1. Appearance of Impropriety
Probably the most important commodities for a board or executive team are credibility and influence. Without them leaders cannot lead. Poor management structure ignores these important commodities or, at best, takes them for granted. While there are many individual factors that can lead to the appearance of impropriety, having adequate controls in place goes a long way to minimize this risk.
If you don’t have them in place already, consider implementing financial controls that promote accountability and transparency. Clearly defined policies that share the responsibility of finances among more than one person is a good place to start. For example, churches should avoid having family members related by blood or marriage oversee the administration of tithes and offerings. Finally, if at all possible, the ministry’s board should have at least five people on it of which at least three are unrelated by blood or marriage.
2. Operational Inefficiency
Headlines depicting a bleak economy continue and are further affirmed by headlines reporting job reductions and layoffs among businesses of all sizes. While their pre—layoff strategy may be to save money or prevent filing bankruptcy, their post layoff strategy is to be more efficient. To do more with less income, fewer expenses, reduced workforce, limited resources and so on. Operational efficiency is just as important to most ministries and sometimes even more so.
Because a ministry’s income comes primarily from donations, it owes its givers a duty to use those donations productively. When ministries don’t, givers’ wallets and purses close up and dollars are donated elsewhere or worse. Givers decide to stop giving.
A ministry can minimize the risk of operational inefficiency by having a well crafted management structure that:
- Outlines its mission, objectives and expected results
- Clearly defines ministry roles and controls
- Promotes volunteerism and limits hiring staff to strategic and well defined ministry needs
- Facilitates communication among leaders and staff
- Handles ministry and personnel matters consistently
In an ever increasing litigious society, ministries and other non-profits are no longer immune to lawsuits. While litigation is typically not a direct threat to ministries, board members and executive staff are in highly visible positions of influence. The importance of that cannot be understated. Here are a few things your ministry can do to minimize this risk.
First, your ministry must carefully consider the structure of its board, executive staff and pastoral staff. As already noted, a policy that promotes accountability and transparency is a powerful tool. It is widely considered prudent to include accountability at all levels.
Second, ensure whenever possible there are no conflicts of interest between board and staff. For example, avoid having someone serve on the board of directors or other governing board if the prospective board member is related to someone on staff. If that can’t be avoided, then the board member should recuse himself from voting on matters that may impact staff, especially on matters of pay or promotion.
Third, remember to keep ministry funds separate from personal funds. This includes commingling of funds (depositing ministry funds into a personal account and visa versa) and using ministry funds for personal use (whether by cash, debit cards, or credit cards). While it’s true that it all belongs to God anyway, there is wisdom in staying above reproach.