One Thing Your Church Must Always Afford
Most Churches in America are not a mega-church. Most of them operate from week to week, struggling to meet their budget and do some type of ministry. As a matter of fact, many have to resort to fund-raisers or excessive offerings, on a weekly or monthly basis simply to have income in which to do ministry.
With this type of stress on Pastors and Church Leaders, it is easy to see why Pastors have one to the highest burnout, depression, and suicide attempt rates of any occupation. With that said, there is one thing that every Church cannot take the chance on omitting from its budget.
What A Church May Consider A Luxury, May Be A Priority
Every Church, of which I have knowledge, begins the budget process with known necessities. Usually, this begins with the large expense items, i.e. mortgage/rent, utilities, Pastor/staff salaries, etc. From there, ministry areas are squeezed into the process. Unfortunately, one of the most vital expenses is often omitted because Church Leaders and Pastors feel this area can be properly handled by a paid or non-paid volunteer.
When volunteers or paid Church staff assumes responsibility for this area, studies have revealed that it may become very costly for the Church. These same studies indicated that up to ninety-eight percent of those performing this task are unqualified, or grossly under qualified.
Good management teaches us that a luxury becomes a priority when it can save money, or pay for itself in the grand scheme of things. When a Church is properly invested in this one area, it could save them thousands, and sometimes millions of dollars over the course of the Church’s existence.
The One Luxury that Should Really Be the Number One Priority
The area of which I am speaking is proper outsourcing of Church bookkeeping and financial records. This is the one area that is most over looked in Church budgets. Leaders and Pastors feel they can invest a couple of hundred dollars in a computer program, find someone in the Church who is somewhat computer savvy, and then turn this most vital area over to them. This is a huge mistake!
Most Church trouble has finances at its core. Money is embezzled from tithes and offerings, budgets are not properly managed, or shoddy record-keeping and IRS compliance may result in huge interest and penalties to the IRS or even imprisonment to some of the Leaders.
Why Outsourcing of Church Finances Must Be A Priority
A couple of years ago, I was speaking with a Pastor and the subject of Church record-keeping arose. I asked the Pastor if they were compliant with current IRS regulations, to which he replied, “Most definitely.” When I asked him how he could be so sure, his response was, “We have us a good, local Certified Public Accountant (CPA) that does our books and records.” The Pastor continued with this: “We thought about outsourcing to Chitwood & Chitwood, but you were too expensive. Our CPA is much cheaper.”
Needless to say, after the Pastor so adamantly assured me his House of Worship was in order, I dropped the subject. Within a few months that Pastor called, begging for assistance in fighting an IRS investigation into his ministry. It seems his cheap, local CPA, told him there were several forms and IRS regulations that did not apply to him because he was a ministry. His CPA did not specialize in Churches and non-profits and that lack of knowledge cost him dearly.
We were able to keep the Pastor out of prison, but his Church had to pay hundreds of thousands of dollars in IRS fees and penalties, attorney fees, and our bookkeeping fees in order to bring him into compliance. There have been many times since then that he has said that he wished he would have budgeted $250-$300 into his monthly budget. This one budgetary item would have saved him stress on him, his family, and more than one million dollars.
My assessment of his situation is simple: CHEAP ADVICE IS EXPENSIVE!
We Can Help
For more than 78 years Chitwood & Chitwood has been properly managing Church books and records. We are the oldest and the best in the nation.
Do not wait until the IRS shows up at your door to begin an audit. By then it may be too late. Time is of the essence.
Every Pastor and Church Leader should attend the nearest and soonest Church Management and Tax Conference. At these conferences we will bring you abreast of the latest IRS changes to Church and non-profit tax codes and you will be allowed to obtain our professional assistance at greatly discounted rates to make sure your House of Worship is in compliance.
Do not attend alone. Pastors should bring their Leaders. Church Leaders should insist that the Pastor accompany them. It is vital.
To register, visit us at https://cmtc1.org/conferences/, or call us at 800-344-0076. This may not be your next chance—this may be your last chance. Register and attend now!
