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Abstract
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Introduction
Financial management has been a problem for many institutions, organizations, governments
and individuals since centuries of human existence. Where it is not put to proper check,
financial mismanagement could lead to crisis, conflict and even violence. It simply involves
the process of estimating the capital required and determining its competition. Financial
in ensuring a reasonable balance between outflow and inflow of funds so that stability is
Today, management of finance like before remains an issue for all institutions including the
church. Various churches are often faced with financial crisis that usually threatens the
development and spiritual stability of the congregation. The Pentecostal churches that are
often founded by a single individual are the worst hit by this menace. Since they are owned
by one man who is both the overseer and pastor, all financial transactions are solely
controlled by him. Thus, allowing a certain level of monopoly on financial matters. Some
hardly prepare a voucher of expenditures. Some even run financial accounts by faith based on
how money came in. They feel that they are accountable only to God. The simple truth is that
many of the pastors and founders felt that they are accountable only to God since they are
Although, some Pentecostal churches have finance committee, they take instructions from the
overseer who has the overriding decision. Besides, sometimes the problem of financial
management originates with the staff of the church particularly those that are not put under
proper check. This paper discusses financial management in Pentecostal churches using
House of Mercy International Gospel Makurdi as a case study. The crux of this paper is to
identify some of the loop holes that usually lead to mismanagement of the church’s funds.
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Secondly, the paper uses House of Mercy International Gospel, Makurdi to show how finance
Pentecostal churches
Pentecostalism is a fairly modern movement within Christianity that can be traced back to the
Holiness movement in the Methodist Church. A major focus of Pentecostal churches is Holy
para-church organizations that emphasize the work of the Holy Spirit in the lives of Christian
believers. It emerged first in North America at the beginning of the 20th century, when
members of the Wesleyan Holiness Movement began to speak in tongues and identified it as
the “Bible Evidence” that they had been baptized in the Holy Spirit (Acts 1:8, 2:1-4).
This baptism in the Spirit was said to provide power for living an “apostolic” life and
engaging in an “apostolic” ministry that included the charisms of 1 Corinthians 12:8-10. The
movement has gone by such self-designations as “Apostolic Faith”, “Full Gospel”, “Latter
Rain”, and “Pentecostal”. One of the first and most important centres of activity to identify
Joseph Seymour, and the Apostolic Faith Mission at 312 Azusa Street in Los Angeles, in
All Pentecostals believe in the imminent return of Jesus Christ, and therefore are highly
evangelistic and missionary driven. As a result, Pentecostalism is today found in all the
regions of the world including Africa, and is still growing. It has grown enormously
Due to the nature of its growth and expansion it has been observed that, Pentecostalism has
been able to meet the needs of many on the margins of society and church. This is why it has
been effective in bringing people into a personal relationship with God through Jesus Christ,
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in the power of the Holy Spirit. It encourages its members to share their personal testimonies
with others, to live their lives with an eye to “holiness”, to embrace good works as part of the
“Spirit-filled” life, to be open to the sovereign movement of the Holy Spirit through charisms,
signs and wonders, and to support the work of the church through regular tithing. In recent
years, some classical Pentecostal groups have begun to downplay the role of speaking in
tongues as evidence of baptism in the Spirit, though they continue to value it as a legitimate
charism of the Spirit. Some Pentecostal churches have embraced what is called a “prosperity
theology”, proclaiming that God wills both the spiritual and physical (including material)
well-being of God's people. Churches such as the Redeemed Christian Church of God, Living
Faith, Dunamis Gospel, House of Mercy International Gospel, Mountain of Fire Miracles
Church, and Church of the Kingdom of God, among others are examples of Pentecostal
churches.
