November 27, 2019

Money Management for Churches with Dan Dorner – Episode 121 | The Unstuck Church Podcast


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Foundational Elements of Good Financial Management

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Churches today are facing more challenges than ever when it comes to their finances. Discipling givers, managing money and creating annual budgets are complicated issues that every church has to navigate.

Fortunately there are some foundational elements of good financial management that churches need to consider.

This week’s episode continues our four-part series on solving some of the specific issues churches face when it comes to money. Dan Dorner from In-Rhythm Consulting joins me on the podcast to talk about how churches can better steward their money and resources.

Specifically, you can expect to learn:

  • How to overcome some of the key challenges to good financial management
  • Strategies for structuring accountability while creating opportunities for ministry
  • How to speed up the financial decision making process
  • Practical advice on best practice budgeting strategies
  • Tips for influencing greater generosity
Money should be handled in a way that brings glory and honor to God, provides vital ministry and avoids legitimate criticism Click to Tweet True biblical stewardship is being willing to courageously say no to even good things so we can say yes to the very best things. Click To Tweet

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Sean: 00:02 Welcome to the Unstuck Church Podcast where each week we’re exploring what it means to be an unstuck church. Churches today are facing more challenges than ever when it comes to their finances. Discipling givers, managing money and creating annual budgets are complicated issues that every church has to navigate. This week on the podcast we continue a four-part series on the specific issues churches face when it comes to money. Today, Tony is joined by Dan Dorner from In Rhythm Consulting for a conversation on how churches can better steward their money and resources. Make sure before you listen to subscribe to get the show notes in your email every week, you’re going to get one email with the leader conversation guide with all the resources we mentioned and an archive of all of our podcast resources from past episodes. You can sign up by going to the We think outside perspective is really important and we encourage you to find that outside help often. Now we need your outside perspective on our podcast. Jump over to the and let us know what you’d like to hear more of in 2020. It’ll only take you 60 seconds and you can impact thousands of churches by sharing your voice. You can do that at Now let’s join Tony and Dan Dorner for this week’s conversation.

Tony: 01:26 Dan, thanks for joining us for the conversation today. I’ve known about you and your ministry for years, but my sense is those listening may not be familiar with who you are or where you’ve engaged ministry in the past. So can you give a little bit of your backstory before we dive into today’s conversation?

Dan: 01:41 Well, certainly I’m honored to be a part of this Tony, and my story is that I was minding my own business when the Lord called me to serve at a local church level as a church administrator I said yes to that opportunity and served the First Baptist Church of Woodstock, Georgia for 20 years as a church administrator. And Dr. Johnny Hunt was my pastor and Dr. Hunt had a ministry to help pastors in churches all over the country. So if you served on his staff, you did the same. And I found joy in that and it seemed to be some value in that. And at a later point, 20 years later I decided to launch a consulting firm to assist churches with their finances, administration and human resources. We narrowed to that particular area of the ministry to help pastors and church staff specifically because most of them aren’t trained in those areas. And because we had learned so much, either by mistake or victory, we decided to speak into that part of what churches do. And so for the last 10 years, a small group of guys and I have been providing consulting and bookkeeping for churches. Not a ton of churches, but a small group of churches in the country. And it’s been a great joy.

Tony: 03:13 Well, part of the focus specifically on the bookkeeping and financial management in churches is where of course we’re focusing today’s conversation. We’re in the middle of this money series on the podcast and what I wanted to hit with you is just some of those foundational elements of good financial management that churches need to consider. Maybe it would be interesting, Dan, if we started, as you’ve been engaging with churches and without naming names, what do you think some of the key kinds of barriers or challenges to good stewardship financial management are, what are some of the common challenges you’re seeing in the churches where you are engaged?

