Transcript Denise Frost Wintec

Budgeting in Churches –
A Literature Review and
Research Agenda
Denise Frost
[email protected] Phone 834 8800 ext 8563
Overview of the Presentation
• Background
• Professional Financial Management
• Forecasting Income
• Research Agenda
Background
• Church budgeting operates on the principle of
stewardship.
• Literature on budgeting in religious organisations
falls into two broad categories.
• In the first category, a case study approach is
used to explore financial management in
mainstream churches.
Background
• In the second category are studies that examine
church budgeting in the context of an empirical
case study in a religious organisation.
Professional Financial Management
• Generally, only larger congregations will have
the financial resources to hire a full-time
accountant.
• Smaller congregations are more likely to hire a
part-time financial manager or rely on a member
of the congregation to fill in.
Irvine 2005
• Lay people with accounting skills performed
accounting tasks.
• Professional accountants were consulted on a
number of occasions.
• It is important that accounting professionals are
church members and not employees, as church
members are more likely to be committed to the
church vision and mission.
Kluvers 2001
• Most parishes employed an accountant.
• The accountant was required to have a relevant
tertiary qualification.
• The accountant did not have to be a member of
a professional body.
Jacobs 2005
• There was no rule that a qualified accountant
was required to prepare congregational
accounts.
• Church members preferred to deal with a person
with church connections even if s/he was not
adequately qualified.
Training of Pastoral Staff
• Pastors are usually selected for their spiritual
leadership.
• Often pastors have little training in financial
matters, yet are expected to participate in
making financial decisions.
• Often training on financial matters at seminary is
minimal.
Summary of Professional Financial
Management
• Churches often lack professional advice
because of resource constraints or a resistance
to ‘outsiders’.
Forecasting Income
• The revenue stream for a church is heavily
dependent upon individual donations.
• Hoge, Zech, McNamara & Donahue (1999)
report that in North America, individual donations
make up 90% of congregational revenue.
• Hodgkinson (1999) found that the average North
American congregation receives 81% of its
income from individual donations.
Congregational Donations
• Around 75% of donations are given by 25% of
the congregation.
• There are clear denominational differences in
the motives underlying the reasons individuals
give to a church.
• In American congregations, giving has been
found to follow a seasonal pattern.
Attempts to Anticipate Income Patterns
• Pledge cards – individuals pledge to give a
certain dollar figure on a regular basis (Futcher &
Phillips, 1986).
• Pledged or planned giving is associated with
higher levels of giving (Chaves, 1999).
Adoption of the Goals and Visions of the
Church
• The degree to which the congregation adopts
and supports the goals and vision of the church
as their own is likely to affect the level of
financial support given.
• Financial support is more likely to occur if
members adopt and support the leadership’s
goals and vision for the church.
Monitoring Income
• It is important to continually monitor income to
ensure that income is adequate to cover
budgeted expenses.
• One method is to make the dollar amount of the
weekly offering public.
• Makes church members aware of the current
level of giving compared with weekly budgeted
expenses necessary for the church to function.
A Proposed Research Agenda
• Previous studies have been done on
denominational, mainstream churches.
• No study done on an independent church with
no denominational ties.
• There are no prior studies conducted on
budgeting practices in any New Zealand church.
A Proposed Research Agenda
• There is no broad background knowledge about
the use of budgets and the budgeting process in
New Zealand churches.
• As an example, there is no indication of basic
facts such as the percentage of New Zealand
churches that use a budget.
Where to from here?
• Use a case study approach to study budgeting in
an independent church in New Zealand.
ANY QUESTIONS?