Ministries’ Banking Needs and 2012 Budget Forecasting (2011 Financial Forums Survey Results)

SUMMARY

In November and December 2011, ECCU and CapinCrouse, LLP, presented the 2011 Financial Forums for Ministries to educate ministry representatives about legislative, tax, accounting, and banking changes affecting ministries everywhere. Attendees were invited to complete a survey modeled after those sent to ECCU’s exclusive Ministry Advisory Panel (MAP)**.

158 ministry personnel completed the survey from a wide variety of ministry types and sizes. When asked about 2012 budget forecasting, 92% of respondents feel at least somewhat adequately prepared to forecast their 2012 budgets, but the concern most cited was uncertainty of the economy. On the topic of understanding their banking needs, over half of the respondents said a bank that understands their ministry’s needs is one that takes the time to know their mission/vision, program, and objectives.

** The MAP is composed of ECCU member and non-member ministry staff and leaders representing evangelical Christian churches, businesses, schools, and other ministries. If you would like to join the panel, simply follow the link provided. This report was produced by ECCU’s research department.

DEMOGRAPHICS

158 ministry personnel completed the survey, resulting in a 95% confidence level and a 7.79% confidence interval. The ministry types represented were:

The ministry roles represented were:

45% of respondents bank primarily with ECCU. The others bank primarily with Wells Fargo (16%), Bank of America (11%), Bank of the West (8%), and Chase (6%).

DOES YOUR BANK UNDERSTAND YOUR MINISTRY NEEDS?

In this section of the survey we sought to discover how important it is to ministries that their bank understands their needs. Our assumption was that all ministries would consider this at least somewhat important. Here are the results:

It was surprising that 7% of respondents stated it wasn’t all that important that their primary bank understand their ministry’s needs. However, the majority (63%) feel it is extremely important, and an additional 29% feel it is somewhat important.

While these results were somewhat easy to predict, what we really wanted to understand are the behaviors and/or actions a bank might exhibit which indicate that it understands a ministry’s needs. 72 respondents completed this free-text question, resulting in the following categories:

 

Summary of Findings
Banks need to first meet the basic banking needs of ministries. But to truly understand their ministry customers, banks need a solid understanding of those ministries’ unique operations and finances (e.g., cash flow seasonality and revenue sources). This can only be accomplished through personal customer service and follow-up. Thirdly, to become a true partner, banks must understand and share the mission, vision, and goals of their ministry customers.

It is highly likely that these behaviors were so prominent in this survey because over half of the respondents bank primarily with ECCU and have come to value the credit union’s commitment to partnership and its expertise on the uniqueness of ministry finances and operations.

2012 BUDGET FORECASTING

The uncertainty of the world economy, unemployment, political unrest, and growing congregational needs are all considerable sources of anxiety during a ministry’s budgeting season. Nonetheless, our respondents were very optimistic about their ability to predict their 2012 revenue and expenses.

Question: How equipped do you feel to adequately forecast your ministry’s revenue and expenses for the next fiscal year?

  • 91% of respondents feel at least somewhat to extremely equipped to adequately forecast their 2012 revenue and expenses.
  • 8.6% of churches and 14.3% of parachurches feel unprepared.
  • 100% of colleges and K-12 schools are at least somewhat confident in their forecasting ability.

 

When asked to describe the main reason for how equipped they feel to adequately forecast for 2012 revenue and expenses, their 117 responses fell into these 12 categories:

  • 50% of respondents who don’t feel adequately prepared cited a lack of training or financial education.
  • 84% of respondents who feel only somewhat prepared cited the economic conditions as a reason.
  • 60% of respondents who feel extremely prepared credited their historical data, while 76% expressed confidence in their expertise.

 

Summary of Findings
Although the majority of ministry respondents feel adequately prepared to forecast their ministry’s 2012 budgets (thanks to strong historical data and/or financial expertise), the high attendance at this year’s Financial Forums for Ministries suggests they also feel there’s more to be learned and improved upon.

Based on the responses and different levels of financial expertise, it sounds like ministries would benefit from additional breakout sessions during the events that address financial matters of varying complexities, so that all attendees can maximize their learning. It would also be helpful if ECCU recommended tools (e.g., software and templates) for smaller ministries with less experience or expertise.

Overall, it is encouraging to see so many ministries seeking to expand their financial management capabilities and level of readiness to ensure the continuation of their ministry in tough economic times.

If you were unable to attend this year’s forum but would like to tap into the expertise and insights delivered, visit www.eccu.org/resources-2011forums.

 

Get Connected