Dan: 03:57 Well, I think having a link between the vision of a pastor and the churches map in terms of where it wants to go and supporting that with a funding plan and a budget plan and a day to day cash management plan that matches up with the same and in a lot of cases, I’m finding the polity of a church has those pieces separated where the pastor has a vision, but there’s a different group that manages the money from a leadership standpoint and even a separate group in a finance office that handles the day today. And in a lot of cases, we find a lack of alignment, with the overall vision. And so that’s where it starts in making sure there is agreement in terms of where are we going as a church and does our funding plan or budget plan and our day to day management of the cash match up with that.

Dan: 05:00 And in a lot of cases, we’re asked to come in and remove the rocks in the river to the free flow and health of the church from a financial standpoint. The other thing that I find is there’s in the church’s history, an episode or an event, be it economic or be it from a leadership standpoint where we may have stubbed our toe and made a mistake. And the trust in the leadership has been removed. And then in a lot of cases, I find the pastor’s been handcuffed by the past. He may not have even been there or it was a path that he was a part of. The flexibility of the church being able to move in the direction that the Lord is leading is limited by a group that says, we don’t want to go through that again.

Dan: 05:51 And as a result, we’re gonna push back on your opportunity and even your responsibility to lead. And that seems to be disappointing. And then the third thing is in a lot of cases the churches push the faith factor in terms of what they’re hoping the Lord might do to the point of presumption. And there’s a lack of prudence in a lot of cases and we’re extending and pushing what we believe our people can do and what the Lord might do in the way of provision. And we set our spending based upon that and obviously that tightens things up from a cashflow standpoint. And then we have a whole tributary of things that come out of that kind of decision making. So we try to help folks work within the difference between the responsibility we have to be good stewards and what is true faith as opposed to presumption upon the Lord.

Tony: 06:56 Well, I’d like to unpack all three of those areas a little bit beginning with where you began, which was around really how do we structure accountability and still then create opportunities for ministry to be engaged and actually for ministry to flourish in the long run. And you talked about maybe three different tiers of leaders, the board, sometimes a separate financial committee or sometimes that’s a sub committee of the overall board and then the pastor and the staff. And Dan in an ideal situation, from your perspective, what should those relationships look like? Where should the decision making land when it comes to the financial health and just the ongoing financial stewardship practices that are happening in the church in that ideal world? What would that look like?

Dan: 07:52 Well, it would look like agreement. It would look like everyone is embracing what they believe the Lord has represented as the way that we should go. I call it the individual fingerprint and footprint of our church. What is it that God has called us to do even beyond the generics of what the New Testament says a church ought to look like, there’s a uniqueness about every pastor, every leadership team, be it staff or lay leaders, and we need to embrace what it is that God would have us do and agree on that. And then of course, as it has to do with stewardship. I like the principles that were given to me literally on the night that I was asked to serve on a finance committee at my own church. My pastor preached a sermon that very night and he said that God’s money should be handled in such a way in the church that number one brings glory and honor to God. Number two provides vital ministry. And number three, it avoids legitimate criticism. And I have embraced those principles in every church that we’re trying to assist. And no matter how small or how big the church is I have found if leaders can embrace that principle and what it looks like in our church, we find great health. And then the question is, okay, who’s going to initiate vision? Who’s going to embrace and follow vision, and who’s going to hold leaders accountable to whether or not we’re going along the way that we believe God has called us to go. And we believe that we’re responsible to go as stewards in the church. So I hate to speak into what the polity should look like in a church, but I know in the end, no matter how we’re organized, be it pastor led or elder led, every church that I work with is different, as I’m sure is the case for you. And I don’t like to dictate the best policy. I like to say in the end if our policy is healthy and where we agree on where we are going? Who’s going to do what and what stewardship looks like.

Tony: 10:15 And then along those lines, what we’ve learned, and I think it’s just expressing maybe in a more specific way when the leaders that decide ministry strategy and direction and vision are different than the leaders that are making the financial decisions. If it’s not the same group in some fashion, it’s going to create an unnecessary barrier to the health of the church as a whole. So in other words whatever responsibility for ministry strategy and execution you give the staff, somehow you have to give them a certain level of financial decision making as well. Or at the board level, if the board is defining future mission, ministry, vision and strategy, that same group of people also has to have some significant level of decision making when it comes to finances rather than giving that to some other group of people. Does that make sense?

