By Pastor Mark E. Whitlock, Jr., Christ Our Redeemer AME Church, Irvine and Executive Director, Cecil Murray Center at USC
The Church is required to be transparent, fiscally accountable, and work together to manage God’s money. Too many churches fail to show members the money. But when the money is funny, then the begging starts. If you don’t want money to stop flowing to the church, then church leaders need to show members where the money is being spent in the church.
The pastor, deacons, stewards, trustees, ministry leaders, and pew warmers have a fiduciary responsibility of being transparent, accountable and working together to manage the church’s money. It’s time to show members the money.
Where is the money going? The IRS Tax Guide for Churches and Religious Organizations requires churches and religious organizations, like many other charitable organizations, to qualify for exemption from federal income tax under IRS section 501(c)(3) and are generally eligible to receive tax-deductible contributions.
One method to qualify for tax-exempt status is net earnings that may not inure to the benefit of any private individuals (i.e., pastor, deacon, etc.) and the organization’s purposes and activities may not be illegal or violate fundamental public policy. The Federal Government is one of the church’s greatest contributors.
Churches don’t pay income taxes on tithes and offerings! Therefore, the church benefits from not paying taxes. Does your church have an open book policy to show members the money?
The Federal Funding Accountability and Transparency Act (FFATA) was signed on September 26, 2006. The intent is to empower every American with the ability to hold the government accountable for each spending decision. The end result is to reduce wasteful spending in the government.
President Barack Obama’s administration is committed to creating an unprecedented level of openness in government. President Obama works daily to ensure the public trust and establish a system of transparency, public participation and collaboration. Openness will strengthen our democracy and promote efficiency and effectiveness in government.
Yet, some churches fail to practice openness in church finances. The church should have nothing to hide. All members are welcome to see the record of fiscal contributions, expenses, properties and equipment owned by the church and the top church leaders’ compensation packages.
The church should have regularly scheduled meetings reporting on all incomes, expenses, and church properties. This would help end unnecessary spending and poor money management. What does the church have to hide? God will hold us all accountable at the end.
Over next the two weeks, we will articulate methods of church budgeting, financial reporting to the board and membership, and how to develop a plan to raise money from non-members. Remember, every member has a right to see the church books. Every member has a right to expect financial transparency, accountability, and the opportunity to see the money.
The Bible says in Roman 8:28 – “And we know that all things work together for good to them that love God, to them who are the called according to his purpose.”