Church Finances and Fundraising

Giving to the Local Church

Giving should start with your local Bible-believing, Christ-centered church, the spiritual community where you’re fed and to which you’re accountable. In the New Testament, giving was not directed to the Church at large, the universal body of Christ, but to the church, the local Christian assembly. Even gifts that were sent to other places were given through the local church. Whereas the Old Testament temple was a storehouse, the New Testament Church was a clearinghouse, a conduit of gifts to help the needy and reach the lost.

Normally, I think firstfruits, or the tithe, should go to the local church. But I don’t believe in “storehouse tithing” if it means that a church hoards funds or spends them on frills or monuments to ego and prosperity. Freewill giving beyond the tithe also can go to worthy parachurch ministries.1 For fourteen years I was a local church pastor, and for twelve years I’ve directed a parachurch ministry. I believe that both types of ministry deserve support, but the church should always come first. That’s why we give more to our church than to our ministry.

Our giving should go first to the local church because it’s our primary spiritual community. (“Electronic churches” are a contradiction in terms. They’re media programs—not churches.) No mission boards, youth organizations, or Bible colleges are mentioned in the New Testament. There’s only the local church, which filled all these roles. But history has demonstrated there’s much that local churches have been unable or unwilling to do. Parachurch groups have filled the gap. Many have done a remarkable job. They’ve been servants of Christ and the Church. Others, unfortunately, have competed with churches, draining their resources.

How can a ministry in Chicago or Dallas be accountable to donors living in Idaho or New York? How can supporters evaluate whether parachurch leaders are of reputable character? I hope that most church members see their pastors in real-life situations. But all they know about the parachurch leader is what they’re told. From a distance, parachurch organizations with sharp brochures and attractive spokespeople often outshine the local church, where much of the giving supports mundane activities like paying the utility bills and the salary of a pastor who, though a man of integrity, may be ordinary. The church is small, the faucets leak, and the people are irritating. The custodian wears old overalls and putters about, jangling his mammoth key chain.

People think, I don’t want my money to pay the water or garbage bill; I want it to go 100 percent to evangelism. The television ministers, with their straight teeth and makeup, tell stories of thousands of conversions. Why fiddle with the penny-ante local church when you can send your money to the big boys? So people give their money instead to a parachurch group, apparently without realizing that it too has irritating, ordinary people; garbage bills; and a custodian with old overalls and a jangly key chain.

Paul doesn’t encourage individual believers to give to a needy cause on their own, but instead to give to and through the local church (1 Corinthians 16:2). When the early Christians sold their land and houses, they “brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone as he had need” (Acts 4:34-35). They didn’t discern on their own where the funds should go. They entrusted them to spiritually qualified church leaders, who distributed them wisely.

Writing in A.D. 390, John Chrysostom says this about the early church’s giving:
They did not dare to put their offering into the hands of the needy, nor give it with lofty condescension, but they laid it at the feet of the apostles and made them masters and distributors of the gift. What a man needed was then taken from the treasurer of the community, not from the private property of individuals. Thereby the givers did not become arrogant.2
Most of the undiscerning giving among Christians today stems from our independence. If we were honest, we might have to say, “I give to this place and that place as I see fit, rather than giving to the church to have it distributed as the spiritual leaders see fit. Why? Because it’s my money and I’ll do with it what I want. Furthermore, I enjoy receiving recognition and ego strokes from those to whom I send my money.”

If believers entrusted the distribution of their God-given funds to qualified local church leaders (I realize that some church leaders aren’t qualified), the worthy parachurch ministries would thrive and the unworthy ones would fade away.

I’m often asked, “But how can I give to my church when I don’t agree with how the money is spent?” Perhaps your church leaders are in a better position to judge this than you are. And if you actually saw some of these other ministries up close, you’d likely find as much or more to disagree with. If the Bible tells me to pay taxes (Romans 13:1-7), and I comply, even though some will be wasted and even used for bad purposes, surely I can give to God even when I don’t feel comfortable with every use of the funds. Of course, I must draw the line somewhere. If my money—God’s money—is going to Bible-denying seminaries and groups that promote immorality, it’s time to speak to my church leaders. If I still cannot in good conscience give regularly and substantially to my church, perhaps it’s time to ask God for help finding a church where I can give as he has directed.

