Episode 79: “A Transformative Approach to Church Finances” featuring Lovett H. Weems Jr. and Ann A. Michel

Leading Ideas Talks
Episode 79: “A Transformative Approach to Church Finances” featuring Lovett H. Weems Jr. and Ann A. Michel

How can church leaders approach stewardship and finance in ways that inspire generosity and encourage the sound use of church resources? Lovett H. Weems Jr. and Ann A. Michel share practical strategies and discuss how our belief structures around generosity, stewardship, and abundance speak to these challenges.

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How can church leaders approach stewardship and finance in ways that inspire generosity and encourage the sound use of church resources? Lovett H. Weems Jr. and Ann A. Michel share practical strategies and discuss how our belief structures around generosity, stewardship, and abundance speak to these challenges.

Doug Powe: Welcome to Leading Ideas Talks, a podcast featuring thought leaders and innovative practitioners. I am Douglas Powe, director of the Lewis Center and your host for this talk. Joining me is Dr. Lovett Weems, former director of the Lewis Center and consultant for the Lewis Center, and Dr. Ann Michel, the associate director of the Lewis Center. They have written a terrific book called Generosity, Stewardship and Abundance: A Transformational Guide to Church Finance. Our focus for this podcast is church finances. Ann, Lovett, welcome to the show. It’s great to have both of you here. Lovett, a lot of books have already been published on stewardship and finances. What’s different about your approach?

Lovett Weems: Well, I don’t know if it’s different, so much as it tries to bring together in one place a lot of resources. Thousands of pastors and church lay officials, even sometimes financial staff of churches, do their work every day, many times not having been prepared specifically in the areas of stewardship and finance. They may deal with their personal stewardship and finances. Some may have business experience. But many have simply not had an opportunity to do sustained study of the theological dimensions of stewardship and church finances and or look into the research on best practices regarding stewardship and church finances. So we tried to take the ideas that are most needed and put them together so that persons who are busy and cannot dedicate a lot of extra time to this study can have in one place ideas they need when they need them.

Ann Michel: I agree that one of the things we’re trying to accomplish in this book is to pull together into one book information across a wide range of subjects related to stewardship and finance. But I think it’s more than just one-stop shopping. I think we also are trying to really integrate and present — whether we’re talking about personal stewardship or congregational stewardship, whether we’re talking about ministries of generosity or budgeting — an understanding that all of these issues are part of a comprehensive theological framework and they all tie together and need to be considered as part of the same system of ideas and theology.

Doug Powe: Thank you both. Let me follow up briefly. You talked about generosity. And generosity is in the title and actually is the first word. A lot of people don’t think of generosity and finances together when it comes to the church. Why the term generosity?

Ann Michel: So, I have really come to understand that generosity is the starting point of how we understand our relationship to resources and really our relationship to God. I sometimes even say to people “Stop talking about stewardship.” Because I think stewardship is a harder concept for people to understand. I think most people more easily understand what it means to be generous and how they have been influenced by God’s generosity. And so generosity is one of three foundational doctrines related to money that we emphasize in the book. The first being generosity, stewardship and abundance, which are the three terms in the title. But these are our three core beliefs that impact how individual Christians and how congregations live in relation to money and use their resources. And so this book is built around a theological framework that suggests that these beliefs allow us to think in a different way, a new way about how we as individuals and also congregations are going to use the resources that God has entrusted to us.

Doug Powe: Lovett, would you like to say a little bit more, particularly related to the concept of commonwealth?

Lovett Weems: Well, one understanding that has come to me in our research was thinking of every church asset, every dollar that’s given, all of its property, all of its facilities becoming a part of the “commonwealth” of a community of faith, the congregation. But it’s not ours to use as we see fit. Everything the church receives and possesses is intended for and can be used for only one purpose, and that is to fulfill the mission that God has for the congregation. So, as Ann pointed out, the language we use is very important. And so sometimes we will use church language or conventional language when we need to find those concepts that tie into our biblical and theological heritage, that can communicate at a deeper level. That we are about something other than simply paying the bills for the church.

Ann Michel: If I could just follow on that. I think it’s very easy for churches to just fall into thinking about their financial issues in the exact same way that the world thinks about them. It’s about paying the bills. For people coming to church, the money they give to the church is just the price of admission. And we think about the use of money in the church in exactly the same terms as if we were going to a movie theater. And one of the great gifts of the Christian faith is it invites us to think very differently about money and possessions. And that goes way beyond just how the church pays the bills. It’s about how we teach people to live in the world. And so it’s a great calling and a great gift that goes far beyond just the church sustaining itself. I think it’s one of the ways that God calls the church to be involved in the transformation of the world.