Financial Management
the organization. It is the specialized function directly associated with the top management
and controlling the financial activities such as procurement and utilization of funds of the
with how a governmental unit or agency employs the means to obtain and allocate
publicly determined ends (McKinney, 2004). Moreover, Kautz (2007) is of the view that
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budgeting/costing, accounting and financial reporting and risk management. It is impossible
main objective of financial management is to ensure optimum funds utilization and to plan a
sound capital structure. Once the funds are procured, they should be utilized in maximum
Financial management in Pentecostal churches therefore mean the overall efforts employed in
the monitoring and directing of the churches’ resources which is usually obtained through
offering, tithes, donations and others sources for the growth and development of the church.
I have already indicated above that financial management in Pentecostal churches involves all
accountant or whoever is in charge of money. It should be noted here that when it comes to
maintaining financial integrity, Pentecostal churches of all sizes and settings often run into
Vonna Laue (2014) associates the problem of financial mismanagement with fusion of
responsibility, unmonitored workload, too much trust, limited staff and unqualified personnel
separation of jobs, a dishonest staff will be provided with access to the funds and access to
the information systems. Such a person can manipulate information and cover up changes
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with little fear of detection. Again, unmonitored activities such as collection of offerings,
tithes, and crusade donations; procurement of items and execution of contract or projects can
tempt people to inflate contract sums or embezzle. Similarly, too much trust usually becomes
On the other hand, Vonna warns that “Churches must steer clear of hiring or keeping
unqualified individuals in finance-related roles. Sometimes a church hires out of pity because
someone has been out of work a while; or a church might realize the person isn’t the right fit
but doesn’t have the heart to let that person go. Neither scenario leads to good outcomes
(http://www.churchlawandtax.com).
Following from Vonna observation above, we can scrutinize that the problem of financial
management in Pentecostal churches stems from the employees’ dishonesty, the nature of
work and workload on the staff of the church or even too much trust on the part of the
leadership. Yet, there are other opinions that see mismanagement of church funds from the
perspective of the pastors’ mode of leadership. This can be deliberate by their decisions or
choices to use up the church money; it can also be as a result their mistakes and oversights.
For instance, Dale Marples (2014) sees mismanagement of church funds from the perspective
of mistakes and oversight from Pentecostal pastors and leaders of the church.
Marples associates some problems or mistakes which Pentecostal pastors make that leads to
financial mismanagement. First, trying to be the financial manager for the church without
knowing how to do the job leads to mismanagement. This first mistake is symbolized by a
term: “Jack of all Trades”. Too many pastors have this syndrome, and think they can do
everything, or that they have to do everything. This leads to improper record keeping of
financial transactions of the church. The second mistake pastors make in handling the church
finances is trying to do a job that is outside of their call. As a pastor, one is called to
evangelize the people for the work of the ministry. In Acts 6, the disciples focused on their
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responsibility of continually being in prayer and ministry of the Word. Pastors are not called
to be financial experts or to express financial expertise. They need to do their calling and find
The third mistake pastors make with church finances is, not planning the finances like they
plan other church activities. They need budgets, once there is a budget, then, a plan following
that budget throughout the year becomes clear. A good accounting system is also needed to
track income and expenses. The fourth mistake pastors make is trying to be too spiritual with
the church finances thereby becoming too selfish and extravagant. This is usually backed up
The subject of church finance is an important aspect of the work of the pastor-in-charge.
Failure in the management of church money may adversely affect one's ministry as much as
moral failure. By ordering his or her life according to the teachings of Scripture on the
subject of stewardship, the minister can avoid bringing reproach on the Name of the Lord
Being –in-charge here therefore presupposes that, one must be accountable and transparent.
He must be ready to give account of his stewardship to the congregation and above all to
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God. This will not only encourage more support but will prove the integrity of the minister. A
embezzlement and poor reconciliation of financial records, there is bound to be suspicion and
It is often said that pastors are the image makers of their congregation. As such, their hands
must be clear in terms of finances. Perhaps all pastors need to examine their preaching
schedules to assure themselves that they are including the concept of stewardship regularly in
their pulpit ministry. This is why Patrick Clements (2002) suggests the following:
If the pastor dusts off his ‘stewardship sermon' only when it's time to raise
money for something, if it's not a regular part of body life and connected to the
church's vibrant vision, then his members will inevitably feel that they are
knuckling under to strong-arm tactics, and they will end up feeling negative
about both the project and the pastor (72).