Fundraising through Pledges and Faith Promises
Many fundraising gimmicks are used by churches, including raffles, bingo, and other forms of gambling. One church raised funds for its building program by giving cash prizes to those bringing in the highest pledges from other church members.3 But not all attempts at fundraising are gimmicks. Pledges and faith promises are also common fundraising methods. A “pledge” is a commitment made in light of known or anticipated income. A “faith promise” is a commitment to give a certain amount of money, even if the giver doesn’t know where it will come from. In either case, individuals are asked to designate an amount of money to be given by a certain date, perhaps in regular monthly installments. Some pledges are merely statements of intention. Others are serious commitments that bring a follow-up reminder from the church. Too many misses and the phone call turns into a visit from the pastor or fundraising chairman. Some pledges are actually legally binding contracts with legal liability in the event of a default. (When a pledge is simply an expression of desire or intent, or an agreement with God left for his Holy Spirit to enforce, it’s not necessarily unscriptural. However, when it becomes a legal contract, we’ve strayed far from the principles of biblical giving examined in chapter 13.)

It’s increasingly common, especially in building projects, to bring in professional fund-raisers or canvassing directors from outside the membership. No matter how well-intentioned, these programs communicate a sad message: The church leaders cannot share a compelling vision that the people will want to support, so they bring in a “hired gun” with an arsenal of ways to get money from people. Pledges are often the backbone of such campaigns.

The strength of the “faith promise” method is that it can prompt not only trust but discipline and ingenuity to earn and save money in order to give it to God. Having a tangible goal of, say, $500 or $5,000 encourages prayers for provision and acts of diligence. The weakness of this approach is that faith promises are highly subjective. They assume God has determined an exact amount of money to be given, and this amount can only be discerned through the person’s “feeling.” Because Scripture never says that God has determined or will reveal such an amount, to “trust God” for it is to obligate him to something he hasn’t promised in the first place.4 Committing to give a predetermined amount over a period of years may violate James 4:13-17, which tells us we cannot know how much money we will make tomorrow, much less months and years from now. If God leads me to relocate while I still have two years and $6,000 left on my faith promise, do I continue to give to my former church rather than my present one?

When the Macedonians gave “beyond their ability,” they were exercising risk-taking faith. This is more important than whether it corresponded to a particular amount they had promised. Whether one uses the faith promise approach or not, God honors prayer, dependence, and generosity. If we don’t set an exact amount, we may find that God still abundantly provides.
(I address two relevant issues—financial integrity and accountability in the Church and parachurch as well as the use of ministry funds for buildings—in appendixes A and B.)

Pastors’ Salaries
Pastors should be paid to free them for ministry. “Anyone who receives instruction in the word must share all good things with his instructor” (Galatians 6:6). Paul calls this the minister’s “right of support” from the church (1 Corinthians 9:3-12). He says, “The Lord has commanded that those who preach the gospel should receive their living from the gospel” (1 Corinthians 9:14). Furthermore, “The elders who direct the affairs of the church well are worthy of double honor, especially those whose work is preaching and teaching. ‘The worker deserves his wages’” (1 Timothy 5:17-18). Being paid more than he needs gives the pastor the opportunity to live as an example to the flock, most of whom—in America and Western nations—have considerable discretionary income. On hearing of his salary raise, one pastor told his elders, “This is much more than I need to live on.” The elders responded, “Yes, we know. We want to see what you do with it.”

I have no sympathy for churches that deliberately underpay their pastors, forcing them to find ways to supplement their income. It’s different, of course, when a church genuinely can’t afford to pay a pastor. Many pastors have gladly worked part-time jobs on the side to serve smaller churches, and I don’t mean to imply this is always inappropriate. However, it creates significant challenges.
Pastors and lay leaders should work side by side in financial matters. David High compares businessmen in the church to kings and pastors to priests. He argues that both have important roles but the two should not be confused:
Priests without kings chase provision to their own hurt. Kings without priests try to generate vision many times to their own hurt. Today we have churches full of frustrated kings, sitting in pews with their arms folded, listening to frustrated priests who have heard from God but don’t have the money to make it happen.…Many good, godly men have destroyed themselves and their ministries when they felt they had to become fundraisers. Once they start chasing money, something twists inside and their message and ministry begin to ring hollow.5

Pastors and Outside Income
I served as a pastor for fourteen years before becoming director of a parachurch ministry where I’ve been the past thirteen years. My heart is in the local church. A number of my closest friends are pastors. I respect and deeply appreciate pastors. What I am about to say comes neither from cynicism nor suspicion. It is intended for the protection of both pastors and churches.

