With church attendance impossible in most places due to the COVID-19 pandemic, tithes and contributions may also decrease, and churches must rethink how members can continue the stewardship of giving. Steady giving is doubly important for small churches.
Electronic giving is an effective way to maintain steady income—and implementing it, even for smaller churches, shouldn’t be overly complicated.
Here are four easy steps.
1. Select a Provider
The first and probably most difficult step is selecting a company to process electronic contributions and deposit them into your bank account. Companies differ in pricing, customer support, and how they process contributions. I recommend searching for companies specializing in churches. For example, LifeWay is currently making its Generosity giving platform available to churches for free. It’s a complete system, and no technological expertise is needed.
You’ll find quite a few companies that work with churches. Pick perhaps half a dozen of these providers, check online reviews, and contact promising providers by phone. Before you do this, estimate how many transactions and what dollar volumes you’ll have each month.
Ask the following questions:
- How much do they charge? Do they itemize the bill?
- How do they bill you? I’d choose a provider that debits bank accounts monthly.
- How and how often will they deposit contributions? I’d give preference to more frequent deposits.
- How and how often will they report contributions to you? Whatever the frequency, the report should list for each contribution the donor’s name, the amount, the date the donor authorized the contribution, and the date the contribution was transmitted to the bank. For each credit-card transaction, the report should list the transaction and discount amounts.
- How will your donors interact with the provider’s giving platform (phone app? church website? their website? text?), and what help will the provider give you in implementing it? If you have a website, add a link to the giving platform. The provider should help you.
- Do they offer ongoing customer support?
2. Communicate with Your Congregation
No doubt you’ve established a communication process to hold your church together during this difficult time. While being sensitive to the fact that some will lose their income for several weeks or longer, let them know that the church still needs their financial support as they’re able, and that you’re instituting a new way to give. Providers may help you do this with brochures or other materials.
Some members will have concerns about giving electronically. If you’ve selected a good provider, they shouldn’t have any reason to worry. In my church, we’ve been using electronic giving since 2011. During that time, problems have been minor, easily resolved, and our provider has always been helpful. We’ve had no lost funds or identity theft.
3. Process the Contributions
Accounting for electronic contributions will require some extra effort, but the process needn’t be overly burdensome. Some church-accounting software will integrate directly with the provider’s software, but we’ve chosen to record the contributions manually at month’s end. If you’re a smaller church, the volume of electronic donations probably won’t be overly large. My church processes about 125 to 150 electronic donations a month. With normal volumes, the monthly process usually takes two or three hours.
Here are some important things to note:
- Electronic contributions will be identified on your monthly bank statement. Compare the total with the total on your provider’s statement. (If your provider makes daily or weekly deposits, you’ll need to calculate your bank-statement total.) Remember to account for credit-card charges, which your provider will subtract before making deposits to your bank. If there’s a difference, you’ll need to contact your provider and/or bank to resolve it. I don’t recall ever having to do this.
- After you’ve reconciled the two statements, make an accounting entry for the electronic contribution.
- Sometimes there’ll be contributions in transit at month’s end. They’ll be either on the provider’s report and not on the bank statement, or on the bank statement and not the provider’s report. (This last situation seems strange, but for us it occurs almost monthly.) I defer to the amount on the bank statement, keeping track of the contributions in transit to reconcile them the following month.
- Assuming the provider debits your bank account by ACH, make an accounting entry for the provider’s charges (i.e., credit cash and debit electronic contribution expense).
- Using the provider’s statement, follow your usual procedures for posting contributions to your donors’ giving records. (Remember to consistently account for contributions in transit.)
- At the end of the year, watch for contributions made in December, but show on your January statements.
4. Account for Cash-Based vs. Accrual-Based Systems
To keep this process simple, I’ve assumed you’ll use a cash-based accounting system. In other words, contributions and charges are recognized on the date they occur. If you use an accrual-based system, you may need to modify the above process. For example, our provider debits our bank account a month in arrears.
These procedures should help you to implement electronic giving quickly. You should be up and running with a stable process in a week or two. Our church has some additional procedures, but the basic process is the same for most smaller churches. No matter what, we know the Lord will provide for his church during this uncertain time.