Nashville, Tenn. | About 1 in 10 Protestant churches has had someone embezzle funds, according to a survey of 1,000 Protestant senior pastors from LifeWay Research. The group conducted the survey Aug. 22–Sept. 16, 2016.
That figure isn’t surprising, said Scott McConnell, executive director of LifeWay Research. Most churches rely on volunteers to handle their finances, he said. Those volunteers are usually honest. But churches often lack systems to catch those who aren’t. As a result, he said, money that could have been used for ministry goes missing.
“Churches run on trust, but they also know people are imperfect and can be tempted,” McConnell said. “That’s why safeguarding a church’s finances is an important part of ministry.”
Overall, 9% of pastors say that their church has had funds embezzled; 91% say they are not aware of any embezzlement. Churches of Christ ministers are more likely to say their church had funds embezzled (16%) when compared to Baptist (7%) or Presbyterian/Reformed pastors (6%).
Pastors of mid-sized churches—those with between 100 and 249 members—are less likely to say funds had been embezzled (6%) than those with 250 or more members (12%).
A study of more than 2,400 fraud cases at businesses and nonprofits by the Association of Certified Fraud Examiners found 2.4% of cases involved churches or other charitable groups. The average loss was $82,000.
As part of the LifeWay Research study, researchers also asked pastors how much cash their churches had in reserves. Researchers found a number of churches function with little margin for error when it comes to their finances.
One in 4 (26%) has operating reserves to cover seven or fewer weeks, according to their pastors. A similar number (24%) have between eight and 15 weeks; 15% have between 16 and 25 weeks of reserves; 12% have between 26 and 51 weeks; and 23% have a year or more. The study found smaller churches often have more weeks of reserves than larger congregations.
“It takes a lot of faith to run a church, especially when finances are tight,” McConnell said. “But some churches may be missing out on ministry because there’s not enough money in the bank to respond to needs and opportunities that arise.”
– From Baptist Press