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While the heart of every pastor is to preach messages inspired by the Word of God and minister to their congregation, there are real 21st Century risks when running a church that ministers, elders, and church leaders need to be aware of and proactively combat. This helps protect the church itself, the members, the staff, and the volunteers. These areas of risk can be broken down into the broader categories of: People, Financial, Property, Operational, and Emerging. Let’s dive into each of these a bit deeper.

We do not share these risks because we want to foster a spirit of fear. God is ultimately in control and we trust in him. He places a huge burden of responsibility on those who are doing the shepherding of his people, though, and it is important to consider all these different responsibilities put on a pastor and church leaders.

1. People Risks

A. Childcare, Nursery, and Youth Ministry Safety

Risks surrounding people are of utmost importance. Every church should be striving for the safety of every individual under their roof. First and foremost should be the risks associated with children. Every church should:

• Ensure that children left in the care of church staff and volunteers are collected by an authorized parent or guardian only
• Ensure all workers and volunteers have undergone background checks and proper training including updates to background checks and training every 1-2 years
• Require two non-related adults in the room with children and youth at all times
• No adult should go into the restroom with minors
• Report any suspicion of abuse to the proper authorities. Handling reported abuse “in house” is not enough especially when it involves minors!

B. Employment/Employee Policies

In addition to protecting our children, any church that has staff members face a different set of risks. Church leaders need to make sure they have policies and procedures in place that minimize risks. And of course it is not enough just to have the policies in place – they must make sure they are followed. Things to consider include:

• Proper hiring and termination procedures. This is especially important when looking to hire a family member related to existing church staff
• Correct employee classification (employee vs contractor – this is a common issue that a lot of churches get wrong!)
• Harassment and discrimination policies including how to handle complaints
• Performance review procedures that are practiced consistently across all staff members

C. Pastoral Counseling

If any of the pastors on staff offer counseling, there are some key risk considerations there including:

• What boundaries does the pastor have in his/her counseling relationships?
• Does the pastor understand their mandatory reporting obligations?
• Will the pastor maintain a counselor/client privacy policy and is that clearly communicated with those being counseled?
• Is there a policy for handling any misconduct allegations?

D. Health and Medical

A church is made up of their people and unfortunately sometimes our bodies face ailments or emergencies. Your church should have in place:

• Proper training for volunteers to handle medical emergencies
• Procedures for identifying children with allergies and handling exposure to allergens
• Staff and volunteers who are CPR certified
• An AED on site with someone who is trained in using it on site during high-traffic hours like Sunday services

These lists just scratch the surface! But for now, let’s consider some of the financial risks that churches face and how they can be prepared to prevent and combat them.

2. Financial Risks

At Bellwether, this is our main area of focus and we have been writing about this topic for years. We could not possibly include everything in this post so we would encourage you to check out our other blog posts and our book Preventing Fraud in Church Accounting for more information. However, let’s go over some of the biggest area of concern.

The number one deterrent of fraud is the fear of getting caught. Having the right policies and procedures in place paired with accountability will go a long way in protecting your church.

Fraud and Embezzlement

While we could write a whole book about this (oh wait, we did!), here are some of the steps you can take to prevent fraud and embezzlement:

• Segregation of duties (ie. the same person counting the Sunday offerings is not also reconciling the bank accounts)
• Have at least two signers for checks over $500
• Mandatory vacations especially for anyone in charge of handling the financials
• Keep the financials on a web-based accounting software with multiple eyes on it
• Monthly bank account and credit card reconciliations that include attached receipts/invoices to each expenditure
• Conduct regular surprise financial check ins (we have instructions for doing that in our book)
• Knowing payroll and tax procedures and checking to see that payments are being made
• Having and sticking to an operating budget

A lot of churches fall into the trap of believing that “It can’t happen here!” but the truth is that around 1/3 of American churches are victims to fraud and embezzlement. It CAN happen at your church and if it does, having a plan in place to call an attorney and prosecute when possible is extremely important for both your church and to protect future churches from a repeat offender.

Even if your church is on the smaller side, it is still critical to have and maintain excellent financial records and separate duties as much as is possible. Fraud can happen even if the church budget is small. You will need to rely on volunteers to keep the recordkeeper accountable. Check out our book Faithful Finances for an easy way to keep financial records and the book also includes guidelines for conducting a surprise financial review by a group of volunteers. Remember: the fear of getting caught is the biggest deterrent. Knowing their work will be regularly reviewed and audited goes a long way in protecting the church’s resources.

Churches that have some wiggle room in their budget may want to consider outsourcing part or all of their bookkeeping and payroll to a professional. This could be an in-house staff member but hiring staff can be expensive and requires employee training. Outsourcing your bookkeeping to a specialized firm can save money and help get things going right away because the bookkeeping firm is already working with dozens of churches like yours. Consider contacting us if you are interested in pursuing bookkeeping and payroll help for your church. It’s all we do! And we will customize our services to each client so you are only paying for what you need.

This is part 1 in this series. We will cover property, operational, and emerging risks in the next post so stay tuned for part 2!