Dan: 11:17 Yes, I totally agree. And on a practical level, those that proposed the financial plan, the funding plan for the ministry ought to also have responsibility in the stewardship of that plan for the day to day. How does that look? Well, when a budget is proposed, I like for the chart of accounts to be set up based upon how the church is organized. And usually that’s staff members having a subset of responsibility within the budget once it’s proposed. And if giving is budgeted we like to see that money spent because it’s an investment in what would bring health and growth to the ministry if it’s well done. And so we like to have accountability for what’s proposed, being also accountable for what’s being spent. And then the board, if they’re overseeing the overall stewardship, we’re providing a report on a monthly basis that says, hey, we’re hitting our targets. We don’t have behavioral problems in terms of spending. And the investment is making a difference where it’s healthy and where it’s not. Obviously we need to point that out where behavior’s a problem. We need to slap a hand. I liked the fact that a board would agree with releasing a staff that’s doing the right thing with God’s money.

Tony: 12:45 So this kind of leads into the second area then, and you just referred to, a couple of keywords that I think that come into play are accountability and then release, encouraging ministry to flourish in our churches. But sometimes those two topics can feel like they’re butting heads. But what I’ve seen is in situations where churches actually have established healthy boundaries, guidelines for handling money, and you actually get the best of both worlds, the accountability and that opportunity to really empower ministry leaders to accomplish the ministry that they’re called to. So can you give us just some examples of areas where establishing healthy boundaries through guidelines can actually not only create that accountability but then real empowerment as well?

Dan: 13:41 Yeah. I define true biblical stewardship as being willing to courageously say no to even good things so that we can say yes to the very best things. We are working with limited resources. We know that we don’t have too much money in any church that I’m working with thus far. And so there’s a need for us to define what are the very best things that we can invest God’s money in. And we have some practices, even some ministry planning and budget planning processes that we like to initiate in the church that combines the staff with lay leaders and provides even the elders or a finance committee the opportunity to be a part of that process. So that in the end there is pure agreement in terms of number one, what the overall budget needs to be and then what the ingredients are for personnel, for ministry, for operations, for debt, and for positioning the church financially with a reserve level that in a lot of cases they don’t have. So that we have an overall ministry plan and then accompanying financial plan to not just steward the ministry for the next year, but position the church financially in a different place than maybe it is when the fiscal year begins. And then each month we look at that map, which happens to be the internal financial statements, of the church to be able to say, are we making progress? Where are we in terms of generosity? Where are we in the investment of God’s money and ministry? And is it making a difference? Are we seeing the return on that investment that we believe God told us we would see when we put the plan together?

Tony: 15:34 Yeah. And then what we’re seeing, Dan, and I’m assuming this would be the case in the churches you’re working with, is when churches lack that financial plan and then guidelines to support that plan and how it gets executed on a day to day basis. Then every time that there’s a financial decision, it has to go to the finance committee or the board to make a decision. And there’s a lot of kind of waiting around for decisions to be made when there’s not a good plan and there aren’t good guidelines in place. Do you see that as well?

Dan: 16:06 I do. And what we like to encourage is that once we put that plan together, now the only question is, does, the revenue match up with what we anticipated? If it does, we should spend that plan. Is it absolutely an investment in what we believe is best, say in student ministry or children’s ministry or worship ministry. What we’ve established in that plan is what we anticipate needing to spend to take the church down the track to reach lostness and to glorify God and to impact the kingdom.

Tony: 16:45 You, mentioned cash reserves. Do you recommend a certain guideline for churches when it comes to the amount of money they should have in reserve?