Doug Powe: Let me follow up a little bit more. I like this idea of commonwealth in a way that you all have both expanded on that language. But I’m thinking many congregations and people become really possessive. I think one of the challenges is folk feel like they have ownership over the church, over the finances, and over the things that the church does related to finances. Can you all share sort of theologically how you can help people make that shift? Certainly, it’s important to be good stewards, but this idea of being possessive is not really biblical or theological in a way that you’re framing it.

Ann Michel: I think it does go back to the concept of stewardship. But I think it’s the way we understand the word steward. I think sometimes we think if we’re good stewards, we’re just going to be good managers. And that may even reinforce our sense of ownership or possession. But actually, to be a steward is to acknowledge that we are not the owner, that God is the owner, and that we are only the stewards of the things that we think that we possess. And so if we really adopt the mindset of a steward and the understanding of biblical stewardship, it means that we set aside our sense of ownership and possession and realize that everything that we have, everything that our congregations have, have just been entrusted to us to be used not for our own purposes, but for God’s purposes. And the idea of commonwealth is really rooted in the same idea, I think, wouldn’t you say, Lovett.

Lovett Weems: Yes. And also to build on those comments about being a steward, from the beginning of the church, people were selected to be responsible for various dimensions of the outreach of the church, including the handling of the money. But this assignment was never meant as special prerogative. The stewardship is done on behalf of the entire Body. And It is not something that is owned by any segment, but no matter what their office may be in the church. So we are not the owner and our accountability is not just to ourselves and to God, but we have an accountability to the entire community of faith that these funds be used to advance the mission, and that we are transparent about that, and communicate generously and not grudgingly with the congregation.

Doug Powe: When most church leaders think about their congregation’s finances, they think of the operating budget, which, of course, you all cover extensively in the book. But is there one best practice that all churches should follow regarding operating income and expenses?

Lovett Weems: Well, whatever the church, whatever the size, whatever denomination, one key principle for the operating budget is the operating budget needs to cover the recurring expenses for the given year. And it’s to be funded by recurring and predictable income. One of the biggest mistakes and one that saps so much of the energy of the church throughout the year is when churches do not discipline themselves to fund their current operations from recurring and predictable income. When it’s hard to balance the budget, then we start putting on the income side our projections. “Maybe this will happen.” “We’re going to ask people to give more.” Well, there’s a place for all of those things to happen. But you shouldn’t be basing someone’s salary or expenses you know you’ll have every month based on those things. If the income is far more than expected, there are many good ways for that to be used and you will have lifted your predictable baseline for the coming year. So trying to keep an operating budget those expenses that will be used in that year, but limiting the income to the predictable and recovering as best that judgment can be made.

Doug Powe: Ann, let me ask a different question to you. You identify the problem of a “conspiracy of silence” around money when it comes to churches. Why is that and what can be done about it?

Ann Michel: So, I think one of the reasons why congregations aren’t able to do as good a job as they could in inspiring people toward generosity and one reason so many congregations have a hard time really coming to grips with their own financial reality is because money is often a very taboo subject within churches. People often use the term “conspiracy of silence” to talk about that. Pastors don’t want to talk about money. But that’s okay because people don’t want to hear about it either. And so everybody just agrees that nobody’s going to talk about money in church. And I think that reality is so dominant in many congregations that people actually think it’s part of the religion. Nobody talks about money in church so It must be against the rules of God to talk about money. In fact, just the opposite is true. If you look at Scripture, Scripture talks about money more than just about any other subject. Certainly, Jesus talked about money more than almost any other subject. And so this idea that it’s not right or that it’s impolite to talk about money, it’s not rooted in our faith. It’s rooted in our culture where people don’t like to talk about money because money is equated with power. And so people are very skittish about it. And I think that cultural attitude, that cultural aversion to talking about money, or thinking about money only in terms of power, gets imported from our culture into the churches. And so we have to figure out ways to get beyond that. Because our faith does call us to talk about money and how we live in relation to money and possessions, how we use our money properly, how congregations use money properly. That’s where the rubber meets the road in terms of discipleship, I think. And so it can be very hard if you’re in a culture where it’s really buttoned up to begin to loosen that up. But I think leaders need to look for ways to begin to interject some conversation and vocabulary around money and giving. I think this is an area where leaders, pastors and other leaders, can model the way by being a bit more open and transparent talking about their own giving. Testimonies can be very valuable to begin having people talk about how they live in relation to money and possessions, how they decide what to give to the church. These are things that people consider very private. But we need to find ways to start to open up that conversation a little bit so that we can be more accountable. We were talking just a little while ago about the idea of accountability. And accountability is part of Christian community. And if we can’t talk honestly about these issues, then we really can’t get there.

