Donations, Savings & Investments

Local churches not only have the responsibility of serving their community and congregation spiritually, but they also need to set an example of good financial stewardship. The word steward, rooted in the Greek word “oikonomos”, means “household manager”. Managing how donated funds are tracked, saved, and invested is part of running a church household. Churches receive substantial financial support from regular cash gifts and contributions for operational needs and also have the potential to receive donor-restricted funds for building construction, benevolence, or missions. Below are some common questions and answers about managing donations, savings, and investments.

Managing Investments

There are many different opinions regarding using donated funds to make money. While individuals need to save money for retirement and the stock market is a good means for that to happen, a church would not have the same need.  It is not prudent to invest operating funds or savings into risky investment holdings.  Listening to the donors and looking at the church mission statement may give you an answer to this question.  The stock market does not have a ministry purpose and most donors expect their funds to be used toward ministries. If you are still unsure on whether to invest in the stock market, we recommend you talk to a qualified like-minded professional who has no financial interest in the decision.

Accountability to the congregation through annual financial reports and presentations is important to keep leadership committed to making sure church funds are being used for a Kingdom purpose. However, a church may find itself in a situation where large endowments can keep the physical needs of the church operating but leave it spiritually dead. Focusing too much on investments and return can put the church in a position to stay open, but the mission and the vision of the church may suffer. Providing financial updates to the congregation can work to maintain a balance between earning a prudent return on excess cash and making sure the funds are continuing to make a Kingdom impact.

Sometimes there is no extra money to put into savings. It can be hard to take a good look at your budget and decide what programs need to be cut to start saving, but this must be done. If there is no room to cut in the budget, having an honest conversation with your congregation about the current financial situation and the need to have emergency savings may be a good option. Not having any savings can cause a lot of problems for the church, even so far as closing the doors. It is okay to start small and build up savings over time. We know God can do much with little and can multiply resources when needed, just like the loaves and fishes.

It is important to keep a balance between funding ministries and savings.  If there are no savings to keep the building in good working order, there may be no ministries to support. If all money is tied up in savings, the ministries are not supporting the mission and vision of the church. Using some practical guidelines to help your church find that balance is important. The first step for savings is having an emergency fund for operations and building maintenance.  Because churches are uniquely different in how and where they worship, the needs of churches can look different.  What does that look like for your church? Is God calling you to stretch your resources farther than you are comfortable with and trust Him with the results? Prayerful consideration in this area, along with discernment and wisdom from godly counsel, will help your church make a good decision in balancing ministries and savings.

To keep things in perspective, always refer to your church’s mission statement. Surprisingly, that can often give answers regarding how to spend and save money. On one hand, we do not want to put the church at risk of closing because of mishandled savings and poor planning, yet on the other hand we do not want to hoard money that is not being used in alignment with the mission of the church. Keeping a balance of the two can keep the church true to the mission. The church leaders need to understand what is at stake when ignoring either of these two important parts of the church.

Let us say church leaders decided not to have any savings. Giving is good and there are a lot of ministries that need things—new sound equipment, more outreach to the community. Then, suddenly, the church is faced with some large, unexpected repairs at the same time giving decreases due to a downturn in the economy. Not only would this put your ministries at risk, but it also endangers the livelihoods of the pastors and church leaders.


Saving for the future is not only encouraged in the Bible (Genesis 41; Proverbs 21:20), it also builds a solid financial foundation for the church. Having a healthy cash reserve can protect from unexpected expenses, declines in giving, and periods of transitions in the church. After the recession in 2008, a survey revealed that one out of every five households began giving less money to faith institutions and 22% stopped giving to the church (Dave Ramsey). Wisdom in spending and saving is needed to keep a solid financial footing (Proverbs 21:20).

The first step in knowing how much to save is creating a budget. A budget will bring clarity to your cash flow. Items in your budget include operational and miscellaneous expenses of the church. Every church’s needs are slightly different but a good place to start is by saving 10% of your operating expenses until you have at least 3 months of operating expenses on reserve. Once you get to 3 months you may want to set a goal of 6 months on reserve.

