Wednesday, September 11, 2019

LESSON 30 – 7 Ways to Avoid a Financial Train Wreck

Welcome to Lessons From the Church Boardroom—The Blog, a 40-week journey through the new book, Lessons From the Church Boardroom: 40 Insights for Exceptional Governance, by Dan Busby and John Pearson. Each Wednesday, we'll feature a guest blogger’s favorite snippet from the week's topic. Bob Fry is our guest blogger this week for the fourth of four lessons in "Part 8: Boardroom Worst Practices.”

LESSON 30 OF 40 – 7 Ways to Avoid a Financial Train Wreck
Financial derailment of a church is usually a collective failure, but the finger almost always points back to the governing board.

THE BIG IDEA FROM THE BOOK: In Lesson 30, the authors describe a handful of financial management practices that collectively represent “good stewardship.” The various steps, such as having a reasonable operating budget and maintaining adequate cash reserves, will strike anyone who has ever run a business as obvious. It’s the fact that we need to be reminded of the basics in a church setting that is so striking.  A church cannot use its unique calling in its members’ lives as a reason to be less well run or less prudent than a so-called secular business. Where would be the witness in that?! 

I completely agree with everything that John and Dan have said and would only add one thought. The need for sound financial management in churches is driven in part by the willingness of church members to kibitz, attempt to micro-manage and, at times, criticize. We tend to deal with our churches as if management of the entity itself is the goal. In doing so, we think too highly of the organization and too little of the mission.

In the healthiest churches I’ve seen, the members are bound to one another and to their leadership by a clear understanding of a common vision. In that sense, they are all friends of the type C. S. Lewis describes in The Four Loves. That sense of a shared vision, of shared ministry, is tremendously powerful and, at times, has financial implications. One brief example will do.

We were members for a number of years of a very large church. One year, the church had a substantial year-end deficit. So the pastor sent out a short email to the members, telling them of the shortfall.  Susan and I were in church the following Sunday as the church celebrated receiving more than two and one-half times the shortfall—all in cash donations members hand-delivered to the church—just that week. The average donation was less than $100.

We were blessed to witness the spontaneous response of a congregation with a heart-felt understanding of their church’s ministry. John and Dan’s financial guidance is hugely important.  Their advice will find its best application in those churches whose members enthusiastically embrace a common vision. With that, amazing things are possible. 


BOB FRY is an investment advisor, writer, private equity investor, Bible study teacher and Senior Gift Advisor with the National Christian Foundation of California. He is also the author of Nonprofit Investment Policies: Practical Steps for Growing Charitable Funds, and Who’s Minding the Money? An Investment Guide for Nonprofit Board Members. Bob lives in the San Francisco bay area with his wife, Susan, where they are near their two daughters and their four grandchildren. (They love their son in Texas and may yet end up there—when he someday has children!) Unlike many men in their 60s, Bob has largely given up golf in favor of full-court pick-up basketball, where his younger fellow players often observe, “he sure runs hard for an old guy!”

• Ask each board member to describe what the church does well and why people attend.  
• Then have each board member ask their friends in the congregation that same question.
• Compare the answers and correct as needed!
• Visit the ECFA Knowledge Center and read and share the short chapter, Lesson 30, “7 Ways to Avoid a Financial Train Wreck.”
• Inspire your board members to enrich their governance competencies at the ECFA Excellence in Governance Forums (eight cities, Fall 2019).

On Sept. 18, 2019, watch for the commentary by Cathy Barrett on Lesson 31, “Watch Out for Boards Asleep at the Wheel. Golden opportunities are missed when a board’s eyes are wide shut.”


BULK ORDERS: Click here.  For more resources and to download the book's Table of Contents, visit the book's webpage.

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