or maybe you’ve said them yourself), this needs to change! Not getting regular financial reports will certainly hamper the growth of generosity in your people, and it will hurt you financially. As trust erodes, not only will weekly giving be affected, but the possibility of extra, larger gifts will also disappear.
I have learned that the three most important factors for donors deciding to give to a charitable organization are:
- Belief in the mission
- Faith in and respect for the leader (CEO in a nonprofit or the pastor in the local church)
- Transparency in finances.
Where church leaders are not receiving regular reports on church finances, transparency is in serious jeopardy. However, in most of our churches, treasurers and financial secretaries are volunteer positions that are managed in personal time, so some consideration should be given to the expectation around financial reports. Is your finance committee, council, or board meeting scheduled late enough in the month to allow people to prepare a timely report?
Finally, regular reporting does not have to be complex – in fact, simplicity and clarity are recommended when trying to increase transparency in your church. Some sample reports can be found here:
2. CONDUCT AN ANNUAL AUDIT WITH RECOMMENDATIONS
An annual audit is a requirement (not a suggestion) of the Book of Discipline for every local church, so even including this suggestion here may seem redundant. Falling out of the practice of doing an annual audit—for whatever reason—makes it harder for churches to get back into the rhythm of this annual commitment to transparency in finances.
Churches with income under $500,000 can do an annual audit with volunteers. Our General Council on Finance and Administration (GCFA) has prepared an easy-to-follow resource to guide churches through the process, which can be downloaded here. A recorded webinar is available as well to help you get started and use the guide. You can find all those audit resources here.
More than just reviewing balances and transactions, a good local church audit should also review practices and policies in place—and where appropriate, offer recommendations to improve effectiveness and security. Encouraging your audit team to make recommendations may open the door to more transparent finances and improved stewardship!
3. REPORT GIVING IN AN HONEST, REALISTIC WAY
There was a time when many churches communicated with their congregations about finances via this box in the weekly bulletin:
I’m convinced that this is not a good practice for churches, for several reasons. It communicates to anyone who walks into your church for the first time that your church is in desperate trouble. Second, it promotes a scarcity mentality—a “we don’t have enough” view that works against any hope of growing mission and ministry. Finally, it works against transparency, as it is usually based on the misleading assumption that income and expenses are the same week to week. Since most churches will receive a large portion of their income in the last six weeks of the year, the church in this example may not be in nearly as much trouble as the example implies. Those in the pew will realize this is not an accurate indicator and may lose trust in the reporting, so transparency suffers.
If weekly reporting in the worship bulletin is needed to keep members informed, a better set of figures to show would be a comparison of income and expenses or “last Sunday” and “same Sunday last year.” For pandemic times like these, there might also be a reason to include a comparison to numbers in 2019—before the pandemic.
4. USE QUARTERLY GIVING STATEMENTS TO DO 'THANKS & TELL!'
Transparency and accountability are given a boost when giving statements are sent to members and other donors at least quarterly. Many leaders admit that the church still provides a statement of total giving only early in the new year. One significant downside to that practice is the loss of income; those who have missed or fallen behind can’t correct or catch up in their giving when the previous year has already closed. From a transparency point of view, donors should have the opportunity to see what the church is recording for their giving and compare it with their own records and expectations.
Quarterly (or even monthly) giving reports also provide the church with an opportunity to not only acknowledge the amounts members give but also report how those gifts are being used. Briefly sharing a story of impact or a place where the church has been able to offer transformative ministry for members of the community is a significant step toward becoming more transparent with your donor base.
Finally, giving reports should always include a thank you—ideally, more than one!
5. BE PREPARED FOR QUESTIONS ABOUT HOW DONORS’ MONEY IS BEING USED
Churches that value transparency welcome questions. Budgets, financial reports, and audits should be available upon request. Questions about bequests and endowments your church has received most often come from people considering giving to the church in that manner.
Who is the person most likely to be at the church or picking up the phone or responding to emails that are sent to the church? Whoever it is—the pastor, the church secretary or office administrator, or someone else—should be equipped to answer questions about church finances. That person(s) should also have a list of others, available in one phone call or email, for questions he or she is not able to answer.
A good communications strategy that promotes transparency is to work to anticipate the questions that might be asked and find proactive ways to get those answers to your people. Using newsletters, the church website, or Sunday bulletins, you can communicate good information and, at the same time, make the statement, “This is a church that doesn’t keep secrets from its members!”
Be a transparent church. Let the light shine in!
Ken Sloane is the Director of Stewardship & Generosity for Discipleship Ministries of The United Methodist Church.