One of the reasons an executive pastor should have lots of financial background, preferably from outside the church, is the significance of the role of Chief Financial Officer (CFO). That’s right, depending on the size of the church, either directly or indirectly, the executive pastor is the chief financial officer (CFO) of the church.
In a podcast a while back, Thom Rainer highlights Five Things Church Leaders Need to Know about Ministry Finance. It’s a great podcast! I think it illustrates the issue and why many churches hire an executive pastor once their church gets close to the 1,000 mark in terms of average weekly attendance. The amount of “stuff” involved in leading a larger church, especially in the financial area, begins to distract the senior pastor, requiring expertise in areas not typically part of their background, experience, or gifting.
So what are the duties of the executive pastor as the CFO? Here’s a summary:
- Cash Flow – The executive pastor must manage and control the cash flow for the church.
- Liabilities – Understanding and managing all church financial liabilities (long and short-term) is another important duty of the executive pastor. This is usually a mortgage of some amount and duration and lines of credit and other liabilities.
- Financial Performance – How do we define financial performance in the church? Obviously, we are not in the “money-saving” business. We’re in the kingdom-building business. And, God provides financial resources to this end. Therefore, financial performance would be defined as “performance to plan,” including any cash reserve goal that’s part of the plan.
- Department Leadership – Of course, the executive pastor oversees the accounting or finance department. Depending on the size of the church, the department’s size varies from a part-time bookkeeper to a finance manager with accountants and purchasing staff.
- Budgeting and Expenses – After the financial plan is in place, the executive pastor is responsible for managing spending to budget. This may include delegating spending authority to other staff.
- Financial Relationships – The executive pastor establishes and manages relationships with local banks, contractors, etc., as needed to ensure resources are available when needed.
- Financial Business Processes – Defining, documenting, and overseeing financial business processes (handling the weekly offering, payroll, purchasing, petty cash, etc.) is an important part of an executive pastor’s CFO responsibilities.
- Reporting and Record Control – Finally, the executive pastor is responsible for periodic reporting to the church’s board (maybe others?) and ensures that required record-keeping methods and practices are in place.