Poor Fiscal Management = Poor Giving

Oct 22, 10 • NewsNo Comments

Let every priest receive the money from one of the treasurers, and let it be used to repair whatever damage is found in the temple."  But by the twenty-third year of King Joash the priests still had not repaired the temple. (2 Kings 12:4-6)


            Joash decided to restore the temple.  He instructed the priests and Levites to go out from Jerusalem to the people and collect funds for the work.  But the priests were not successful.  For whatever reason, the work was not even begun.  Commentators have given many reasons for this failure:

  • Perhaps it was simply that the priests were lazy. 
  • Or maybe it was due to poor training; the priests were trained in religious observance, not fundraising. 
  • Others have ventured that the priests were reluctant to go out to the people because they connected this act with taking a census, something that got King David in a lot of trouble.


But, one explanation that strikes home to me has an application to pastoral leadership and fiscal health of the church.  Joash had been preceded by a thoroughly corrupt regime.  The people had witnessed gross waste on the part of both the government and the priests.  Perhaps the people held back when asked for money because they could not trust that it would be used wisely.  Poor stewardship led to the reluctance of the people to give any more money.

            This happens frequently in the contemporary church.  Lack of guidance, lack of attention to detail and other types of church mismanagement have wide-ranging consequences. 

  • At best, the church can expect sloppy record keeping, confusion, the inability to make timely and sound decisions, unattained budgets, and an uninformed congregation.  (When an uninformed congregation suddenly becomes “informed”, it can be very dangerous to the career of the aspiring pastor!) 
  • Poor fiscal management can also result in overspending, inappropriate spending, non-compliance with tax laws and abuse at the hands of an embezzler who has spotted a ripe opportunity. 

KEY: It only takes one or two of these situations to cause a congregation to lose faith in their leadership, and when this happens, giving is often impaired:

  • Because church members feel they can no longer trust their leaders they may hold back on their giving or try to direct their gifts to their favorite budget areas. 
  • Others may resort to excessive “designated giving” to support projects they care about.
  • Ultimately, some may simply leave the church. 


The first reaction many have to this is that this behavior is unchristian and shouldn’t happen in a church environment.  And I can’t disagree with that.  Nevertheless, this is what frequently happens.  Most importantly, knowing this does not lessen the impact.  Any one of these changes in giving patterns can be devastating to a church by itself.  The best way to avoid this situation is to build and maintain trust throughout the church.  This is done by implementation of a strong system of stewardship and accountability.


Verne Hargrave is the Church and Ministry partner at PSK LLP and author of the book, Weeds in the Garden.


The Title "Poor Fiscal Management = Poor Giving"1

 [1] Excerpt from, Practical Aspects of Pastoral Theology. Christopher Cone Th.D Ph.D (Editor), Tyndale Seminary Press. http://www.tyndale.edu/


Pay Attention!

Oct 15, 10 • NewsNo Comments

The high places, however, were not removed; the people continued to offer sacrifices and burn incense there. (2 Kings 12:3)


            The writers of Kings and Chronicles usually followed a pattern of describing the character of each king.  The descriptions go one of two ways:


  • Bad kings were described as those who “walked in the ways of Jeroboam”.
  • Good kings were said to have done “what was right in the eyes of the LORD.”


The latter is the description of Joash.  But, for most of the kings, even the “good” ones, this character summary is followed with another significant phrase: “However, the ‘high places’ were not removed.”

            Joash was guilty of the same thing.  Joash was diligent in cleaning the temple.  Joash was also diligent in having the temple operating as it was intended.  As a result, through his leadership, the nation was cleaned up and began operating as it was intended.  This was something desperately needed due to the pollution the country suffered at the hands of the wicked Athaliah.  Unfortunately, Joash was not diligent in everything.  He failed to do anything about the “high places”.

            The high places were a consistent stumbling block to the Children of Israel.  These sites, at the crest of hills and mountains, were centers of pagan worship.  Some believe that during the reign of Joash these places were being used in some form of Jehovah worship.  Even so, this would be a mistake because Moses had clearly laid out how Yahweh was to be worshiped and it is doubtful that these places were part of God’s plan.  Joash was not paying attention to detail, and eventually this led to trouble.

