Metrics that drive sustainability: what gets measured — and managedbudgeting, Church Growth, FINANCE, Financial Services, Latest News, LEADERSHIP, Software, TECHNOLOGY Wednesday, October 5th, 2016
By Rebecca M. DaVee, CPA
Examining the value of church metrics
How many times have you sat in your finance committee meeting reviewing monthly budget reports and wishing you could run, hide and never come back?
I’ve watched each of you squirm. I’ve watched you sweat. I’ve watched you wish you could dissolve into the seams of the carpet because dissecting, translating and understanding financial data just isn’t your cup of tea. If it was, you’d be an accountant instead of the senior pastor. Right?
Over the past 30 years, I’ve sat in business meetings with pastors and board members and watched them cringe (literally) when required to review yet another financial report from the business office. Their eyes glaze over, and they begin doodling and drawing pictures on the financial statements.
Why can’t executive leadership love financial statements like I do?
Why can’t financial data be intuitive to pastors?
Why can’t this data be relevant and absorbed at the 30,000-foot level instead of at ground zero?
Why can’t bookkeepers and financial secretaries read the pastor’s mind and give them a “top 10” list of data that could be easily measured and managed?
Why? That’s an excellent question
As accountants, we love financial statements and numbers, row after row after row. But, we’re the number-crunchers — and you should expect us to love reams of financial reports. The more, the better! We would never conceive of “less is more.”
Church leaders aren’t typically accountants. So, what’s meaningful to we CPAs is uneventful for them.
From a numbers standpoint, each Monday morning the senior pastor really has five questions he or she needs answered:
1) What was attendance this past weekend?
2) How much was the weekend deposit(s)?
3) Is payroll covered?
4) Has the mortgage been paid?
5) Are we “on track” (translation: on budget)?
These five broad questions relate to performance — and, ultimately, to church sustainability. Numeric data tells a story that drives church resources, whether a church tracks cars in the parking lot, first-time visitors, Sunday school attendance, giving units per location or by service, and / or text-to-give donations. These operational metrics tell where and how a church is growing, and whether or not the church can effectively manage additional growth.
If a picture is worth a thousand words, then a thousand pictures create what? A story. A story that defines effective ministry and sustainability.”
It’s all in the numbers!
What gets measured, should be managed. Why measure if it’s not relevant? It’s a wasted effort. Plain and simple. The dilemma for leadership is understanding what should be measured.
To that end, certain tangible operational risks always keep church leaders awake at night:
- When do we “staff up” to handle congregation growth and related pastoral issues?
- When should we outsource activities that have traditionally been performed by staff?
- Should we rent space instead of build, or should we expand our current facility?
- Should our annual budget include long-term maintenance projects?
- Should we create a foundation or permanent endowment to manage our long-term repair and replacement costs?
These challenges are navigated by strategic governance.
Key performance indicators (KPIs) measure effective programs and strategic governance. KPIs, or metrics, define standards of efficiency, performance, progress and ministry outcomes.
See if the following equations make sense:
If numbers + statistical information = ratios,
then Ratios = Performance Metrics
If performance metrics = effective ministry,
then Effective ministry + STAKEHOLDERS = Sustainability
Can you see how this information could give senior leadership tools to sustain the growing demands or opportunities of their congregation? These metrics are snapshots that define the operational, financial or spiritual health of a church.
If a picture is worth a thousand words, then a thousand pictures create what? A story. A story that defines effective ministry and sustainability.
Join us over the next several issues as we explore 10 church metrics that define and drive sustainable ministry for churches.
Rebecca DaVee is a partner with Salmon Sims Thomas & Associates. She has been working with churches, ministries, televangelists and other tax-exempt organizations for more than 30 years. For more information, visit www.sstcpa.com.