Doug Powe: Let me follow up. Sometimes you hear in congregations that “All they do is ask for money.” But what I hear you saying is that we have to not just talk about money when we need to ask for it, but it’s really a discipline of thinking about stewardship throughout the year. And so it seems that we get trapped. That people almost think that we talk about it too much. But the reality is we aren’t talking about it too much. The problem is we’re only talking about money when we are asking for it, when we need something better.

Ann Michel: I’m so glad you said that, because I think that’s right. I think one of the other reasons why people are reluctant to talk about money in church, why some pastors are reluctant to preach about it, is because of the perception that the church is always asking for money. The church is after people’s money. And then that kind of shuts things down. Because people won’t listen to that conversation. They think they’re just being asked for money. And so talking about money when you’re not asking for it begins to normalize that and allows people to listen in a different way. People expect to have a sermon about money on commitment Sunday, so finding other ways, other times and places to talk about money, not in the context of asking, but in the context of discipleship.

Lovett Weems: In the book, we talk about two principles for talking about money. One is, you never talk about people’s money apart from their discipleship. You always link the two because that’s what’s most important. And the second principle is, you never talk about the church’s money apart from its mission. If you cannot connect something for which you need money, for which you’re spending money to the church’s mission, then you don’t need it. So these two can serve as a kind of a discipline. It keep us from turning our talk of money into a purely utilitarian enterprise.

Doug Powe: Let me stick with you and stick with this idea of mission. You talked about the operating budget a little while ago. But we also need to talk about capital needs. So can you share a little bit about how capital needs fit into the picture, particularly as it relates to mission?

Lovett Weems: Well, for many churches, capital needs don’t fit in very well because there is so much pressure to pay operating expenses. Little attention is given to money needed for capital renewal and replacement. What happens then is a major piece of equipment goes down. A roof has to be replaced. And there are no funds for that. There are no funds in the operating budget because the operating budget is for things that have a life of a year. But when we think of capital needs, we’re thinking about those things that have a life of more than a year. So cleaning the fellowship hall is an operating expense. But refurbishing it is a capital expense. So when one of those emergencies comes along, churches are caught. They either have to draw money from other things in the operating budget, or borrow money, or do special fundraising. So if you’re not prepared to meet capital needs, the first thing to do is to try to identify some funding streams that can go into a fund that can be available at least to help with those capital needs. I said earlier that the operating budget ought to depend on recurring and predictable income. Well, there are other kinds of income. It may be a bequest that comes from someone through an estate. It might be a one-time sale of property. There may be something else that comes along. If you have a fund capital fund for this money, even having this fund may encourage some people to put money in it. Sometimes it’s called the building fund. Then once you have some sources of funding, then you’re in better shape, not only to meet emergencies but to start planning ahead. Looking ahead, five to 10 years, what are things that we will need to do? And then you may develop a plan. What kind of cycle will we use to make sure that everything is painted and do so much every year. Or what’s our technology replacement plan. Or what roofs need to be replaced? Things like that.

Doug Powe: So Lovett, there’s another revenue stream that some congregations have and others do not, and that’s an endowment. So you’ve talked about operating, you talked about capital. Can you share a little bit about endowments. For those who have endowments, but I think more importantly, for congregations that don’t have them, is there a way they can even think about starting one, even though they may be struggling financially?

Lovett Weems: Well, there actually is a debate about endowments. Do they help or hurt congregations? Well, they help — if they’re handled properly and if you have good policies. Those include what’s the purpose of the endowment? The purpose of the environment should be toward the future. What are those things that can make us stronger to accomplish our mission? Not just how do we preserve what we have? The second policy would be the investment policy. Many times the church feels it’s got to put the money where there’s no chance of it losing any value. But these funds, if it’s true endowment, these are permanent funds that should be kept over a long period of time. So you’re assuming that one hundred years from now you’ll still have the funds. So you have some room to work in, to have a mix of equities and cash holdings so that you can grow certainly by the rate of inflation. But you’re really wanting for this to grow at the rate of inflation and more, so you can replace the inflation rate in order to maintain the value of the endowment, but then have a steady stream of income. So that’s the third thing. What’s the spending rate? You want to conservative spending rate. So let’s say that if you were assuming that your total return over a five to eight year period would be 6%. That’s interest, dividends and capital appreciation. And you assume a 2% inflation rate, then you would properly have a 4% spending rate so that you’re able to spend that money on the purpose of the endowment, replenish the endowment by the rate of inflation simply to hold its value, and then you’ll be in better shape each year that follows. Now an endowment also relates to stewardship, because different kinds of giving tap into different types resources. Ann may want to say something about that.

