19-The Administration of Finance
CHAPTER XIX THE ADMINISTRATION OF FINANCE, As an administrative officer the pastor must give faithful attention to church finance. This cannot be left entirely to the laymen. He will not be officious or dictatorial, nor will he assume entire responsibility for raising the budget. But he should know the exact financial condition of the church every month and be ready with helpful suggestions concerning a wise financial policy. If the money is to be used for spiritual ends, then money-raising is quite as religious as preaching!”*!
If American” cliches find difficulty in managing their finances generally, it is not because the members of the churches are poor. “Probably not more than two or threepercentof the churches secure all the funds they should in order to perform their duties,” says one expert in church finance. “According to the religious census of 1906, investments in church property in America are less than onepercentof the national wealth, and the annual income of American churches for buildings, equipment, salaries, and all other purposes equals scarcely onepercentof the national income/’ 1 Nor is it because they are unwilling. The United Presbyterian denomination is composed chiefly of small churches, many of them located in rural communities and the open country, but their average giving is $20:90permember, including the children. In Iowa they averaged over $30permember in 1914. We have a right to assume that they are not at heart more devoted than the members of other communions. The more common embarrassments in church finance are ~*McGarrah, Modern Church Finance, p. 27f. By permission of Fleming H. Revell Company.
210
FINANCE 2ii (i) delay In paying salaries and current bills, thus annoying the minister and other creditors; (2) the accumulation of deficits year after year until the total is overwhelming; (3) many separate appeals for money, in public and in private; (4) dependence upon socials and entertainments to raise funds that should be contributed outright by the church membership; (5) the expectation that a few persons in the church shall assume obligations that should be distributed throughout the whole body; (6) careless handling of funds, making possible great waste and loss through inaccurate bookkeeping, or failure to audit accounts annually; (7) inadequate budget through lack of vision and parsimony; (8) the major obligations, missionary and benevolent, of the church as a whole made impossible of attainment through the competitive solicitation of funds by minor organizations within the church; (9) complacency over past achievements and unwillingness to give up to the level of real ability; (10) the apologetic spirit in which money matters are approached before the congregation; (n) no single individual responsible for the purchase of supplies; (12) no financial secretary to receive moneys before they are handed over to the treasurer; (13) the diversion of funds contributed for one purpose but used for another. In the light of all this, success in church finance must imply: 2 (1) The honest and prompt payment of all bills and obli gations.
(2) Avoiding deficits and debts.
(3) Adopting budgets that are sufficiently ample to be truly economical.
(4) Securing funds by methods that are both Christian and business-like.
(5) Democracy in giving.
(6) Handling all moneys in business-like ways.
(7) And raising all that should be raised.
“Summarized from A. F, McGarrah, Modern Church Finance, pp.
11-18. By permission of Fleming H. Revell Company.
212 THE PASTORAL OFFICE i. THE COMMITTEE ON FINANCE. Responsibility for working out a sound financial policy rests upon the Finance Committee. The Discipline requires that this committee shall consist of from three to seven persons. It is customary to make the financial secretary and the treasurers members because they are better informed usually on financial conditions in the church than others. The pastor should meet with them frequently in an advisory capacity. The duties of the committee are stated very definitely: (i) Before the close of the fiscal year it shall “prepare an estimate of the current expenses and benevolences for the ensuing year. This estimate shall include the amount necessary for ministerial support, viz.: pastor’s salary and house rent, district superintendent, bishops, and Conference claimants; also the amount deemed necessary for current expenses, such as interest on indebtedness, heat and light, music, insurance, repairs and supplies, telephone, printing and postage, janitor, and miscellaneous items; also for benevolences as apportioned to each charge by the Committee on Conservation and Advance. (2) When approved by the official board or Quarterly Conference, immediate steps shall be taken by a personal canvass of the entire membership of the church and congregation to secure pledges to meet these expenses by weekly payments, so that the result may be known on the last Sunday of the fiscal year, and payment of these pledges begin on the first Sunday of the new fiscal year/’ 3 Moreover, the General Conference has prescribed a plan, in great detail, for raising these budgets, which has been approved by the experience of many denominational bodies over a period of many years. It is substantially the plan described at length in McGarrah’s Modern Church Finance, and any finance committee that will work this plan exactly as set forth in the Discipline* will be happy over the results. Time would fail one to tell of half the See Discipline (1920), If 112,’S 2.
Yd, tin.
FINANCE 213 churches which have been rejuvenated by this all but perfect device.
