Hoge, Dean; Zech, Charles; McNamara, Patrick and Donahue, Michael J. Louisville, Money Matters: Personal Giving In American Churches. KY: Westminster John Knox Press, 1996. 248 pp
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The audience for this very specific book is church accountants and treasurers. It is not a text book or even what is typically thought of as a reference book. It is designed to guide the church accountant or treasurer through an assessment of how well that individual is meeting the church's needs and provide guidance for increased effectiveness. Regardless of this book's highly targeted audience, it is worthwhile reading by anyone who wishes to have a better understanding of the application of finance concepts to a specific type of not-for-profit environment. It should be considered for acquisition by faculty teaching not-for-profit finance courses and libraries in universities offering such courses. Of course, it should also be in every church library. Money Matters is an interdenominational study of factors that influence whether, and in what amounts, members make financial contributions to their churches. As the introduction states, the research was funded by the Lilly Endowment in order to assist church leaders in adjusting to a changing financial climate. 1
To this end, the book is intentionally aimed at an audience of lay and church leaders. Nevertheless, it provides a wealth of information that serves as an important benchmark for those interested in pursuing further theoretical and empirical research on the subject. The data were collected from five national denominations: the Assemblies of God the Southern Baptist Convention, the Roman Catholic Church, the Evangelical Lutheran Church in America, and the Presbyterian Church (U.S.A.).
The study employs a sophisticated, multilevel, and multi-method research design that inspires high confidence in its findings. The study also yields an enormous amount of data on how congregational and individual-level characteristics affect giving. The authors measure contributions by member, attender, and household. Most of the tables and figures highlight differences among the five denominations on these measures. Ranked in terms of annual contributions by member or household, those associated with the Assemblies of God come first, followed by the Presbyterians and the Baptists. Ordered according to annual contributions by the average attendee, the Presbyterians rank highest, followed by the Baptists and associates of the Assemblies of God. On all measures the Catholics are the lowest contributors.
Two major factors were found to be associated with giving across all five denominations: high family income and a high level of involvement within the
church. On the other hand, four factors commonly thought to be related to giving proved in this study to have little if any effect on it. The data suggest that congregation size is not crucial in its effect on the level of giving; that democratic governance procedures do not strongly contribute to the level of giving; that Catholic anger does not seem to be a significant factor in the lower levels of Catholic giving; and that, among Protestants,
national denominational actions and policies do not affect the level of giving by congregational members. These findings are especially important because they call into question the working assumptions of many church leaders.
For example, opponents of the ordination of women and of homosexuals have often claimed that progressive denominational policies would lead to a loss of revenue. These data suggest that this claim is untrue, at least at the congregational level. It may be the middle-level church leaders who are withholding funds from the national organization, not individual members. Similarly, while the study finds that Catholics complain more than the others about being excluded from important parish decisions, the data indicate that lay anger by itself cannot be used to explain why Catholic levels of giving are so low. The more important finding to emerge around the issue of leadership is that trust is the crucial association. Regardless of who holds power, when trust is missing, giving is correspondingly low. While this study, as it stands, is an important contribution to its field, we may hope that other researchers, taking the authors up on their generous offer to make their data available, will subject these data to more sustained and theoretically informed analyses. 2 It should also be noted that financial contributions are a limited way of looking at religious stewardship, both empirically and theologically.
Such contributions constitute only one kind of stewardship among the many that are specified within the Christian tradition. Research suggests that when definitions of giving are expanded to include contributions to friends and family in need as well as non-monetary giving, including volunteer work, the portrait of giving changes substantially. Moreover, as the authors acknowledge, there are important differences in the way the theology of stewardship is understood and expressed among the denominations they studied. Before these data spawn a raft of new empirical investigations into how the offerings at Sunday services can be increased, a serious investigation into the meaning of giving in its theological and cultural contexts needs to be undertaken.
