With scandals and frauds exposed in churches, financial transparency will go a long way to restore integrity and build confidence among the people.
Every state adheres to what is commonly called a Sunshine Law, which guarantees public access to records held by the government. Churches could use something similar.
Churches aren’t known to open their financial, compensation and other records to parishioners. Yes, go to the pastor and ask for a private opportunity to examine the data and you will likely get it. But it is mostly with a grudging compliance that makes an inquirer feel foolish and intrusive.
Churches aren’t very transparent, but they ought to be. The time is well past due. Dave Travis of Leadership Network asks: “Do church leaders make decisions and handle money ‘in the light of day,’ or do things happen behind closed doors?”
Travis writes about transparency in a new booklet, What’s Next?: A Look Over the Next Hill for Innovative Churches and Their Leaders, and reflects: “Once upon a time, church members simply trusted their leaders. Some still do. But in the world we now inhabit, trust depends to some extent upon reasonable transparency. In the future, it could become a critical issue.”
It is a world too where fraud and embezzlements are reported nearly weekly in the media—involving staff and volunteers working with the funds of the church. Church fraud is epidemic. News is replete with stories of pastors with outsized compensation packages. And when leadership does share the new budget figures for the next financial year, the line items are rolled up into a handful of categories without any real detail by which to judge the rightness of the expenditures.
“Going forward, we feel that voluntary transparency will bolster churches in the eyes of the public – members and outsiders alike,” writes Travis. “Younger adults will insist upon it, being accustomed to detailed reports from other charitable organizations.”
Annual reports, posting of financial reports to the church website, audited financial statements at least every other year, 990 filings (though not required by law), and use of outside compensation comparisons all demonstrate financial integrity and build confidence. More churches are opting to abide by the standards of the Evangelical Council for Financial Accountability that now is for congregations as well as parachurch organizations.
Next year Church Executive will begin a series of articles on “Responsible Financial Stewardship” in association with the ECFA.
And we will be monitoring and reporting on this topic in other ways through the year. In a related action, likely in December, ECFA will release the first part of the report of the Commission on Accountability and Policy for Religious Organizations to U.S. Senator Charles Grassley.
Dave Travis says that transparency and accountability aren’t the most favorite topics for most church leaders. “Their lives and ministries have enough challenges without the added layers of expense and tough questions that invite criticism.
“Even so, we believe their openness and transparency should be hallmarks of any authentic church. Practically speaking, these things help win confidence from the community. In the long run, they’re worth the headaches. We suggest [the initiatives] demonstrate to the world that our churches are beyond reproach.”
Even as our churches ask us to live our lives beyond reproach, so should they.