Ann Michel: Just as it can be helpful for a congregation to think about their long-term financial needs, the same is really true for an individual. If an individual is living week-to-week, month-to-month and not thinking about their long-term needs, that’s not good stewardship. And so individuals need to think about their monthly budget. They need to think about their longer- term financial needs. And they need to think about their lifetime assets as well. What happens to the things they own when they die? Part of our culture generosity and part of responsible stewardship is thinking about how we can sustain the legacy of our faith beyond our own lifetime through bequests or gifts. Often those go to an endowment. And the advantage is that investment of someone’s lifetime assets in the church, that gift of someone’s lifetime assets to the church, can have a long-term impact. It can be a lasting witness or legacy to that person’s faith. And so having an endowment is a way to encourage people to make lasting gifts of lifetime assets, both as an expression of their own personal stewardship, but as a way of sustaining the future ministry of the church, as well.

Doug Powe: Lovett, Ann, as we get ready to bring this to a close, I’m curious. If your book really accomplishes what you hope it will, what will be different in churches?

Ann Michel: I think a lot of people look at issues of stewardship and giving and church finance in terms of institutional thriving. And we all understand that these things are essential to the health of our institutions. So, I think the first thing would be that our institutions would be healthier. But I think it goes far beyond that. I don’t think that God has given us these tools and instruments merely to sustain our institutions. I think that the Christian belief structure with regard to generosity, stewardship and abundance is a gift to the world. And I think if we have healthy churches, it’s going to be to the benefit of the world. I think this is a way that the church can change the world by becoming more generous and by using resources better and teaching other people to use their resources better. It’s a really important calling. And so I think we need to think about it in a bigger way.

Lovett Weems: My hope would be that pastors and church financial leaders have a basis for making their decisions other than simply how we currently do things or personal preferences, that there is a way to put these decisions in a larger context and to see their roles as making sure that the finances of the church are handled in such a way as to be consistent with what they’re saying about the church, what their mission or mission statement says, and who they really are.

Doug Powe: Once again, the book is Generosity, Stewardship and Abundance: A Transformational Guide to Church Finance. Ann, Lovett, thank you both. I think that this has been extremely helpful, and I know our readers will be looking forward to reading the book.

Announcer: On the next Leading Ideas Talks, Paul Cho shares how individuals and communities may reconsider trauma and its impact for positive or negative transformation through the lens of the Old Testament.

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Generosity, Stewardship, and Abundance book coverRelated Resources


About Author

Dr. Lovett H. Weems, Jr.

Lovett H. Weems Jr. is senior consultant at the Lewis Center for Church Leadership, distinguished professor of church leadership emeritus at Wesley Theological Seminary, and author of several books on leadership.

Ann A. Michel has served on the staff of the Lewis Center for Church Leadership since early 2005. She currently serves as a Senior Consultant and is co-editor of Leading Ideas e-newsletter. She also teaches at Wesley Theological Seminary in the areas of stewardship and leadership. She is the co-author with Lovett H. Weems Jr. of Generosity, Stewardship, and Abundance: A Transformational Guide to Church Finance (Rowman & Littlefield, 2021) available at Cokesbury and Amazon. She is also the author of Synergy: A Leadership Guide for Church Staff and Volunteers (Abingdon, 2017), available at Cokesbury and Amazon.

Rev. Dr. F. Douglas Powe, Jr.

F. Douglas Powe, Jr., is director of the Lewis Center for Church Leadership and holds the James C. Logan Chair in Evangelism (an E. Stanley Jones Professorship) at Wesley Theological Seminary in Washington, DC. He is also co-editor with Jessica Anschutz of Healing Fractured Communities (Palmetto, 2024) and coauthor with Lovett H. Weems Jr. of Sustaining While Disrupting: The Challenge of Congregational Innovation (Fortress, 2022). His previous books include The Adept Church: Navigating Between a Rock and a Hard Place (Abingdon Press, 2020); Not Safe for Church: Ten Commandments for Reaching New Generations; New Wine, New Wineskins: How African American Congregations Can Reach New Generations; Transforming Evangelism: The Wesleyan Way of Sharing Faith; and Transforming Community: The Wesleyan Way to Missional Congregations.