Now Is the Time to Review Your Ministry’s Financial Management
(Originally published as an article within ECCU’s former e-publication, Ministry Banking Today.)
Economic uncertainty is a common topic of discussion these days. At times like this, purposeful and transparent management of a ministry’s finances is most important. It's been said that people don’t give money because of good financial management, but they will stop giving without it.
Especially today, ministries need to assure donors that their contributions are managed well and wisely. But what areas of your ministry’s operations should you concentrate on to maintain high donor confidence?
Henry Chi, a vice president with ECCU’s ministry development group, suggests four priorities for any ministry looking to more effectively manage their finances in alignment with their financial structure and ministry objectives.
Ensure financial integrity. Integrity is foundational to financial management. If a ministry’s reputation is called into question, donors may stop giving. So they must be confident that those who handle their contributions are held appropriately accountable. This means implementing the proper systems, standards, policies, and controls to safely manage ministry funds.
Maintain adequate liquidity. Who hasn’t had to say no to an unexpected ministry opportunity because there wasn’t enough cash on hand to pursue it? The way to ensure having capital for these opportunities, or for unexpected expenses, is to establish and maintain an adequate liquidity target and appropriate level of reserves.
Maximize cash flow. Having the funds to pursue your ministry’s mission involves more than simply bringing in enough revenue to meet your budget. Effectively utilizing banking principles, tools, accounts and services, as well as the appropriate financing solutions can help increase cash inflow while at the same time reducing expenses.
Leverage assets. Do you think of your facilities as a place to do ministry or as an asset that can actually help you do ministry better? In what ways are you optimizing your financial and human resources to further the kingdom? Leveraging assets means acquiring, building, renovating, or maintaining the facilities you rent or own to maximize their contribution to the pursuit of your mission. It also means understanding and creatively allocating all the assets you have been entrusted with—people, cash, property—to further the kingdom.