The Lord decried the fact that priests and prophets alike were corrupted by money (Micah 3:11). Peter reminds church leaders to be “shepherds of God’s flock…not greedy for money, but eager to serve” (1 Peter 5:2, italics mine). He insisted that no money-lover was qualified to be a church leader (1 Timothy 3:3). In his ministry, Paul was so committed to avoid even the appearance of loving money that he often supported himself (1 Corinthians 9:18).

I recently read an interview with a pastor. When asked about his opulent home (with its own bowling alley), his response was, “God doesn’t want all his children in coach. He wants some of them in first class.” But when those in coach are paying for the pastor to ride in first class, it creates a distinctly different model than the “eager to serve” pastor advocated in Scripture.

Even at age eighty-two, Oral Roberts was still talking about shiny new cars and saying, “God wants us to prosper. And if we prosper, our people will prosper. If the pastor doesn’t prosper, the people won’t have the faith to prosper.”6 Consider the contrast between this prosperity model and the servanthood model of our Lord: “For even the Son of Man did not come to be served, but to serve, and to give his life as a ransom for many” (Mark 10:45).

Paul warns Titus about ministers “ruining whole households by teaching things they ought not to teach—and that for the sake of dishonest gain” (Titus 1:11, italics mine). These passages I’ve quoted constitute a biblical mandate to pastors and Christian leaders, and their boards and constituents, to take great pains to protect leaders and ministries from unnecessary temptations toward greed, financial impropriety, and possible scandal.

Serious problems develop when pastors are paid much more or much less than the average person in the church. Disparity can have an adverse effect on both pastors and parishioners. Years ago the tendency was for pastors to be underpaid, requiring them to neglect their calling to find other sources of income or tempting them and their families toward envy or resentment. Pastors who are underpaid—I mean, when the congregation can afford to pay them more—tend to be underappreciated, taken for granted, and sometimes patronized as “the poor pastor,” who is in fact kept poor by the church. Unfortunately, this remains true of many pastors today.

However, the tendency now in many large churches, especially with senior pastors, is just the opposite-it is to pay them as if they were company CEOs, tempting them to feel more important than the people they shepherd, setting them up, often unintentionally, to lord it over” the flock. Note the contrast in 1 Peter 5 between pastors being “greedy for money” and “eager to serve.” When a pastor encourages people to tithe and give generously in freewill offerings—which he should do as part of preaching the whole counsel of God—and his income is far more than theirs, people wonder, How can he understand our financial struggles when he lives in a house that nice and makes all that money? Sometimes this situation arises from the tendency to fill church boards with successful businessmen, instead of a cross-section of the congregation. This skews the average salary levels of board members and inclines them to pay pastors far above the church average.

I have many good friends who are senior pastors, devoted to God and the ministry. Many of them handle money well. I’m not questioning their hard work or integrity. I’m questioning instead the market that’s been created for pastors of large churches, who may make several times what other pastors on staff do, even those working harder with fewer vacations and less opportunity for outside income. Sometimes pastors are offered what amounts to bribes to get them to leave their churches. I know a pastor of a large church who declined an invitation to become a candidate for an even larger church, saying he believed it was God’s will that he stay with his present congregation. But the other church persisted, inviting him to fly out for a visit on a private jet. They wooed him and offered him an enhanced financial package, eventually persuading him to leave his church after all. (Apparently, God’s will was negotiable.)

Many churches became accustomed to doing special favors for their pastors when they were grossly underpaid. Clergy discounts were routinely offered, and in some places still are. Pastors were given free places to stay on vacation and other freebies—sometimes even cars. But today, when many pastors are paid adequately, the same favors are extended by habit. The IRS allows pastors to have tax-exempt housing allowances that save them thousands of dollars annually. I was very grateful for this exemption when I was a pastor, and I’m in favor of seeing it continue. My point is only that the old stereotype of the underpaid pastor isn’t always true—for which I’m extremely glad. Yet I’ve heard pastors who are making good salaries still talk as if they’re underpaid.

