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Posted by: Charles P Myrick CPA Posted on: May 22 2018 Posted in: church gifts and pledges, church management

The Challenge for Churches: A Consistent Cash Flow

As far as nonprofits go, a church is one of the most complex organizations for leadership. Church leaders have to balance the spiritual needs of their congregations with the programmatic needs of the communities their churches serve. Meeting these needs requires resources, both human and financial. When your church income relies on the weekly donations of your congregation, it can be a little tricky to ensure that you have consistent cash flow.

Here are some options that can help develop a consistent cash flow:

Recurring Donations

If you have the capability to automate your donations, now is the time! Even the smallest contribution on a consistent basis makes a huge difference in cash flow. If you need help encouraging your congregation to sign up for an automated donation system, consider trying to find a donor to create a matching gift. An incentive to match a threshold in donations may encourage hesitant parishioners to sign up.

“Adopt” Programs

Another option for creating consistent income is to encourage members of your church to "adopt" a church program. In cases like this, you can be upfront with church members about the cost to offer specific activities and ask for pledges over the course of the year to fund that program. For example, if you have an annual expense of $15,000 to maintain a soup kitchen, tell your church! Let them know that you need these funds to continue to provide this service to your community.

Restricting donations to that line item in your budget will provide church members with a sense of accomplishment. So, it is essential to collaborate with your financial professional to submit detailed reports to donors that assure them their money is going to the program they have chosen to support.

Quarterly Fundraisers

If constant appeals for money are hard on your church community, consider events or fundraisers that give donors something for their contributions. Church festivals, monthly breakfasts, dance nights, or youth activities can all bring in some revenue. Aiming for a unique fundraiser per quarter will help to even out cash flow and inject some income into your church finances on a regular basis.

Other considerations for quarterly fundraisers are "experiences." You might ask for donations for dinner with the pastor or ministers. The face-to-face contact can help to build a relationship that makes churchgoers more likely to support the church financially.

Naming Rights

As part of your quarterly fundraising efforts, you can give naming rights to various aspects of your church. Pews can be named in honor of a donor or someone chosen by a donor. Bricks with inscriptions can be laid in front of a church. Naming rights can also be impermanent. For example, you can offer naming rights (or advertising) in your church bulletin.

Cash flow can be one of the trickiest parts of managing any organization, but a financial professional can help you to determine the times of greatest need for your church. With a forecast of difficult times, you will be better able to stave off a financial crisis. And a financial forecast gives your church board the opportunity to collaborate and think of creative ways to develop a more constant income stream.

Download Your Copy of The Church Guide to Cash Flow Management

Charles P. Myrick is a Washington, DC accounting firm offering specialized CFO services to churches and religious institutions. Myrick CPA was voted Best Accounting Firm in DC, 2016 and 2017, Washington City Paper Readers' Poll. Request a confidential consultation, today.