2. PREPARING THE BUDGETS. In preparing the budgets, the committee should not ask, “How little can we get along with this year?” but, “How much should we raise in order that the church may be able to do all its work creditably and effectively?” Moreover, the total budget should always be large enough to tax the church to something like its full capacity if spiritual results are to come from giving. A church composed of wealthy people should probably average from $50 to $100permember, including children. A church of modest means should average from $20 to $40 for all purposes. a. The Local Budget. The first item in the local budget will be pastoral support, which includes the claim not only for the pastor and his associate, if there be one, but also those for the support of the bishops, the district superintendent, and the Conference claimants. The obligation requires that all these claims be fully met. Any deficit must be shared proportionately by all. Every year, if possible to do so in justice to other demands, a church should increase the pastor’s salary. The largest salaries are only sufficient to permit a standard of living that is enjoyed by most of the people in the church. And many, many ministers receive less each year than carpenters and blacksmiths. The inferior preaching in some pulpits is due to the fact that the minister’s income does not permit of anything but the narrowest range of experience. He cannot enrich his mind by travel, or even by books, for he is unable to purchase them. The church that will take these things into account in estimating the salary will find itself abundantly rewarded in the increased effectiveness of its pastor. Moreover, the committee should ask itself if the pastor should not be relieved of a load of burdensome details in keeping church records and attending to other small matters that could be performed by a secretary or clerk. Is it wise economy to pay a pastor a good salary and then expect him 214 THE PASTORAL OFFICE to do work that another will do quite as well for eighteen or twenty dollarsperweek?
Fuel, light, repairs, music, supplies, printing, insurance, are other fixed charges that necessarily appear against the local budget. It is impossible for those responsible for the expense items to estimate some of these exactly, because prices change and consumption varies from year to year. But the average for a period of three or five years may be taken as a safe guide.
Interest charges on borrowed money must, of course, be provided for, and if there is a debt, the easiest way to pay it is to insert a substantial sum each year into the budget for its gradual reduction. To avoid a number of appeals later in the year from other committees and organizations for their special work, the Finance Committee would do well to ask from each a careful estimate of the amount needed to carry on its work.
Then an appropriation can be made for each organization, and the members of the church may be asked fairly to give to the church budget as much as they have been in the habit of giving for all purposes. This is particularly true of the Sunday school, whose expenses should be borne by the church and whose gifts should be made to the church budget rather than independently of it. And to guard the treasury, the Finance Committee should insist that a single individual shall be “purchasing agent” for all supplies bought in the name of the church, and his approval necessary to the payment of bills. In this way the control of expense and income may be unified, and also appeals for funds.
It will make for clear understanding if, in estimating the expense for the coming year, the actual expenditures for the current year and the year preceding be noted in parallel columns. In this way the subscribers can tell at a glance where the budget has expanded and contracted. A detailed estimate of receipts should accompany the estimate of expenditures. In establishing the limits of a fiscal year, it is usually FINANCE
215 better to select October i, January I, April I, or July I, than “Conference time,” which is a movable date.
After the budget has been prepared with great care, it should be submitted and explained to the official board for their adoption. The local budget for a church of 500 to 800 members will appear somewhat as follows: 5 BUDGET OF LOCAL EXPENSES METHODIST EPISCOPAL
CHURCH ESTIMATED EXPENDITURES For the Fiscal Year Beginning October z, Pastoral Support (Pastor,
1921
1922 Dist Sup. Bishops, Conf.
Q) $3, 390
$3, 390
Janitor
720
720 Janitor Supplies 50
60 Fuel and Light 620
620
Music 1, 200
1, 200
Insurance
75
75
Repairs 800
2, 000 Printing, Postage, etc 425
425
Telephone
60
60
Interest 900
750
Telephone
60
60
Sunday-school
900
900 Miscellaneous 300
300
1923
Increase*
Decrease
$3, 590
$200+
600 obo-f 720 SO icr
620
800
400
75
500
1, 500
425
60
750
2, 500
2, 500+
60
900
300 Total... $12, 000 $10, 500 $ii,95o $1, 390+ Estimated Receipts Expectation from unpaid, 1922, pledges $600
9>75<>
Pledges renewable at 10percentincrease Pledges from new members From Sunday-school for local Budget... 75<>
Total... $12, 100 ’See McGarrah, op. dt, for suggestions, 216 THE PASTORAL OFFICE The budget for a church of 250 to 300 members would probably be somewhat as follows, ESTIMATED EXPENDITURES For the Fiscal Year Beginning October r, 1923.
ZQ2I
1Q22
1923
Increase^
Decrease Pastoral Support.. $2, 360
$2, 470
$2, 583
$113+ Clerical Help IOO
150
50+
Janitor 300
300
300 Fuel and Light 250
250
250
Insurance
50
50
50
Music 100
IOO
IOO
Repairs 600
300
500
2OO+ Printing, postage, etc...