The unexpected

For example, a 100-year-old church may not have a mortgage, but the cost of maintaining and updating an older church will be different than a newer building. Consider looking over past unplanned expenses and anticipated future expenses.  Remember that time when Scotty the spirited 3-year-old flooded the men’s bathroom? Unexpected!  Did the endangered field rats just make their new home in your choir room? Who would have seen that coming? Planning for these mishaps prepares you for the unexpected!

The anticipated

Your church is doing well, you have emergency funds saved, you have funds for the unexpected and the church body is growing. What a blessing! However, there is nowhere to park and the sanctuary has standing room only most Sundays. It would be nice to offer a specialty coffee area where congregants can mingle and fellowship.  If this is your church, it may be time to start thinking about a project-based savings fund. These funds are earmarked for a specific project and are donor-restricted for the purpose of the project. Often, this is a capital campaign project so when the monetary goal is reached, the project can get started.

Does your church not have a building? Saving strategies make it easier for a lender to look at your church as a good investment risk. Planning early can make a big impact with lenders and the requirements for securing a loan.

Emergency Savings for Operations

These funds should be in a liquid account, with the cash available to you at any time.  Remember they are only to be used for operational expenses and cash flow shortages resulting from lower-than-expected giving.

Church Investors Fund offers a Foundation Savings Certificate that would be a good option for emergency savings.

Building Maintenance and Repairs

You might not need these funds to be as liquid, but they still need to be available in case of a planned or unexpected repair to the building.

Church Investors Fund also offers a Building Fund Certificate. This is a special certificate only for churches to give them a decent return on building-related savings while still having liquidity if used for building purposes.

Project Savings or Endowment Savings

Since project savings and endowments do not need to be liquid, it may be prudent to invest. Church members who want to continue to support ministries that are important to them often leave endowments to be used for specific ministries—such as missions or scholarships—that cannot be put into the general fund budget. The legalities of these endowments can also create a barrier to their use.   Putting these types of funds to work with a careful investment strategy is a good option.  A financial advisor who understands the unique position of a church or nonprofit would be a good place to start to develop a strategy that will work for the long and short term.


While it is true that the burden of proof falls upon the donor for tax deduction for charitable purposes, it is also true that not all donations are the same.  For details about donation receipts and statements, make sure to review and comply with all relevant IRS Publications. One example is IRS Publication 526. This details how to give the correct receipts for different types of donations, including non-cash donations and donations where the donor received something in return. If you are not sure how to meet these requirements, talking to a professional tax advisor may be a good idea.

Any donation worth $250 or more must be recognized with a receipt. Although donation statements are not an IRS requirement, it is good practice to inform church attendees and donors that they will receive donation statements by January 31st, the deadline for most tax-related documents.

Investing (Example Stories)

One church lost more than $100 million due to investing in the stock market while the market was high and being forced to sell when the market hit rock bottom. Because of the astronomical losses, they were in the position where they had to reduce expenditures from $7.5 million to $4 million. The leadership realized that some of the issues stemmed from poor accountability of the boards and allowing ministries to be taken over by those who did not share the gospel outlook of the church.  The leadership also reflected on themselves and, when looking back, and regretted not speaking up or insisting on different behavior.

The result of this mismanagement has resulted in the leadership having to consider hard decisions such as the possibility of cutting several positions and leaving the few churches still open to pay their own operating expenses.

It may be a good idea to start planning for growth long before the need arises. If a church is meeting in a rented building and God has put it on their heart to put down permanent roots in the community, then it may be wise to start saving as soon as possible. Opening a Building Fund type of account can provide a competitive return on the saved funds and help keep the purpose of the funds separate from operating funds until the time is right to buy.

The contents of the Church Resource Center are for general information and educational purposes only. The reader should not rely upon the material or information on the website as a basis for making any business, legal or any other decisions, and should not make any decision without first obtaining professional legal and accounting advice specific to your circumstance. Church Investors Fund will not be held accountable for any legal actions the reader may take. 2021 Church Investors Fund. Terms of UsePrivacy PolicyDisclaimer.

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