As World War II came to a close, 76% of U.S. adults were members of a church, synagogue, or mosque, according to Gallup. But by 2020, membership in America’s congregations fell to 47%. Americans who do not identify with any religion grew from 8% in 1998-2000 to 21% from 2019-2021. Church membership is down 15% in the past decade among Millennials. As religious affiliation levels decline, funding may become more challenging for faith-based organizations.
Despite the overall trends, many vibrant organizations are growing and finding new ways to welcome younger people into faith. One thing will never change: Congregations and faith-based ministries are working hard to make an impact in their communities and the wider world. Church financial leaders know every dollar can help change a life. That is why it is so important to be able to demonstrate good stewardship over all financial gifts and offerings.
In this article, we will review the current operating environment for congregations and faith ministries. We will also examine the top challenges and goals of today’s church and congregation financial executives. Finally, we will explore the benefits provided by cloud church accounting software.
Gifts and offerings are precious in this challenging economy
According to Giving USA, nearly $136 billion charitable dollars flowed into religious organizations in 2021. By far the largest recipient of charitable funding, congregations and faith ministries received 27% of all U.S. charitable contributions for the year. This represented 5.3% cumulative growth in funding from 2019 to 2021; however, when adjusted for inflation, dollars donated were fairly flat, rising by 0.7% between 2019 and 2021.
Churches and faith ministries face several economic headwinds. There is a generational shift toward lower church attendance and membership among younger people. At the same time, many lifelong, faithful givers are now living in retirement, on a much more fixed income. Inflation is making everything more expensive, for faith organizations and members of their congregations. In this economic environment, it is even more essential to have visibility into incoming funds and outgoing expenses.
Top challenges and goals of faith-based finance leaders
As faith-based organizations grow in terms of size, members, locations, programs, and ministries, they face some common struggles:
- Need to become more data-driven, rather than gut-driven, in strategic decision-making
- Lack of real-time visibility into key metrics and results
- Manual, time-consuming reporting that often delivers stale information
- Inefficiencies and errors caused by keeping important information in multiple systems that do not talk to one another
- Manual consolidation of multiple entities (campuses/congregations, schools, missions, foundations, social services, partnership projects)
Many church and congregation finance leaders are turning to Sage Intacct’s cloud church accounting software solution to find better ways to overcome challenges and support future growth. Church accounting software can help organizations achieve their top goals:
- Automated, continuous consolidation across multiple entities for a top-down view
- Real-time visibility and insights for proactive management and stewardship
- Ability to monitor cash, revenue, expenses, outcomes and more through roles-tailored visual dashboards
- Better use of staff resources through efficient workflows and integrations
- Faster point-and-click reporting and the ability to drill down into details
- Nonprofit-specific functionality including fund accounting and automated outcomes metrics
“Initially, we didn’t think we would find a solution that could work for all our entities, because they’re each so different. But, when we found Sage Intacct, we knew the whole organization needed to make the switch. Sage Intacct has everything we were looking for–the ability to do real-time consolidations, robust reporting with drill-down capabilities, a much more flexible general ledger, strong internal controls with various levels of user access, and an intuitive interface for people of all technical abilities.”Laurie Downey | Controller | Roman Catholic Diocese of Portland
Know more, faster about the financials that drive your ministry
All faith-based organizations try to be careful stewards, but the wrong accounting technology can hamper reporting and other accountability and compliance tasks. Growing organizations usually track transactions and outcomes by multiple categories, such as fund, location, program, ministry, and project. And they manage their operations across multiple solutions, including membership management, finance, online giving, tuition systems, and more.
You need to know more about your financials, and you need to be able to get the information you need more quickly. You need a solution that allows you to filter, slice, and dice your data for multiple reports, locations, and stakeholders.
Sage Intacct delivers the visibility, automation, and agility faith organizations need in order to grow mission impact in a complex and dynamic environment. Specializing in helping congregations with multiple locations, ministries, programs, and funds, Sage Intacct streamlines fund, project, entity, and donor accounting, while delivering real-time visibility into the metrics that matter. It automates continuous consolidations and delivers real-time roles-based dashboards and reports from which you can quickly drill down into more granular detail.
“With our previous system, our church directors would receive a financial update each month, but not for two weeks after each close cycle. By comparison, Sage Intacct gives us a modern system with all the financial information we need immediately at our fingertips.”Stacie Porter | Director of Finance | Grace Fellowship Church
Automate and streamline workflows for faster month-end closes
A cloud church accounting software solution can automate and streamline processes including procurement, month-end close, consolidations, allocations, grant management, and reporting. Boost finance staff productivity with automated reporting, dashboards, and approvals. Empower your staff to spend less time on reporting and to lean more strategically into your mission.
Many faith-based organizations using Sage Intacct have cut days or even weeks from their month-end close, due to continuous consolidations, a shared dimensional chart of accounts, automated release of restrictions, and other time-saving features.
“The biggest improvement we saw was the speed and accuracy of our monthly financial close, which now takes half the time it did with QuickBooks and is completely trustworthy.”Reggie Alexis | Controller | Potential Church
Become more strategic in your analysis and decision-making
Growing faith-based organizations share something in common: Their leadership teams are proactive, data-driven, and forward-thinking. But that kind of leadership cannot happen if delayed access to data and results leaves you behind the curve. By moving to the cloud, you will unlock the power of real-time visibility and deliver insights on-demand to organizational leaders.
Get consolidated views of cash trends and revenue and expenses by location. Dig into results and metrics like average giving per member, volunteer hours per program, average tuition per student, and more. With timely analysis, your leaders can shepherd your organization to greater mission impact.
Support growth while keeping costs in check
Staff salaries and benefits comprise a large expense for most faith-based organizations. Rapid growth in congregations often means a flurry of hiring so staff can keep up with services and administration. But if you have automated your financial processes, existing staff can often support more growth while maintaining lower labor costs.
“Most of the churches our size have five or more full-time finance staff. With the efficiencies we’ve gained through Sage Intacct, we’ve kept our staff size low even as we doubled in size. By using the system to manage all our day-to-day bookkeeping, we’re saving $85,000 or more a year in salaries and benefits, while doing deeper analysis and reporting.”Aaron Goin | Chief Financial Officer | Faith Promise Church
Gain greater efficiency and visibility through best-in-class integrations
Keep your organization agile with an open, configurable, true cloud solution that allows you to easily share data and connect multiple solutions. By choosing a church accounting solution with good integration features, your team will not need to rekey data from other systems into your accounting system or struggle with data export/import.
For example, Sage Intacct’s open integration API (Application Programming Interface) helps third-party vendors develop pre-built integrations to Sage Intacct. This means congregations and faith ministries can connect Sage Intacct easily to other critical systems such as membership, online giving, tuition, grant, timesheets, payroll, and finance solutions. The Sage Intacct Marketplace offers a variety of the most innovative, best-in-class cloud solutions—all built to integrate with Sage Intacct from day one.
It is a challenging economic environment for churches, congregations, and faith-based ministries, but communities need these organizations even more in challenging times. There will be many opportunities for growth, and a cloud church accounting solution should be part of your technology strategy for growth and stewardship. Having more robust and real-time visibility into financial and outcomes data will help you improve strategic visioning and decision-making.
Highly efficient workflows and automated reporting and dashboards will help your organization become more responsive and able to do more with less staff. Download the Benefits of Cloud Accounting Software for Congregations and Faith Ministries e-book to learn the top five technology frustrations church finance leaders are facing today and five reasons a cloud-based church accounting solution will help.
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