100
IOO
IOO
, Interest 350
300
250
50~ Reduction of Debt 1, 000
1, 000
1, 000
Sunday-school
400
400
450
50+ Miscellaneous 200
2OO
200 Total $5, 7io $5, 570 $5, 933 Needed to pay all bills $114:11 each week.
Estimated Receipts Weekly pledges from 5 members at $3:00perweek $15-00
$363+
10 IS
15 40 60 30
25
2.OO
I.OO
.75
-So -25
.20:10 From the Sunday-school for local expenses...
Expectation from unpaid pledges, 1922, average per week $104-75 5:00
5:00
Total $114-75 b. The Benevolent Budget is somewhat simpler, the items being received, for the most part, from the district superintendwt, It includes (i) the Apportioned Benevolences FINANCE 217 ordered by the Committee on Conservation and Advance for the support of the great boards of the General Church; (2) tke apportionments ordered by the Annual Conference for educational and philanthropic work within the Conference; (3) the benevolences ordered by the Official Board of the local church for the support of community enterprises, such as City Missions, Educational Institutions, Anti-Saloon League, Associated Charities, etc.
It will relieve the pastor of much embarrassment often if the official board will adopt a rule that no public appeal shall be made from the pulpit for funds without the consent of the board. * The items in this budget should be set forth in orderly fashion and added to the local budget. The total will be the amount which must be raised by the congregation during the year. Ideally the Benevolent Budget should equal the Local Budget. “As much for others as ourselves” At least half of the gift from the Sunday school should be credited to the Benevolent Budget.
3. THE FINANCIAL PLAN. There are six features in the financial plan recommended by the General Conference, and each is indispensable. (See Discipline.) a. Education. After the two budgets have been approved by the official board, a campaign of education covering a month should be instituted for the purpose of informing the membership accurately concerning them, the reasons for enlargements, and the plan adopted for raising the money. The methods usually employed in this educational work are, (1) Form Letters sent to all members setting forth essential facts briefly.* (2) Church Bulletins where such are printed.
(3) Full explanation from the pulpit.
(4) Special dinners and social gatherings.
(5) And instruction in Christian Stewardship and Systematic Giving throughout the year.
*See McGarrah, Modern Gfa&th Finace f for good sampk letters.
2i8 THE PASTORAL OFFICE After the plan has once been put into operation, the educational work will be less arduous in succeeding years. b. Every-M ember Canvass, (i) Canvassers are selected from among the most capable men and women in the church, and in sufficient numbers that no one will need to visit more than twenty persons, fewer, if possible. After careful training they make their own pledges then go two by two to every member of the church, securing a subscription from each, children as well as parents. It is an “every-member” not an “every-family” canvass.
(2) It is generally best to limit the canvass to a short period, preferably between certain hours on a given Sunday afternoon. The members of the church will expect the visitors and be prepared to make their pledges without much argument. Many congregations give a sacramental character to the canvass by commissioning the canvassers in a season of prayer at the altar of the church in the morning service preceding the canvass. Of course such persons as cannot be seen on the day set apart will be visited as soon thereafter as possible.
(3) In distributing the names of persons to be solicited it is generally well to permit the canvassers to select, as far as possible, those whom they can approach most easily. The remainder may be assigned arbitrarily. The name of each prospective giver should be placed upon a card containing the amount paid the preceding year and the amount that the committee feels may reasonably be expected on the new budget. This is given the canvasser for his information. It is not an apportionment merely a suggestion. c. Weekly Offering. The pledge is a weekly pledge to be divided between the Local and the Benevolent Budgets according to the wish of the giver. d. Envelope System. Each subscriber is provided with a set of fifty-two duplex envelopes which he is expected to use in paying his pledge week by week. These can be secured from The Methodist Book Concern FINANCE 219 e. Two Budgets and Two Treasurers. To avoid confusion and diversion of funds, the official board is asked to elect two treasurers, one for the Local and the other for the Benevolent Budget. Moreover, a financial secretary is to be chosen who shall receive all moneys, keeping an accurate account with each subscriber, then turning the moneys over to the respective treasurers, receiving their receipts therefor. Thus church funds are handled in a businesslike manner.” The treasurers shall pay out this money by check and only on the authority of the Finance Committee or the official board.
/. Monthly or Quarterly Remittance. The Apportioned Benevolences should be sent each month or each quarter to the Committee on Conservation and Advance. This will make it possible to reduce the interest charges of the several boards. Other benevolences should be sent directly to executive officers of the respective beneficiary organizations, or deposited with the Conference Treasurer, by the pastor, at the next session of the Annual Conference.
BOOKS RECOMMEUDEB FOE FURTHER STODY A. F. McGarrah, Modern Church Finance.
F. A. Agar, Modern Money Methods; Church Finance.
F. B. Fisher, The Way to Win, Chapter VIIL Discipline, Methodist Episcopal Church, 1920.