When I picked The Wall Street MBA by Reuben Advani from the bibliography of the XP Online Course on Finance, I wondered what the connection to church ministry would be. It turns out that the connection to ministry isn’t directly there at all. This book is a secular introduction to corporate finance from a guy who worked in this profession, and now teaches secular seminars on this field. However, there are many indirect benefits, if only an XP can use some imagination.
In working through a book like this, an XP can better understand financial concepts as they relate to the church. Perhaps even better, as an XP gets a brief glimpse of the corporate world, they begin to understand some of the same language as the men and women in your church who live and deal in the corporate world. (Warning: Use advanced financial lingo with your people at your own peril. Get it wrong and there will be major egg on your face!)
The book is divided into two main sections: Accounting and Finance. The arrangement is logical and progresses at an appropriate pace.
In the section on Accounting, there are sections that are very helpful on reporting: accounting basics, balance sheets, income statements. There are also very practical sections that more directly relate to church financial management, such as cash flow management (extremely helpful relating to church!), fraud and manipulation (unfortunately also very helpful!) and financial analysis (financial projections are key to planning and decision-making).
In the section on Finance, there is a section on Cost of Capital, which was surprisingly valuable when you translate that into thinking on the opportunity costs of a church’s decisions. The section on Mergers and Acquisitions also gives fodder for thought in today’s multisite church world.
One obvious downside is that there are tons of formulas that are interesting but ultimately don’t cross over to the church world. An example of this is a long discussion of how to calculate a company’s P/E ratio. Initially, I “hung in there” and focused on understanding and practicing each and every formula. As the number of formulas mounted into the dozens, I began focusing on concepts and began to see that The Wall Street MBA is actually a reference book that could be aptly named “Corporate Finance Reference for Dummies.”
Still, the tone is warm and personal, and the examples are practical (and many times humorous). Advani makes a real attempt to help corporate finance novices see what’s really going on. Throughout the book, it is obvious that he spent some real time on Wall Street personally; there is a real effort to let readers know that things are almost never as they seem (manipulation is rampant, to say the least). This is indubitably helpful to help wipe some of the “naïve” off less experienced XPs.
At the end of the day, I would recommend this book for executive pastors. It can’t hurt to broaden our base of financial understanding and do the work of imagining the links between church and corporate finance.