The authors' writing style is given to frequent use of long and complex sentence structures which demands a high degree of concentration on the part of the reader. However, the frequent illustrations of his points by use of hypothetical conversations by members of such fictitious churches to keep the reading interesting and not over-bearing. The authors also makes effective use of exhibits and listings of information (ten reasons for budgeting, fifty internal control practices, questions to be asked in deciding whether to computerize the finance process, etc.). The tone of the book is set early when the authors identify the primary purpose of church reports as providing a basis for evaluating whether church resources were spent wisely, not just providing information on what the resources were spent.
While they acknowledge the difficulty in measuring the effectiveness of many church programs, they present a strong case for performing this function better than has been typical. A good discussion is presented on the applicability to churches of three types of budgeting: incremental, program and zero-base. The authors have done a sensitive job of dealing with the role of trust in church administration but he makes a strong case for the need of an adequate system of internal controls. Their lengthy presentation of fifty control procedures and methods of implementation is particularly helpful in dealing with a difficult area for churches. The discussion of finance systems deals with write-it-several-times and write-it-once manual systems as well as computerized systems.
Extensive lists of questions are provided as guidance to a church committee charged with converting from a manual to a computerized system. The final section to
this book deals with the form and content of financial reports. The authors strongly suggest different reports be prepared for different classes of users (for example, the church administrator in contrast to the typical church member).
The authors suggest that parish audits be conducted regularly, that finance boards abide by conflict-of interest guidelines, that their membership be publicly disclosed, and that church financial statements present an accurate picture of financial conditions. These, and other such commonsense recommendations, are already included in the U.S. Conference of Catholic Bishops' guidelines for financial stewardship. But they are guidelines, not rules, so dioceses typically implement the ones they like, disregard the ones they do not.
This book contains minimal amounts of detail on recording church transactions. This makes the book applicable to churches of all denominations and sizes. This may also be made up for in part by the availability from Harper & Row of annual update newsletters for this book. This book is a welcome addition to a subject area which has had too little attention.
Cashman, Robert. The Finances Of A Church. (New York: Harper and Brothers, 1949, pp 159)
There is little that can be found on the subject of finance for finances of a church. A few books of accounts for treasures are published by church presses. There is no national organization to help treasures. For the most part, therefore, a new treasurer of a church who inherits the usual check book has practically nothing o assist or guide him in his attempt to set up an finance system. 3 Each new treasurer, and for that matter, each and every treasurer, is his own, and usually without assistance from the finance literature.
This little book is an excellent non-technical introduction. It does not pretend to be exhaustive and seems primarily to have been written for pastors--or at least laymen who are not accountants. From an finance point of view, there are two chapters of considerable interest. Chapter IV-"preparing the budget' gives several suggested classifications of expenditures. The first has major classifications as follows:
· Operation and Maintenance
Under administration the author suggests the following:
· Salaries: Minister and associates, also retirement (annuity) payments.
· Traveling expense of minister and employed staff to denominational conferences and special meetings.
· Secretary, stenographer and other clerical help
· Treasurer or Financial Secretary
· Choir Director, Organist, Soloist.
· Pulpit supplies.
· Rental Allowances
Under operation and Maintenance, the author suggests such things as:
· Religious Education: Church School Supplies, etc.
· Campus or Conference Grounds and Programs (The usual items such as repairs, fuel, etc.)
I must prefer another one he suggests:
· For the preaching of the Gospel
— Minister’s Salary and Home
— Pulpit Assistant
· For the Ministry of Sacred Music
· For the Program of Christian Education
· For the Extension of God's work
— Church Bulletins
— Printing and Stationary
· For the care of God's House
— Janitor's Salary (sexton)
— Janitor's Supplies
— Light, Water and Telephone
· For the Upkeep of God's House
· For Contingencies
· For World Wide Program of Benevolence
In other words, function should be the basis for classification of expenditures.