Some pastors receive outside pay for speaking engagements and writing books. This may be fine. But are paid members of the church staff using church equipment and time to do the typing, research, and events scheduling for which the pastor is being paid by outsiders? This situation sets up a temptation that pastors don’t need—the lure to say yes to out-of-town engagements and add-on projects in order to make money on the side without decreasing their regular pay from the church. These opportunities sometimes create ethical conflicts of interest that wouldn’t be tolerated in the business world. (If you’re paid by IBM to write software, can you then sell it to others and keep the profits? Anyone can do work on the side-but can you market work for which you’ve already been paid by your employer? And can you take time away from your desk to teach seminars and be paid for them?)

I believe that pastors and church boards should set clear parameters concerning the time and money involved in the pastor’s outside speaking and writing. These parameters should be fair to both pastor and church. How much time is the pastor expected to invest in local church ministry each week? Forty hours? Fifty hours? More? This should be mutually agreed upon, so the pastor knows when his church time and personal time begin and end.

Can a pastor write a book in which he draws from a message he gave to his church? Of course. But when the pastor speaks and writes in his non-vacation time, for which he is already receiving a church salary, is it ethical for him to receive book royalties and speaking honorariums for the same work hours? What message does it send if a pastor is paid by the church while writing a book, then is also paid by the book publisher, and then is paid again when he delivers the material at a conference that takes him away from his church? Is this really in the pastor’s or church’s best interests? (Ironically, when it comes time to set salaries, the board may reason, “He’s become very well known through his books and conferences—he deserves to have his salary increased, whereas our lesser-known pastors don’t qualify for a merit raise.”)

Sometimes these ethical dilemmas discourage a pastor because he wrestles with his conscience. This happened when I tried to write my first book when I was still a pastor. Every hour I spent on the book was one more hour I wasn’t available to the church. I was writing in the middle of the night to avoid a direct conflict, but that kind of a schedule took its toll. For several subsequent book projects, I requested one- or two-month unpaid leaves of absence, allowing me to focus on writing the book with no conflict of interest and no double pay. Most pastors want to do the right thing—and they want to know they’re doing the right thing.

When a pastor accepts a speaking invitation, he receives an honorarium on top of his regular salary. For a book contract, he may receive tens of thousands of dollars, perhaps a hundred thousand dollars or more, upon signing. For a full-time author, this may be business as usual, but for a pastor or parachurch leader, it may present a serious temptation for personal advancement partially at the expense of his church. If the board and church want and encourage him to write and speak, that’s fine—but clear guidelines should be set so that no one misunderstands.

If an unpaid leave isn’t used, an alternative might be to schedule a daily writing time (say, from 6:00 to 8:00 A.M.) before the pastor’s church duties begin. In this case, the book royalties could go to the pastor, because he’s writing on his own time. If the church decides to sponsor the writing project, the pastor might be allowed to write during regular office hours at his normal salary, with the royalties going to the church.

A church might grant a pastor a certain number of outside speaking engagements to be done on church time, with honorariums going to the church, or they might allow the pastor to keep the honorariums if they want to compensate for underpaying him. Pastors and boards should discuss how much time is appropriate for a secretary paid by the church to type books, articles, and materials for conferences, and to make related phone calls, if the proceeds from these activities will not go to the church. Examining various company policies for comparable arrangements might be advisable.

I offer these suggestions not to make life more difficult for pastors but to make it easier. It isn’t that I distrust pastors. Rather, I desire to protect them and their churches from temptation, impropriety, and the appearance of impropriety. When things are unclear, people always talk. If people don’t understand the pastor’s working arrangement, especially as it relates to writing and outside speaking and seminars, if it isn’t perfetly clear and in writing, then staff and church members are always tempted to gossip-which is in no one’s best interest.

(the following article was written by and is used with permission of Randy Alcorn, Eternal Perspective Ministries, 39085 Pioneer Blvd., Suite 206, Sandy, OR 97055, 503-668-5200,