How much should the church hold in reserve?

by Pastor Greg
(Atlanta, Georgia)

I am the pastor of a small church. Our annual expenses are $60,000. We have no debt. We have a reserve fund of $74,000. So we have a reserve that is well over 100% of our annual expenses. This money is viewed as sacred by some of the people-a very vocal minority.

What can I tell my people is a reasonable amount to be held in reserve as a percentage or number of months expenses?

Comments for How much should the church hold in reserve?

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Endowed Churches
by: NRK

Just look at the history of endowed churches (Trinity Wall Street comes to mind) and you can track the issues they have had. I attempted to create an endowment at a church and the pastor was dead set against it because he was convinced that the church grew through the effort (the butterfly coming out of the cocoon).

I like the idea but it takes dicipline.
Reserve Funds
by: Randy

As incoming moderator of a mainstream congregation I have thought a lot about this issue.

I recently read an article written by a pastor of a congregation. In the article, it was asserted that a large reserve, even greater then 100% of annual operating expenses, was good stewardship.

He described a scenario experienced by his congregation where membership and contributions were declining but the church was able to continue operating in the same way that they had been because they could rely on the reserve.

I asked myself...what is wrong with this picture?

It would seem that possibly the reason that this church was experiencing a decline was that their message and service was not satisfying the needs of the people. In my mind, the large reserve was a barrier to change and that is what was needed here.
Size of reserve
by: Marcusintexas

I am treasurer of our church which has a budget of slightly less than $300,000 in 2012.

Our reserve which is held in a different bank than our operating account is about the same size as your reserve---$74,000.

In our case, this would equate about 25% of our budget-----3 months of operating funds. Using the same general guideline, your reserve should be $15 - $20 thousand, but your more conservative members will most likely see that as too small, so you might want to talk in terms of a reserve that would cover six months of operations---about $30,000.

I assume your current budget is expected to be fully funded from tithes and offerings for the current year without having to use any of the current reserve.

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