            There is a much more ominous tone to these high places because they were usually associated with repulsive pagan rituals.  Even if the people were engaging in Jehovah worship, the original use of these places would be fresh in the minds of the people.  What Joash was doing by ignoring the details was giving Satan and his pagan rituals a toehold in the land.  This had disastrous results, as it wasn’t long before the people lapsed into apostasy.

            Obviously, a church is probably not going to fall into apostasy over poor financial practices but a financial illustration can easily be drawn from Joash’s experience.  Far too many ministers take an “I can’t be bothered with details!” approach to their church’s business affairs.  What they often say to their staff is that they are too busy or they need to spend time on “more spiritual” matters.  In other words, they can’t be bothered with financial details.  Occasionally, these are the last words of some pastors; at least at that church.

            KEY: Not paying attention to the church’s financial matters can bring about extremely negative results. 

  • First, it is an example of poor leadership. If the pastor doesn’t care, odds are the staff won’t care either, resulting in poor financial practices throughout the church.
  • Second, if a pastor is not paying attention, problems that at one point could have been easily solved can become insurmountable.  As the leader of the congregation, the pastor is often held responsible for the poor economic health of the church, even though he was not directly involved.  Actually, because he wasn’t directly involved may be the very reason pastors get into this type of difficulty. 

            What I am not suggesting is for the pastor to be the CFO of his church.  What is being recommended is that the pastor should simply pay attention to the financial health of the church.  Here are three suggestions of ways that a pastor can stay connected to and be aware of the financial “details” of his church.

  • First, repeating the first principle, have a financial mentor.
  • Second, with the help of the mentor, learn how to read and interpret the church’s financial statements. 
  • Third, be supportive of the administrative staff and remember that their job is not to inhibit the ministry but to protect it.




Verne Hargrave is the Church and Ministry partner at PSK LLP and author of the book, Weeds in the Garden.


The Title "Pay Attention!1

[1] Excerpt from, Practical Aspects of Pastoral Theology. Christopher Cone Th.D Ph.D (Editor), Tyndale Seminary Press.

Pennies From Heaven (Or at least from Washington)

Jun 7, 10 • NewsNo Comments

Gary Steele, with our affiliated company Payroll Partners, has alerted us to an interesting opportunity.  If your church or organization has hired new employees recently, you may be eligible for a tax refund!  At our church breakfast last Thursday Gary told us the following:

“If you aren’t aware the HIRE Act was signed into law by President Obama March 18, 2010. Most tax reductions laws are a credit to Income Tax and therefore do not apply to churches. This one, however, does apply to churches because it is actually a reduction in the 6.2% Employer matching OASDI payroll tax (commonly referred to as FICA).

To qualify, an employer only has to have any employee hired after 2/3/2010 who did not work more than 40 hours in the 60 days immediately prior to his or her hire date to sign a W-11 IRS form to certify that fact. If this is done, then the Employer 6.2% matching QASDI tax is not paid on that individual for the remainder of 2010.”

For more information you can access a PDF at http://www.payrollpartners.com/Portals/0/HIRE%20Act%20Information%20file.pdf that details the new law.

If you think this might apply to you I would recommend you contact Gary at:

Gary Steele

Payroll Partners
3001 Medlin Dr Suite 125
Arlington TX 76015-2370
817 226-8111
817 467-9994 fax

Best intentions + no action = Disaster!

Mar 18, 10 • NewsNo Comments

Flipping through a magazine, I came across this picture.


The intent was very clear except, the fence was no protection from a chainsaw.


Looking beyond the appearance of protection, one could see these once beautiful trees had been stripped of their branches and cut into two to three foot chunks, strewn in every direction, nothing pretty about it; once a picturesque display of natural beauty was now only a heap of kindling ready for the fireplace.


I was left wondering, “Is this what you call protection?” A fence and a sign were not enough to protect this forest area – they only offered the appearance of security. The intention to protect was meaningless when there was no action taken to follow through with security processes.


Too many churches invest valuable time and financial resources to develop sound policy and control manuals, only to render them worthless when they place them on the shelf and never use them.


Adequate protection does begin with evaluating the church as a whole and developing procedures and policies that are in alignment with the purpose and goals of the church. It is also necessary to evaluate and revise policies periodically and communicate to the church staff the importance of implementing any new revisions. This will offer security to the church and protection for its staff. 


