Accounting and Money for Ministerial Leadership. Nimi Wariboko

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      Every church starts from Box A, which has set of products (services) that it offers to an existing base of membership. When many pastors talk about change processes in churches, they think of only how to deliver current products and services reliably and efficiently. But the pastor wants to either increase membership or draw more resources from the society or both. There are three ways to do that, according to this model. If she decides to work with Box C, she will offer new services (products) to the existing members and in exchange members give more resources (time, money, commitment, satisfaction) to the church. Here the pastor goes further than her counterpart in Box A to better understand what her members need and provide the services and products that meet such needs. She can even revolutionize her organization, searching for products and services that the members might need or truly value in the future but have not yet asked for. Staying ahead of her members is the best way to ensure they do not outgrow her or the church.

      Alternatively, she can offer the same old set of services and products to new members, as shown by Box B. This is what churches typically do when they want to expand. They increase their membership drive. Box D is the most difficult place in which to be. The church is both fashioning new services and products as a way to attract new members. The pastor is dealing with new membership and new products.

      Accounting and Ministerial Leadership Judgment

      All the knowledge we have put forward in this introduction will not be of much help if the pastor cannot “speak” the language of business, of accounting. The pastor needs at least basic training and information to enable her to interpret the church’s financial statements and form a perspective on its future economic well-being. Accounting translates economic relationships between the church as an entity and its members and larger society into quantified concepts and numbers that are easy to grasp. Accounting numbers and ratios are often meaningless if they do not provide the user with a perspective and projection of the future. For accounting ratios and analyses are only needed to guide decision-making that produce future costs and benefits, not to predict the past.

      Ratios are supposed to answer as well as provide numeric quantity to questions. Hence the value of a ratio depends on its ability to provide the answers to worded questions. If you don’t ask the right questions you cannot develop the right ratios. If you discover that a particular ratio you are familiar with cannot properly answer a well-worded question, don’t try to twist the ratio. It is just not the right ratio for the problem you are confronted with.

      Accounting numbers could be descriptive and normative. Some ratios or numbers allow us to make immediate value judgment, whereas others only describe the organization we are analyzing and do not allow for immediate judgment. Ratios such as growth in equity (net assets; do not worry about it now, it is explained below) are normative. Some may think that a church that is accumulating surplus year in and year out might be doing something wrong. A church that is accumulating interest income on its bulging endowment might be seen as a good steward or as sequestering wealth instead of using it to further the mission of Christ. On the other hand, the net interest margin between its investments and its loans do not allow for immediate judgment. They merely describe the church at a given date.

      The pastor also needs to note that accounting numbers or ratios are always about time and relationships. Time ratios measure changes in a particular category in the financial statement over a specific period. But relationship ratios indicate relation between any two items at a particular time. For instance, the ratio of operating expenses to revenues (offerings, tithes, and contributions). As the pastor becomes familiar and experienced with her church’s financial statements, she will gain better knowledge of a church’s economic well-being if she asks two sets of pertinent questions experienced analysts always ask: What is the level? What is the trend? Then she will ask what are the reasons for changes or stability in the ratios identified. With experience, she will develop a knack to identify which ratios to select and examine more closely, and avoid getting buried in the plethora of ratios.

      The preceding discussions are meant to whet the appetite of the students and pastors to delve more into accounting and are not meant to turn them into accountants. In fact, this book will not turn you into an expert financial analyst or manager, but give you the basic competence which will allow you to translate the language of your treasury department and finance committee into the ordinary language you understand and thus use financial data for the spiritual and managerial guidance of the church. Do not be afraid, I will hold your hands as we take our first lesson together in the basics of accounting in the next chapter. Relax, I am not throwing you into the deep end; you will only touch the edge of the water with your toes.

      A Word on Combined Theology of Accounting and Money

      This book aims to provide pastors and seminary students who have no training in accounting and economics with the basic competence they need to understand financial statements and monetary issues in order to lead their organizations and lead them very well. Information and ideas in each chapter will be presented in such a way that the reader does not only gain training in technical matters of accounting and money (economics), but also garner theological-ethical understanding of social issues relating to the disciplinary fields and practices of accounting and monetary economics. Every chapter will have a discussion of an idea or practice, showing that the intersection of accounting/money СКАЧАТЬ