Dan: 16:59 Yeah, generally it’s more than what they have.

Tony: 17:03 Well, I mean, I asked the question because we’re running into way too many churches that are essentially living paycheck to paycheck. I mean, they’re really counting on this next Sunday’s offering in order to meet their current bills. And that’s no way for us to live in our households. But it’s certainly no way for the church to be engaging ministry either. So what wisdom could you give us on that?

Dan: 17:25 We recommend three months of your operating expenses in the bank that allows for you to endure a day when it snows and nobody came to church. Some type of an impact to the equipment, like a rooftop unit goes out, we’ve got to pay for that, that sort of thing. Different churches are at different levels in terms of how much of that three months can be achieved in a given year. And so we don’t overwhelm them with a Mount Everest three months if they are living week to week for years, we say let’s develop something and let’s put margin in our revenue and expenses where we’re receiving some unrestricted revenue that we’re not going to spend this year so that we can improve our cash position. And then I like to influence, even during this time of the year, a church not to use its fourth quarter bump in revenues to clean up things that they had to pay for earlier in the year when revenues weren’t strong. I like for the fourth quarter bump to actually be a bump in the cash position of the church and not necessarily be totally relied upon to pay bills.

Tony: 18:43 Yeah. And I’ll just tell you because you know, I started the Unstuck Group 10 years ago. It is when you’re moved from being in the second chair to the first chair and you realize your’e responsible not only for making sure that your family has food on the table, but now all the families of all the people on your team also have food on the table. The cash reserves allow me to sleep well at night. So, for you senior pastors that are listening to the podcast, if your church is in that situation where you’re kind of living week to week, I just want to encourage you for your health and your sanity. You need to start taking baby steps where you’re creating those reserves so that you’re not wondering each week are we going to be able to pay our bills.

Tony: 19:31 So that also then gets me to the third, challenging area you mentioned and it’s how churches approach financial planning really specifically budgeting and where faith comes into play. Because you kind of alluded to this situation where, and I’ve seen this many times where churches establish a budget based on giving that they’ve never seen before, but they’re just trusting that God’s going to provide it if there’s enough faith there. And yet many times what I find is that amount of money never comes in. And so churches are constantly having to make cuts in their budgets to match the reality of the giving that’s happening in their churches. So give us some wisdom on how we might approach budgeting and what we should be expecting as far as offerings going forward and how this faith planned, all of that. Dan.

Dan: 20:30 Well, the first deep conviction that I have is that finances should follow ministry and not vice versa. And so the ministry plan, the vision for where we’re headed as a church has to be primary in our planning and our budget planning. Secondly, I think conservatism especially that has to do with it helping the church get to a place financially that it may not be at currently. So sometimes I’m asked to come in and help the church and they’re in great position there. Their cash is strong and they don’t need to move to a different place in terms of where they are financially. And in that case we just try to keep from breaking things. But most churches that I’m helping would like to be in a better place. And so what we suggest is a good strong estimate of where you’re going to finish the year. And total unrestricted revenue is a good base to start making decisions on what next year’s budget might be. I know churches that plan and budget for 90% of that figure, that’s worthwhile if it can work. But a lot of churches need to expand their investment a little bit north of that. And here’s what I normally tell a pastor. If you’re gonna propose a budget, say 5% or less than what you anticipate in total unrestricted revenue this year, that’s what I call normal and achievable, what I would call faith factor, where the people that are already giving are already under the sound of your voice and I have more hope and more confidence that those people become good stewards and generous in their giving than say somebody that shows up that’s never been in your church before and so that 5% or less, I don’t flinch if it’s north of 5% I always ask the question, what are you going to do?

Dan: 22:32 What significant thing are you going to teach to influence generosity in your church that would allow me to believe that God’s going to use that to influence and impact and increase in your revenue north of 5% this year. If I don’t hear that, I try to talk them out of it like a sermon series or a Dave Ramsey class instead of classes that had not been done before, whatever it might be that they’re going to intentionally invest time and leadership into that might impact generosity would cause me to say, okay, I could live with a proposal north of 5% above what you saw this year in revenue.

