Every Church’s Business Environment is Complex

Every Church’s Business Environment is Complex

Whether a church has 100, 1,000 or 10,000 people, the business of church is complex. According to industry research, there are approximately 300,000 churches in the United States. Of those 300,000 ninety percent have around 100 members. This means that the majority of churches in our country can only afford to hire one full-time, shared, or bi-vocational pastor and perhaps a part-time administrator or bookkeeper. 

It is unlikely that the church of 100 people has an executive pastor. That is a real problem—all churches need one! I initially started writing this article to pastors who think they can cover the pastoral and business roles of a church. However, I switched the target audience to members of the board who believe that the pastor can handle the business side, saying, “The church only has 100 members so it can’t be that complicated.” They are wrong.

Churches of all sizes deal with the same business administration challenges and accompanying stress. The size of the issues is radically different, dependent upon the size of the church family and staff. But, in terms of general topics, the list is usually the same. That list can be broken into three main categories—staffing, finances and processes/systems. Each of the items are made up of sub-categories that are prioritized differently depending on the church’s season of ministry.

Most pastors are not trained in business theory, nor have experience in running a business of any size. You are probably nodding your head in agreement, saying, “So what is the point?” Church boards should not expect their pastors to handle something that the pastor was not trained for—nor wants to do. I occasionally run into board members who tell me that their churches are “not that complicated” and “what else does a pastor have to do every week?” That mindset is contributing to a significant number of pastors burning out and departing from ministry. Even worse, many never return.

As a business and ministry coach for churches in the 100-800 range, I daily see the mess that a church gets itself into. This is often due to a business-related requirement that the church was unprepared to address or didn’t know about. I regularly help churches with questions about their finance structure, staff issues, systems, and budgeting processes. Most of the time, churches do not think about these issues until the board, bank, insurance agent, or mortgage company starts pressuring the pastor to produce reports or change the current setup. 

Churches need help navigating relationships with vendors and service providers who speak a different “language,” have profit-focused goals and produce contracts that can be completely incomprehensible. There are complex staff issues that require modern HR theory and best practices to solve. How often we have heard about a church leadership team firing a previously loved and trusted staff member, causing trauma that could result in a lawsuit.

I believe that churches are doing their best and some of these situations are out of their control. Most boards and pastors seek help by hiring business specialists, attending seminars, watching countless webinars, and reading the latest books—yet they often end up with a mess. I applaud their efforts but they need to let business things be handled by business people, whenever possible. The key is to make sure that the business person has a pastor’s heart. When they do not, the collateral damage can hurt the church for months—or even years afterward.

That all makes sense except for the part that says, “all churches, regardless of size, have the same issues.” Many question whether churches with 100-800 members have to deal with the same complexities as a 3,000+ member church. Let’s visit the three major areas of staffing, finance, and systems/processes and see some examples.

Staffing

Whether you have one paid staff member or 140, you need the basic components of a legally compliant and documented staff environment. If you do not have a staff handbook, job descriptions, evaluation processes, clearly-communicated goals and expectations, and other critical policies and guidelines in place, you may be open to lawsuits or continuous issues relating to performance, engagement, and accountability.

The easy answer to the question of policies and handbooks is to do a quick search in Google and download templates that you can modify. That seems like a good answer except that marketplace-oriented documents do not take into account the uniqueness of ministry and the special allowances that are afforded a religious organization. There are some sites that offer free templates (and others that will sell them) that are tailored for a generic church setting. That is a good route if you have the expertise and time to adjust it to your church, denomination, and/or board’s requirements. Taking the time to adjust the template is tough when there are weekend services to plan for, hospital visits to schedule, and a stressed-out spouse waiting for you to take over caring for children. All three of these examples are true of 100 member or 1,000 member churches.

Consider annual reviews, goal setting, and evaluation techniques. You owe your staff a job description that is based in reality, has clearly defined goals, and a feedback delivery process that is life-giving and encouraging instead of terrifying and demeaning. Setting up these three components requires some level of expertise to ensure that normal business techniques are adjusted for ministry leaders. A 360 degree evaluation sounds like a really great way to provide feedback and take the focus and pressure off of a single person. But, it can also destroy relationships if the results of the process are not confidential and people feel like their “friends” on staff threw them under the bus. This is definitely an area where you want someone with experience to implement a God and people-honoring process that protects you from issues.

So, does the size of your church matter when it comes to providing a caring, goal driven, documented, and feedback-oriented environment for staff?

