Thank you for joining us for yet another instalment on the Risk Series! This is part 5, if you have missed the previous posts you can find links at the bottom of this post. If you read this post and feel there there is more that you can be doing to reduce risk in your church, don’t hesitate to contact the Benkorp Team today for more information: [email protected]
There are many areas of RISK in a church related to the finances, physical damage, personnel (staff and volunteers), reputation, members and all people who attend services, media, as well as areas of faith and doctrine.
Have you considered all the areas of RISK associated with your church?
Not just the obvious, such as fraud, mechanical breakdowns and natural disasters. There is nothing worse than dealing with a disaster of some form and saying afterwards, “we wish we had allowed for this” or “we could have provided for this if we had thought about it”.
Through this series of articles on RISK we want to help you and your church consider as many risks as possible so that the Risks can be assessed and dealt with. This means that the risk is: noted, discussed and assessed for probabilities and financial and other implications. Action plans can then be prepared.
Damage comes on many fronts including:
- natural disasters of tempest and storms
- floods and fires
- people with ill-intent
- break down in utilities and other service and equipment.
All the ramifications of these incidents must be considered. For example, legal activity can undermine many initiatives of a church. In these times when litigation is easily accessible and often considered by people who believe they are aggrieved by the church there are real risks for the church as well as the people involved and the congregations at large.
There are other RISKS that may not have seemed obvious in your church in past times. Financial areas of risk also open through other forms of change. These are associated with changes in the demography in the church’s area,
- climate change can drive people away for your town/region,
- traditional long-standing people or families no longer around your church (1,5 ,10 years) maybe deceased, moved to care, moved to higher education, family breakdown or dysfunction
Another factor that has had a lot of impact and therefore risk to congregations is the changing patterns of ‘faith expression’, such as:
- people changing from traditional forms to charismatic or pentecostal forms with the consequent shifts in congregational life, attendance and activities
- doctrinal and related matters, such ’church splits’ or groups gradually leaving
- mobility and ‘church-shopping’, the increasing tendency for people and families to change their patterns of attendance
Recently I met with people who were recalling a disaster. There was a group housing situation, similar to a hostel and a fire nearly gutted the building. Such an incident had not been foreseen because of the ‘rules of the house’ and so the ramifications were disturbing for the organisation. A person in a room on the top floor (3 storeys) had a heater (although not allowed in rooms per the rules) near the curtains and (yes you guessed it), the curtains caught on fire. The fire quickly spread in the room. It would have engulfed the whole building if not for the alert and quick response of a room-neighbour of the first person who was able to quell the fire.
The financial implications could have been severe for the losses as well as the personal and group outcomes. There were significant financial risks that had been completely overlooked. Sadly, it is too late afterwards to say, “we wish we had allowed for this but we didn’t even think such a disaster could happen”
In terms of accounting there were no provisions or allowances anywhere and such incidents were not necessarily included in the insurance coverage.
Whatever the possibilities of RISKS for your church, they will affect the finances – budgets, forecasts and cash flows and even the actual published financial reports
- What are the “provisions for loss or damage” (with notes about the details) in the accounts of your church?
- How have the considerations for “changes in the congregation and members” been discussed by the finance and other councils/committees of your church?
- Where are the financial implications of these RISKS reflected in the finances of your church?
RISKS need to be managed so that the finances of the church are under control. It is incumbent on the finance and risk committees to take heed of all RISKS
In the next articles we will introduce you to some practical risk assessment and finance tools.
Whatever the possibilities of RISKS for your church, they will affect the finances!
For more information on how Benkorp can help your church reduce risk and take control of the financial management of the church, contact us today!