Any church can put well meaning policies and procedures in place, but just like the fence and the sign, policies and procedures left unused or not updated, are nothing more than a security blanket.


ox⋅y⋅mo⋅ron – a figure of speech, by which a locution produces an incongruous, seemingly self-contradictory effect…

Feb 1, 10 • NewsNo Comments

This past week I received an interesting email.  A Christian bookseller was offering The Left Behind series; Collector’s Edition.  That got me to thinking. (Which at times can be a very dangerous concept!)  As a young boy I was thrown out of many Sunday School classes for asking questions like this:

Isn’t this an oxymoron?  I mean, if it is true (as the Left Behind Series teaches) that soon we will all be “raptured” out of this present world, why would we want to be collecting much of anything?  Oh well, just wondering…

Speaking of collecting, one thing I have noticed is that most churches are habitual collectors. At least when it comes to documents.  Often we are asked by our church clients how long they should keep documents.  When we press the question, we often learn that the church keeps virtually everything.  In fact, it is not uncommon to find a church with offering envelopes dating back more than ten years!  On the other hand, we often discover that the corporate minute books of the same church cannot be located or have not been updated in years! What this tells us is that many churches are confused about what documents are important and what are not.   

Document management is crucial.  Keeping items too long can provide information that can only do one thing; hurt the church.  Conversely, not keeping or failing to update permanent records can have the same effect.

Every church must make document retention a priority.  A starting point is the development of a comprehensive document retention and destruction policy.  If your church does not have one, may I recommend you start the process soon?

If you have any questions, please do not hesitate to contact me at verne@pskcpa.com.  Also, if your questions concern corporate documents (minutes, by-laws, etc.) you might want to contact our friends at the Church Law Group (www.churchlawgroup.com)

The Ultimate Cost of Church Embezzlement

Jan 19, 10 • News1 Comment

The severity of a fraud incident is usually measured in one way – How much money was lost?  When presenting fraud case studies to church groups I have noticed a common reaction: the larger the dollar loss, the louder the gasps from the audience.  While it cannot be denied that in some cases the economic impact of embezzlement can cripple, or in some cases, result in the death of a congregation, the dollar loss is often the least of the church’s problems.

In the church environment, the real cost of economic fraud has little to do with lost funds.  In fact, most churches can replace stolen money with insurance claims. (Or perhaps a great sermon series!)  The real cost of an incident comes in the aftermath, when the church body learns they have been betrayed.  Loss of trust can, and often does, outweigh the dollars lost to an embezzler.

One of my most unpleasant tasks has been to report embezzlement findings to a congregation.  It is not a great deal of fun to stand on a sanctuary platform, accompanied by attorneys and law enforcement officials, and explain what has happened.  The pain in the room is so thick you can cut it with a knife.  Emotions rage out of control: anger, grief, betrayal, despair and discouragement.  In the worst of cases some congregations cannot adequately address the situation and church members leave in droves.  Some churches don’t survive. 

But, even this may not be the ultimate cost of fraud.  Some people, letting discouragement get the better of them, not only leave the victimized church, but leave the faith altogether.  And seekers, those contemplating following Christ, may abandon their search because of the ugly scene.  This is a cost that cannot be calculated. 

 P.S. – Fraud prevention is a team sport and churches wishing to defend themselves against fraud should develop a fraud prevention team.  Competent accounting and legal counsel should be included on the team roster. If you would like PSK to be a member of your team, or if you simply have a question about any of this, feel free to contact me at verne@pskcpa.com.  As for legal counsel you might want to contact the Church Law Group. (www.churchlawgroup.com)

sanc-tu-ar-y; noun – a sacred or holy place; a place of refuge

Oct 16, 09 • NewsNo Comments

Last week, at the end of a long day in New York City doing all of the things tourists do, I plopped down on a bench at the last of our touristy destinations – The Top of the Rock.  The view, I hear, is just as good as that from the Empire State Building, without the two hour wait.

While perusing a map of the NYC skyline a woman sitting next to me at the other end of the bench asked, “Do you speak English?”  My response? “Being from Texas, not very well, but I’ll do my best to help you.”  This came after three days of receiving amusing looks from waiters and hotel clerks after opening my mouth.  The common refrain was “You’re not from New York are you?”  In the City I looked like everyone else but sounded totally different.