Finances

Whether you have 100 people attending or 1,000, if your finances feel wobbly to the church family, you are going to have trouble with inconsistent weekly offerings, engaging volunteers, or raising money for special projects.

Boards generally are compiled of business people who are used to reading and leading with finance tools like profit & loss statements, balance sheets, and lots of graphs that try to tell the future. Most pastors are not finance experts and would rather pray with a struggling church member than create any of the standard, GAAP-related documents. But these reports have become the standard and pastors are judged by their ability to create them quickly, completely, and accurately at least once a month.

It is unrealistic to expect a people-focused person to sit at a desk for countless hours, making sure that every penny is accounted for and properly reported. I may be old school when it comes to the role of the pastor, but I want my pastors to be pastors and not small business operators. In the area of finance, it is not the normal ministry professional who is good at dealing with both people and money—unless they are an executive pastor or ran a business before being called into ministry. Even then, a transitioned pastor needs to become more people-oriented and less business-focused once they begin shepherding a flock.

I use a few core philosophies to guide my thought processes when I help churches with finances. Finance reports need to be translated into dashboards that present the state of the church in a crystal clear way for those people who do not normally read a finance report. All sizes of boards appreciate simple, gauge-driven dashboards that have three possible stages of red for danger, yellow for caution, and green for everything is good to go. The standard reports are always there for the inquisitive who need more data. But once the board gets used to the simple dashboards, the finance section of the meeting becomes shorter and everyone has a better feeling for the state of the church.

Another core philosophy is that the church leadership needs to present totally transparent finances to the board, volunteers and attendees. Being totally transparent means that everyone can see everything, the numbers make sense down to a penny, and how we present the data is aimed at simplicity and complete understanding. This is also true regardless of the size of your church. But surely a church with 100 members does not have to focus on finances at this level, right? Wrong! If you run your finances loosely, your offerings will stall or drop, you will not be able to refinance your mortgage, and you will waste money on a professional audit. Finances have to be spot-on and completely trustworthy. Using business tools and reports to manage church finances is not really apples to apples but it is a standard that everyone understands.

Systems/Processes

How about in the area of systems and processes? We are not talking about ministry systems and processes; instead, let’s focus on the business side. Most churches handle business systems and processes through brute force, doing whatever they have to in order to get the task done. All churches have systems and processes, but most do not document them or seek out best practices. I frequently win over the hearts of church administrators and pastors when I talk about making a decision once, instead of over and over again. Documenting decisions and systems will help them focus on ministry and not on daily managing the business side of the church.

This is another area where we can free up our pastors and staff to care for people with the majority of their time. Once you have the policies and systems documented and on a shelf (figuratively) you will not have to waste time again discussing how you do what you have already done before. If you can think of a system or process that is “big church only,” I bet I can point out a 100 member church that needs it too.

Systems and processes are the fence around the playground that free up the staff to explore to the edges and not be stuck in the middle having to continually ask for directions or boundaries. Even a church with a single staff member would profit from setting those boundaries in place. This is definitely an area where an XP can jump in and help implement turn-key solutions in all of the business areas of the church. Business issues or questions need a business leader with a pastor’s heart to answer them and create best practice solutions.

Conclusion

So, do you agree that all churches have the same business issues and that it is not a function of the number of people who attend? We can try our best to stop our churches from becoming “too corporate” and businesslike. But that will only mean that the next time we have to interact with the marketplace, our processes and systems will be even more foreign and incompatible. Nothing makes me sadder than seeing a church waste resources or lose their pastor because of a failed interaction with a business person or organization. 

My plea is that boards would stop holding pastors accountable to leading the business side of the church and focus their energies on identifying business people with pastor’s hearts (XPs) to come alongside the church and carry that load. I hope these examples have started to convince you that the complexity of the business environment of your church is not determined by the number of people who attend. Every church is complex and business issues need business-oriented pastors to resolve them.

2018-09-07T18:21:59+00:00By |Church vs. Business|

About the Author:

John Mrazek III
Dr. John Mrazek leads a ministry called SharedXP that provides part-time executive pastor services to smaller churches, church plants, and churches with an XP that need extra band-width or special skills for a season (www.sharedXP.org). He consults regularly in the areas of strategic planning, staff assessment, aligning resources with mission, and implementing best practices from business and ministry. He also teaches classes on leadership, change management, and organizational behavior at colleges and universities in the Colorado Springs and Denver areas. John, his wife, Connie, and their three grown children live in Colorado. He can be reached at 847-867-1662 or by email at [email protected]