By Brent Lacy

A pastor who accepts a call without understanding the church’s financial health is taking a significant risk. Financial stress is one of the leading causes of pastoral departure. A church that cannot sustain its pastoral position will eventually ask the pastor to leave, regardless of how well the ministry is going.

You have the right to ask for financial information before you accept a call. Any church that refuses to provide it is telling you something important.

What to Ask For

• Financial statements for the last three years (income statement and balance sheet)
• The current year budget and year-to-date actuals
• The church’s giving trend over the last five years
• Any outstanding debt (mortgage, loans, lines of credit)
• The church’s reserve fund or savings
• Whether the church has ever been unable to make payroll

What to Look For

• Giving trend: Is giving growing, flat, or declining? A church with declining giving for three consecutive years is in a difficult position.
• Dependence on a few large givers: If 20% of the congregation provides 80% of the giving, the church is vulnerable to the departure of any one of those givers.
• Debt load: A church with a mortgage payment that consumes 30% or more of its budget has limited flexibility for ministry and compensation.
• Reserve fund: A healthy church has 3-6 months of operating expenses in reserve. A church with no reserve is one crisis away from financial collapse.
• Compensation as a percentage of budget: If your compensation package represents more than 50% of the church’s budget, the church is financially fragile.

Having the Conversation

Ask for financial information after you have been identified as a finalist, not at the beginning of the process. Frame it as due diligence, not distrust: “I want to make sure I understand the church’s financial situation so I can serve you well. Could you share your financial statements from the last few years?”

If the committee is reluctant, explain why it matters: “I want to make sure the church can sustain this position long-term. Understanding the finances helps me assess that.”

A committee that is transparent about finances is a committee that will be transparent about other things. That transparency is a good sign.

The Conversation You Need to Have

Asking for financial information feels awkward. Most candidates avoid it because they do not want to seem mercenary or distrustful. But a church that is unwilling to share its financial information with a pastoral candidate is a church that is hiding something. Transparency about finances is a sign of a healthy governance culture. Opacity is a warning sign.

Frame the request as due diligence, not distrust: “I want to make sure I understand the church’s financial situation so I can serve you well. Could you share your financial statements from the last few years?” A committee that responds defensively to this reasonable request is telling you something important.

Reading the Financial Statements

You do not need to be an accountant to read a church’s financial statements. Here is what to look for:

Income statement (profit and loss): Is the church spending more than it takes in? A church that consistently spends more than it receives is in financial decline. Look at the trend over three years, not just the most recent year.

Balance sheet: What does the church own and what does it owe? A church with significant debt relative to its income is financially fragile. A church with reserves is financially stable.

Giving trend: Is total giving growing, flat, or declining? A church with three consecutive years of declining giving is in a difficult position regardless of what the current year looks like.

Compensation as a percentage of budget: If your compensation package represents more than 50% of the church’s total budget, the church is financially fragile. One bad year could eliminate your position.

Questions to Ask the Treasurer

• “Has the church ever been unable to make payroll or pay its bills on time?”
• “What is the church’s current reserve fund? How many months of operating expenses does it cover?”
• “Are there any outstanding loans, lines of credit, or financial obligations I should know about?”
• “What percentage of giving comes from the top five givers? What would happen if one of them left?”
• “Has the church had an independent financial review or audit in the last three years?”

When the Numbers Are Concerning

If the financial picture is concerning, you have three options: decline the call, negotiate conditions for accepting it, or accept it with clear eyes about the challenges ahead.

Declining is not failure. A church that cannot sustain its pastoral position will eventually ask you to leave, regardless of how well the ministry is going. It is better to know that before you accept the call than after you have moved your family.

If you choose to accept a financially challenging call, be explicit about it with the board: “I understand the financial situation. Here is what I believe needs to happen in the next 12-24 months for this to be sustainable. Are we aligned on that?” Get the answer before you start, not after.

Frequently Asked Questions

What is the main takeaway from this article?

The key principle from “How to Evaluate a Church’s Financial Health Before You Accept a Call” is that faithfulness in small things matters. God uses ordinary people in ordinary places to accomplish extraordinary things.

How can I apply these principles in my church?

Start with one idea that resonates with your context. Share it with your leadership team, pray about it, and take one small step this week.

What if our church is too small for these ideas?

Size is not the determining factor. Faithfulness is. A small church that is intentional about ministry can have an impact far beyond its numbers.

Where can I learn more about this topic?

Explore the resources on MinistryPlace.net, consult with denominational leaders, and connect with other pastors navigating similar challenges.

What is the first step we should take?

Pray together as a leadership team. Ask God to show you the next faithful step, then take it.

Sources

1. Replant Bootcamp, “Lessons from Effective Interim Pastors”
2. Alban Institute, “Rethinking Transitional Ministry”
3. South Carolina Baptist Convention, “Transitional Pastor Manual”
4. Liberty University, “Effective Transitional Ministry Plan”

Frequently Asked Questions

How do we handle this with very limited funds?

Transparency and consistency matter more than the amount. Even small churches can create clear financial frameworks. Start with the basics: a simple budget, clear policies, and open communication.

What if our congregation disagrees with these recommendations?

Financial decisions in small churches are inherently relational. Present the reasoning behind recommendations, listen to concerns, and seek consensus where possible.

Where can we get help with church financial planning?

MinistryPlace offers several resources on church financial management. Your state or denomination may also have financial consultants who specialize in small church contexts.