Chapter X, "Church Accounting," is not sufficiently specific as might be hoped. It does define the various funds, suggesting four: current, capital, benevolence and endowment. Presumably the author would advocate a system of fund finance similar to that found in colleges and universities. I agree wholeheartedly. Fund finance principles enable the financial information needed to be reported much more clearly than do commercial enterprise principles. This is particularly true when deficits are incurred. The chapter on "The board of Trustees: is excellent and helpful. 4 There are thirteen more chapters covering many more aspects of interest to all who are concerned with the business administration of our churches.
Robert Cashman has been Business Manager of McCormick Theological Seminary for thirty years. He writes from experience--and well. This book should be on the desk of every church treasurer and be read by members of the Boards of Trustee of churches. It is easy reading, brief and well done. But there is still need for a book covering the technical aspects of finance for churches. It should be based on wide study of actual practice as well as experience. Such financial reports as have been gathered to date reveal a tremendous need for professional finance assistance. Example: A balance sheet for a church has not been found in any church report yet seen. Churches need finance help.
Since there is no proper system of checking the in-flow and out-flow of church finances a lot of mismanagement of funds given to the churches take place. The author believes that even in the best-managed dioceses, parishes are far from the green-eyeshade scrutiny of the chancery's number crunchers, assuming such oversight even exists. And the controls that do exist under canon law — each parish is to have its own finance council and each diocese a similar body — are hardly guarantees of good stewardship at either the local or diocesan level. Here are some of the other "secrets," known to those who track such events or participate in church governance:
• Bishops take gifts, sometimes very expensive gifts, from those who seek business from the church.
• Family members and friends of church officials can unduly benefit from their connections.
• The vast majority of U.S. Catholics have no idea how their $6 billion in annual donations are spent (or misspent) because diocesan and parish financial reporting, if it exists at all. is generally designed to obscure, to confuse, and not to enlighten.
Financial statements, in the case of private enterprise, are designed to give potential investors a sense of the risks and opportunities present in a business. In the case of nonprofits, like a church or diocese, these reports should give some comfort or raise red flags to those considering whether to donate. It's all about discloser’s — providing the potential investor or donor the information they need to make an informed decision. In the U.S. Catholic church, what we typically see instead are audited financials whose "scope" is limited to the cash that flows in and out of the central administrative offices, the chancery. 5 (And even here it's nearly impossible, based on how the numbers are categorized and reported, to figure out what is really going on.) Left off these reports are all the affiliated entities of the diocese, such as parishes, schools, hospitals, nursing homes, church-owned real estate outside the chancery, multimillion dollar cemetery trusts, and so on and on. In other words, financial reports that should provide a picture of the financial health of a diocese omit from scrutiny the vast majority of the church's assets and liabilities.
The also reminds the readers of a time in the church when the faithful would not have dreamed of asking for an accounting. Such a request would have suggested mistrust of the leader of the community, the priest believed to be ontologically different from the rest, operating in the place of Christ and beyond rebuke. The reality, we have come to know in recent decades, is something far more pedestrian and human. We are all in this together, all subject to the same temptations and frailty. Transparency is essential to the health of the community. Absent public scandal, however, or a leader who demands transparency, it is left to a diocesan bishop or the parish pastor to decide who needs to know what. And that decision does not typically include the people who pay the bills.
1. Chang, Patricia M. Y., Wulff, David M., Treviño, A. Javier, Money Matters: Personal Giving In American Churches. Journal for the Scientific Study of Religion, 00218294, 1996, Vol. 37, Issue 1.
2. Hoge, Dean; Zech, Charles; McNamara, Patrick and Donahue, Michael J. Louisville, Money Matters: Personal Giving In American Churches. KY: Westminster John Knox Press, 1996. 248 pp .
3. Richard J. Vargo, Effective Church Accounting, Journal of finance. 2001. pp. viii, 212.
4. Cashman, Robert. The Finances Of A Church. (New York: Harper and Brothers, 1949, pp 159)
5. Galliart, Williard H. Church Accounting. Issues in Accounting Education, 07393172, 1999, Vol. 5, Issue 2.
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