Getting Value out of Your Church’s Financial Data
One of my wife’s favorite television shows is “The Antique Road Show”. Each week, people bring all kinds of antiques and assorted junk to an exhibit hall where experts tell them what they have and more importantly what it is worth. I have to admit that the show has a certain appeal to me as well. I particularly enjoy the scenes where people bring in some object they thought was at best sentimental junk only to find out they possessed an item with immense value.
For instance, one man had an old sampler in what he thought was a very nice frame. He had decided to throw the old sampler away because he needed the frame for another picture. On a whim, he took “the frame” to the Road Show only to learn that he had an early 19th century sampler worth more than $50,000!
When it comes to financial reporting and analysis many churches resemble this lucky man. They sit on a wealth of financial information never realizing its tremendous value because most churches focus all their energy answering three questions: “How much money did we bring in?” “How much did we spend?” and “How much is left?”
While the answers to these questions are indeed important, they are concerned with where the church has been. But, by digging deeper into the financial and statistical information it already possesses, a church can not only know where it has been, but also spot trends and determine where it is going.
One way of digging deeper is to combine financial data with other information. Most churches, particularly the larger ones, have sophisticated church management software that captures significant non-financial information such as names, addresses, ages, zip codes, and contribution history to name a few. Combining accounting information with this information greatly enhances a church’s planning abilities.
To illustrate let’s focus on the revenues of a church. The process is begun by adding one question to the ones mentioned above. In addition to asking how much money the church has brought in, we also need to ask, “Who gave the money?”
In the next series of posts I will share several ways churches can dig deeper in order to answer this question.
Verne Hargrave is the Church and Ministry partner at PSK LLP and author of the book, Weeds in the Garden.
