Why you need a finance committee

Does your house of worship have an active finance committee? Or is there one person who takes on the task of managing your money and the responsibility of paying your bills? Here are five reasons why it’s important that a finance committee plays an active role in deciding what happens to money your members contribute:

1. Oversight – There should always be more than one person counting money or having access to a bank account. This is for both the house of worship’s protection and that of the person handling the money. There is much less chance of money mishandling (or accusations of it) if multiple people are involved with an organization’s money. Even if the person who handles your money ultimately reports to the house of worship’s council or board, the members of that group probably don’t know the intimate details of the finances. The finance committee does.
2. Budget development – The development of a budget is arguably one of the more important tasks a house of worship undertakes over the course of a year. That’s because the budget is a living, breathing reflection of the house of worship’s mission and priorities. Each department of the organization can and should develop its own budget projections, but ultimately, it’s the job of the finance committee to figure out how to balance the congregation’s wants and needs with how much money it can reasonably expect to take in during the year.
3. Maintaining cash reserves/emergency funding – Despite every organization’s best intentions, emergencies happen, and they usually require extra money. A finance committee takes ownership of making sure your congregation keeps its cash reserves intact. Accountability is important, and it is much easier for a group of people to maintain than for just one person who is in charge of the house of worship’s finances.
4. Good stewardship – Houses of worship rely completely on donations—and the people who make those donations expect they will be put to good use. Members of a finance committee can hold each other accountable for using the money only to advance the congregation’s mission. This team of people should challenge any spending that does not support the group’s mission, vision or strategy.
5. Financial teaching – Ideally, members of the finance committee will be people who are well-versed in business, management or accounting. As such, they can offer financial teaching to the congregation as a whole and individual members in particular.

Interested in more materials to help mitigate risk? Visit out safety resources for houses of worship page.