Church Business Management: How & Why To Run Your Church Like A Business
In a very practical way, your church's management practices represent a ceiling for your growth and progress. For the pastor who wants to improve or supplement their skills with top-ranked church management systems, there are a dizzying number of possibilities. (And, if your budget is a lot smaller (or zero), there are an equal number of free church management software tools.)
That being said, as a ministry leader, I rarely considered the work I did as 'management.' Today, though, I have a much clearer understanding. As I spend time reflecting on the meetings, generating church financial reports, managing church volunteers, setting up and organizing church conferences, the standard operating procedures, etc. I see had a ton of business administration skills I didn’t even know I had!
The issue, though, was this: I didn’t think of myself or my church leaders as business management material.
I want to help church leadership shift your thinking about church business management. At the end of the day, whether we like it or not, running a church or nonprofit is still running a business, just with some tweaks here and there.
Let’s start by defining all of our terms and then start getting you to think about church management from a different point of view so you can lead your local church effectively.
I’ll cover:
- What Is Church Business Management?
- Is A Church A Business Or An Organization?
- What Are The Advantages Of A Church Being A Business?
- Conducting Church Business
What Is Church Business Management?
What are we talking about when we discuss church business management? It’s a fair question.
For the purposes of this article, we are going to define church business management as overseeing the organizational needs, financial management, and administrative side of the local church as a legal nonprofit organization. (NOTE: church record keeping is a critical part of long-term success. Don't neglect this!)
This isn’t the most fun thing—it’s not why you spent time working on a degree program earning credit hours just so you could think about a church management system, but it is a part of the job description. So let’s practice good church stewardship and manage the business infrastructure of the church well!
If you are in full-time church leadership, then this will affect you differently than those who are bi-vocational or part-time because you will have higher expectations to run the church organization than those who split their time. However, it is a critical skill set for all lead pastors to develop.
What Is Church Management?
Church management, at the level we are talking about, deals with the whole of the church as a religious organization. From pastoral care to preaching to budgeting and human resource management skills, all of this is part of church management.
While there is some overlap between church administration and church management, these two typically fall into these categories: religious and business. A local church organization is expected to perform both well, but it is the role of the lead pastor to focus on a whole church business management approach that encompasses both.
One of the single best tools you can add to your church management toolbox is (wait for it...) church management software. My team and I ranked and evaluated the very best church management software tools.
Ready to explore church management software? These articles will help:
- Global market for church management software
- Must-have features of church management software
- Benefits of church management software
- Pricing overview for church management software
What Is Church Administration?
Now, church administration focuses more on mobilizing the church as a religious organization from the standpoint of financial management and human resource management. The goal is the same as with church management, but the administrative side of things applies more to managing the business efforts and real-time needs of the church as a nonprofit business.
This is where many pastors begin to feel ill-equipped. Managing a business or an organization isn’t what you signed up for, right? Well, let’s discuss this.
Read more about how to set up church administration here.
Is A Church A Business Or An Organization?
The answer to this question lies within an unusual space: tax code! If we peer into the definitions of a 501(c)(3) tax code for a nonprofit organization under “religious” reasons, then we see the language of “organization” a lot.
However, there is also language that refers to “business income” for money that comes in outside of donations (often in the form of tithes and offerings). You can also see that, in reference to employees, they must be given pay based on fair market value. This means they must be paid appropriately based on an equivalent role outside of the nonprofit status.
This all means that we can see church as both a business and an organization! Yet, many lead pastors don’t shift their thinking to that of church business management. If a lead pastor can make that mental shift, though, there are many advantages that come into play.
What Are The Advantages Of A Church Being A Business?
If, at the end of the day, you are running your nonprofit organization, the local church, then you will need to make sure that all of the activities your church engages in are aligned with the religious organization’s initial purpose.
Ideally, these will be rooted in sharing the gospel of Jesus Christ, helping those in need, and equipping others to do the same.
As a religious organization, it can be easy to give people every grace and opportunity to perform their duties admirably and that would be fulfilling your role in church management but not church administration. Although, it would align with the purpose of the church, right?
Let’s look at it from another perspective, though.
What if you had a staff member who didn’t perform the duties outlined in their job description but were seen as exemplary members of the congregation? You might be hesitant to reprimand or even fire this staff member.
From a church business management perspective, though, you are well within your rights to take action. In fact, from a purely business perspective there is a responsibility for you to fiercely defend the purpose of your church as a faith-based nonprofit.
Living into your role as someone overseeing church business management puts you in the place of defender of the congregation and the mission of your local church! This, combined with the responsibility to also share the love of Jesus, allows you to take stances you might otherwise be too nervous to take.
With this in mind, how can we best conduct the business of the church?
Conducting Church Business
Activities like fundraising, outreach, and pastoral care are all important parts of operating a church well, but they aren’t managing the church as a business.
These church business activities tend to look like the parts that don’t seem like as much fun:
- Creating business plans
- Organizing church business meetings
- Casting a mission and vision in alignment with the original purpose of the nonprofit organization
- Human resource management
- Financial management (aided by excellent church accounting software)
- Creating a church management program
These are the tasks that tend to suck the life and energy out of many pastoral leaders, yet they are equally important to make sure the church organization continues on for years to come!
Directly relating your work within the church business management portion of your role to the life-giving gospel of Jesus Christ will go a long way to helping turn away this negative mindset. Budgeting so that your church can be the hands and feet of Jesus in your community is just as important as going and serving the orphans and widows directly.
With this in mind, it’s time to discuss these specific details: church business plans and church business meetings.
Church Business Plans
If your local church doesn’t already have a church business plan set up, then one of your greatest tasks in your church business management role will be to get working on one. (NOTE: this should include notes about your church property management strategy.)
A clearly defined, actionable church business plan will help you and your congregation consistently work towards goals and tasks that will further the mission of your church. Whether it is investing more time into fundraising for a specific opportunity, improvement, or staff hire or assessing what it takes to create an online program for a specific ministry, the business plan will keep you on track.
Don’t think of the church business plan as some rigid outline for what you have to do, but as a document to keep the church leadership accountable to what your congregation believes is vital to accomplishing your mission and vision as a church.
Then, comes the onslaught of meetings you might find yourself involved in.
Church Business Meetings
Church business will ultimately require more than a few meetings. Again, these are important to keep your mission and vision in sight and on track at all times, but they can be overwhelming.
Having a simple, efficient church business meeting agenda can help streamline these meetings. This will help them not feel as daunting and keep everyone focused and feeling they have been heard and listened to.
Recognize that many of your church leadership are likely volunteers taking plenty of time out of their life for these meetings. So treat them with the respect they deserve and treat each church business meeting as critical to the mission and vision of the church.
Church Business Management Is Missional
Thinking of church business management as missional work for the body of Christ and your local congregation can go a long way to alleviating any fears and doubts you might have about running the church like a business.
At the end of the day, operating a church like a business is actually a critical piece of fulfilling the mission of the local church! Embrace the business side of church management, become the fierce defender and protector of your church’s finances, human resources, physical resources, and enthusiasm to share the love of Jesus Christ with the world!
I can only imagine how much more successful my ministry would have been with this focus on church business management. If I'd been equipped with one of these excellent church software tools? I'd have saved myself a ton of headaches and frustration!
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If you want to keep learning and growing, then please keep exploring and studying about the intersection of church management and business management at The Lead Pastor blog! If you're planning a new church, read more about how to start a church here.