Tony: 23:20 Dan, I really appreciate your, undressing those three key areas and what we’re about ready to offer the listeners is going to sound like a commercial. But I want the listeners to know you’re not paying for this. I’m not paying you for this. I just think the service that you and your team are offering to churches is valuable. And so can you just elaborate a little bit further specifically as it relates the financial side of helping churches get healthy, how your team steps in and actually helps.

Dan: 23:52 Yeah. I named the firm In Rhythm consulting after a study of the human heart and why the Lord used it so much in scripture. And what I found is that a man who has a heart, not beating in proper rhythm is dizzy and he stumbles and ends up in places he would prefer not to be. And when a church’s vision and its financial administration are not beating in proper rhythm, you find the same symptoms in the church where it stumbles, it has a hard time making decisions, it doesn’t see straight. And so we in a lot of cases were asked to come in and to fibrillate the heart of the ministry to the vision God has given either the pastor, the elders or whoever is in spiritual leadership of the church. And in a lot of cases I find that a pastor has clear ideas on where he wants to go, and ideas on what he believes God has called him to do. But, how to apply that to the financial management of the church is blurry to him. And so we help reinforce confidence that there is a plan that will financially support what God has told you. That’s the joy of working with churches and being in a faith based ministry is that we can believe that what God has said, he desires to happen. And so we come alongside pastors and give them probably more confidence than we do advice that they can get to the place that they believe with all their heart. God has told them to go. And it might be a step at a time. It may be a year at a time. But in the end, I tell pastors all the time, don’t ditch the target just because you can’t see how or when you’re going to hit it. Let’s embrace it together.

Dan: 25:45 And over time get there. I did that in my own church. We desired to build a building, without a capital campaign initially. And we embrace that conviction because we said it’s not the church’s primary job to raise money. Our job is to raise children and we believe the 2000 or so verses in the word of God that represent how to steward what’s been entrusted to us can apply to the church and be a significant part of our intentional teaching to be able to move in the direction of the conviction we believe God has given us. And sure enough, that’s what we were able to accomplish. So I’ve lived this in my church and now I’m embracing a willingness to help other pastors live it in their church.

Tony: 26:36 Well, there’ve been several times through the years, especially when I’m working with churches that have made that move from small church to midsize church or even in cases of midsize to large church and particularly and in seasons of transition within the finance team or the administration area. I’ve encouraged them to reach out to Dan and his team because the feedback I’ve gotten from churches that have engaged with you all, Dan, is that you actually provide a higher level of help, especially in this financial area, and frankly at less cost than it would be to hire somebody full time in roles to address these areas. And so if that’s your church too, especially for the senior pastors that are listening, this may be at least an option you would want to consider moving forward. And Dan, any final thoughts specifically for the senior pastors that are listening in today?

Dan: 27:36 Well, I want to encourage them that the Holy spirit can lead and common sense can be applied to your financial administration. Don’t be confused by the debits and credits, the CPAs and the bankers that have told you things that you do not understand… In the end, what’s in your heart can be applied even to this area of the ministry. And I encourage you to put your foot down and say, I’ll not accept anything I don’t know.

Tony: 28:06 That’s a good word. All right. Dan, thank you for joining us today

Sean: 28:11 And thanks to you for joining us on this week’s podcast. If you like what you’re hearing on this podcast, help us get the content out by subscribing on your favorite podcasting platform, giving us a review and telling your friends about the podcast at the UnstuckGroup. We’re working everyday with church leaders to help them build healthy churches by guiding them through specifically designed experiences that focus them on vision, strategy, and action. If that’s a need in your church, we would love to talk with you. You can start a conversation by visiting us at next week, we continue our series on finances in the church with another brand new episode. Until then, have a great week.

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