This entails that, giving account of one’s stewardship has to do with words and action. In the
view of Wayne Pohl (1992), a couple of Sundays per year are sufficient for a stewardship
emphasis in a church. Pohl writes that; “We limit preaching on finances to two weeks out of
the year, I believe that if we do our job well during this emphasis, people will respond
positively and will generously fulfill their financial responsibilities to God for the rest of the
year” (43).
Based on the above arguments therefore, this paper observes here clearly that the problem of
financial management in Pentecostal churches comprises both the pastors, leaders, staff and
even members of the congregation who may from time to time have a responsibility to handle
a particular activity for the church. Thus, eliminating these phenomena requires a wholistic
Makurdi. As such, there are procedures guiding the income and expenditure of funds in the
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ministry. According to Vero Aluma (2017, Oral interview), first and foremost, receipts are
issued when transactions are made or when they pay for programs such as outreaches and
crusades. Again, partners of the ministry are issued with cards that have duplicate copies that
capture the details the person. These details include the amount in which one pledges to be
paying to the ministry. In case of crusades, the programmes of events alway contain the bank
account number of the ministry to which donations are directed. Besides, there is a standing
directive by the founder that mandates all money realized from any activity to be taken to the
bank immediately. By this directive, offering from the crusade is taken to the bank the
Furthermore, Evangelist Vero Aluma who is the founder, is the only person that is signatory
to all the ministry’s bank accounts. Thus, when she signs, the accountant Patience Okoja now
goes to the bank and withdraws and keeps it. However, all the ministry’s needs are
channelled to the ministry’s Administrator, Pastor Mark Eti Chucks’ office. When such
request comes to his table, he examines them, approves and forwards them to the founder for
scrutiny and final approval before any payment is made. When final approval is made, the
In terms of payments of salaries, voucher is prepared in the ministry and sent to the bank for
payments. Other expenditures such as fuelling of vehicles and generators, light bills and
kitchen allowances take a similar process. Before any expenditure is done, the ministry’s
accountant takes the record in her ledger. This ledger is usually audited by the founder
Evang. Vero Aluma twice very week, precisely on Mondays and Fridays (Vero Aluma, Oral
interview). Thus, going by this arrangement, there is separation of duty amongst the ministry
staff. This is in order to checkmate excess workload on staff. Checks and audits are ensured
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To ensure all time financial efficiency and transparency in the ministry, reports of events are
usually properly captured and documented. For instance, reports of outreaches, crusades,
thanksgiving masses, donations, and all other activities that demand financial sponsorship
have written reports at the end of the events. These reports capture all incomes within the
period and in the process of organizing such programmes; the amount of expenditure incurred
and the purpose for such expenses; deficit if any, and the balance. A report of Income and
expenditure for each programme of the ministry is usually prepared by the accountant who is
always part of any planning committee that needs to spend money. In this way, all items
bought and services paid for are captured by the accountant for onward reporting.
Finally, Pastor Mark Eti (oral interview) reports that, Planning for programmes is solely
dependent on the kind of funds the ministry is able to realize. Their plans for any proposed
project is already incorporated in the proposal that they submit for grants. Also, the main
The unpredictable economic climate has created budgeting challenges for many
organizations, and the church is no exception. This creates the need for churches to find help
figuring out the best way to manage their sometimes limited resources. Church leaders are
often challenged with ensuring there is continued funding to support current programs and
fixed operational costs. This can be difficult because the financial needs of a church can be
Demarcation of responsibility: Pentecostal churches must make certain that at least two of the
following three specific duties are split between at least two unrelated staff namely;
without separation of these job types, there is a tendency for someone with access to the
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funds and access to the information systems to manipulate information and cover up changes
Strategic Planning: Developing a strategic plan is one of the first steps to strong financial
management. Taking the time to set a course of action, and develop church goals proves
relevant to effective financial management practices. The beauty of developing a strategy and
plan is that it takes every area of church operations into consideration, and allows for
designating resources toward those critical areas that will sustain and grow the ministry.