My pronounced Southwestern drawl was not the only difference I noticed between New York and North Texas, where I live.  You have to look very closely because they are hidden by the immense skyscrapers and the multitudes rushing past them, but churches are numerous in NYC.  Having acquired an interest in touring churches this past summer in Europe, I cannot resist venturing into older churches.  My wife and I did this several times in New York and I was struck by something about these churches that was far different from home.  Every church we visited, without exception, was open to the public.  Inside, among the beauty of these sacred places, individuals sat silently praying.

In contrast, many of the churches where I live are locked tight, accessible only after pushing an intercom button and obtaining clearance that you have “business” there.  And even after gaining admittance, the visitor is given access solely to the business office.  The place of sanctuary, a place to pray, a place of refuge has been closed off.

Oh, I know the reasons and they do make sense from a risk management perspective.  And I do believe that proper risk management is an important element of good stewardship.  But, perhaps we forget down here in the Bible Belt that the Church is (or should be) in the risk taking business.

My question: Is there not a way we can do both, manage risk while at the same time providing refuge to a world that is hurting?

Keep it Simple Stupid!

Jun 12, 09 • NewsNo Comments

I think it surprised everyone at the Advance09 Conference (@Advance09) to hear Mark Driscoll (@MarsHill) recommending that churches
should cut down, if not eliminate, all of their programming and para-church
involvement save for two.  The first is
what he calls the “Air War” which is the Sunday worship service and the second
is the “Ground War” or small groups.

Now, for most, this seems a bit drastic.  But it does beg the question when we have so
many irons in the fire, are we making the impact that we intended?  As we consult with churches all over the
nation, we find that many church administrators get caught in the crossfire of conflicting
schedules and tight budgets.  Then,
unwittingly, these faithful workers lose sight of the passion that originally
attracted them to their roles.  And just
as passion is contagious, so is apathy. 
So perhaps before we take on another heaping portion of responsibility
we should ask ourselves, have I been a good steward of what I already have…?

“It’s NOT the economy, stupid!”

May 18, 09 • NewsNo Comments

Sixteen years ago Bill Clinton rode into the White House on the strength of this slogan: “It’s the economy, stupid!”  What this meant to Clinton campaign workers was that if they focused on the “worsening” economy, the Presidency was theirs.  Because Americans can usually be counted on to vote their pocketbooks, the strategy worked perfectly.

It is not exactly breaking news, but in recent months many churches experiencing a significant decline in tithes and offerings are repeating the Clinton campaign mantra: “It’s the economy, stupid…”  (Most of them leave off the stupid part.)

While this is true in many cases, I recently read a book that indicates that a poor economy is not the only culprit behind declining giving. 

The premise of “Passing the Plate”, (Smith, Emerson, Snell; Oxford University Press) is that American Christians are rather stingy with their money.  The authors make their case with six facts uncovered during a survey taken of pastors and church members across the country:

1 – 20% of all Christians give NOTHING to their church.

2 – The vast majority of American Christians GIVE VERY LITTLE to their church

3 – A small minority of generous church members give most of the support churches receive.

4 – Higher income Christians give no more on a percentage basis than others.

5 – In spite of the increase in income over the 20th century, giving has declined

6 – The vast majority of funds received are spent on local communities and not those in need.

Without question the economic downturn has hurt churches.  But it appears that maybe we already had a problem before the bottom fell out.  What do you think?

Are you filing a 990?

Apr 21, 09 • NewsNo Comments

If not, should you be?  That is the question the IRS will spend a lot of time trying to answer in the next couple of years.  The IRS's overseer, the Treasury Inspector General for Tax Administration (TIGTA), recently audited the IRS.  The TIGTA said the IRS should take steps to identify tax-exempt organizations that are not filing the required returns.  Therefore, the IRS has been requested to take steps to address tax exempt non-filers. 

Who is required to file a form 990, 990-EZ, or 990-N?  As with anything that deals with the IRS, the question is who is not required to file?  Here is the answer from the IRS's website.  If you have any questions or need advice, please contact us for a discussion on your specific situation.

Click here to see the TIGTA's full report.

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