A well thought out plan also takes into considers those financial policy and reporting
measures that are necessary for responsible financial management as obtainable in House of
Budgeting and Realistic Revenue Projections: Budgeting is critical for successful financial
management and church budgets are tools that help leaders achieve objectives and help to
curtail unplanned spending. Investing the time, and committing the resources, to creating a
budget can have a significant impact on the financial health of the church and can provide the
necessary finances to support church strategy and goals. Again, many churches are trying to
operate with uncertain revenues and should be making realistic projections of donations.
Oversight and Accountability: Once a budget is set, oversight and accountability for adhering
to the budget is important because it keeps the church from spending resources that are not
allocated. The Church Finance Committee, coupled with a strong performance management
process, is a great way to ensure accountability for budget oversight and spending.
members on cost saving ideas, strategies for raising funds and make them aware of any
financial challenges. For example, if an unexpected major facility repair has occurred, let the
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church know about the unexpected cost. Create a consistent communication process, share
budget information and provide avenues to answer any financial questions that members may
have.
Financial Emergency Plan: the finance committee must make sure the church has a plan in
place in the event of a financial emergency and use positive profit margins to fund an
emergency account. When they budget for an emergency it create a financial shock absorber
that buys the time needed to make adjustments and spending changes in the event of a true
financial emergency.
Above all, it is the submission of this paper that many church financial problems can be
avoided by good planning, consistent budgeting and accountability for spending, proper
record keeping, consistent reporting after events, monitoring, separation of responsibility and
timely communication. Church leaders should embrace structured processes to ensure the
resources are available to keep the church moving forward, regardless of the economic
ambience.
Recommendations
personnel handling church finances. Low pay can serve as a trigger for rationalizing a
fraudulent act, so it makes sense to periodically make certain the compensation for
ii. There should be demarcation of responsibility for the staff to avoid overworking staff
iii. There should be monitoring and periodic auditing of the financial records of the
church
iv. Churches must also have Realistic Revenue Projections and Budgeting to authenticate
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v. There should be strategic planning as well as emergency financial plan for the church.
vi. Finally, Pentecostal churches must cultivate the habit of effective communication
Conclusion
From the findings of this paper, the House of Mercy International Gospel, Makurdi is fully
aware that there are risks involved in the management of cash and they have adopted
varying strategies to cope. The question that comes to mind particularly is whether
other Pentecostal churches have adopted such similar options or effective strategy to cope
with financial irregularities. Although Pentecostal churches are not established for
commercial purposes (they are non-profit organisations), it is more encouraging that they
should embark on proper financial management practices to justify their funding by their
congregations. This in line with the suggestion of Denison and Beard (2003) that managers
should keep administration lean and build reserve funds to cushion against financial shock.
Moreover, attempts should be made to address areas of value creation. This includes:
redefining their vision and mission, adopting the best financial practice within the
church, invest in high impact humanitarian and service based projects, innovation and active
partnering with for profit to widen their scope for social value creation. Finally, the
Pentecostal pastors and church leaders generally need to always have discussions with
experts who have backgrounds related to financial management in order to discuss the
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References
Clements, Patrick L (2002). Proven Concepts of Church Building and Finance. Grand
Rapids: Kregel Publications.
Harris Charles (2014) “Church Finance Part 1: The Biblical Concept of Stewardship”
http://globalchristiancenter.com/administrative-leadership/strategy Retrieved,
27/4/2017
John Warren Johnson (1981). How You Can Manage Your Money. Minneapolis: Augsburg
Publishing House.
McKinney, J.B (2004) “Effective Financial Management in Public and Nonprofits agencies”.
Praeger Publishers.
Pohl, Wayne. (1992). Mastering Church Finances. Portland, Ore.: Multnomah Press.
List of Respondents
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