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Fixing The Finances of the Adventist Church: Tithing

Hands pulling a one dollar bill out of a wallet.

In the first two articles of this series, we talked about the basic principles of managing a nonprofit: make it lean by eliminating wasteful infrastructure, and make it smart by putting qualified people in charge. In this third article, we will talk about the fuel behind the mission: tithe. We spend so much time talking about the divide between what is taught theologically in Adventist institutions and what is preached in church. Now we must begin a conversation about what Adventist higher education teaches about finances and how that differs from the church’s actual finance management. 

It’s time for change. We all know it. I have spoken with dozens of non-pastoral friends who have left Adventist church work and they have voiced the same thing I felt throughout my own working experience: new ideas are not welcome, and change is not even considered. 

The denomination operates on a structure-driven business model that is over 100 years old. Our treasury departments are filled with many great accountants who work in monthly and annual cycles that are almost mechanical in how they replicate everything year after year. Budgeting is a static process in which many conferences work off a percentage of the last year’s tithe. Filling in the expenses is a formulaic exercise. The budgeted money is tied to rules that are so pre-determined that conferences and unions don't have much room to experiment and try new things. 

Make no mistake, this is on purpose. The church would rather operate with high overhead and a bureaucratic committee system than allow a bold leader the flexibility to experiment with new ideas. If we want change, it must start with giving more financial freedom to our local conferences. To do that, we must rewrite the rules governing the use of tithe. 

Let’s start with how revenue is generated: the faithful giver. It’s time to acknowledge that those faithful, systematic donors support the church. The failure to view tithing as donation—instead of a salvific obligation—creates lethargy in managing how tithe and offerings are given. When the church blames unfaithfulness for scarcity, school closures, and budgetary shortfalls, it ignores church leadership’s responsibility to execute the expected norms of donor management. Good donor management has a feedback loop that considers what donors want to fund. It doesn’t rely on shaming church members into tithing. It is never okay to act as if a tithe giver owes the church money. 

It’s time for the Adventist church to utilize rating agencies like Charity Navigator and GuideStar to begin measuring itself against best practices and metrics from across the country. How much does it cost to generate one dollar of tithe? What are our admin/fundraising to programmatic expense ratios? In my time working for the General Conference Auditing Service—and even more so since leaving church work—I have often reflected on this thought. As a CFO in the civilian nonprofit world, I spent ten years measuring budgets and financial performance against key indicators that have been set up by these public resources. If the church’s only metric is a measurement against itself, change will never happen. 

My professor and mentor at Southern Adventist University, Jon Wentworth, used to say in class, “If you do not define the goal that you are trying to achieve before you start, the end always looks like success.” The Adventist church has a lot of “success” that simply isn’t objectively legitimate because its guidelines have not been defined. The church accounting manual is filled with chapter after chapter of technical guidance on how to build budgets, do reporting, and perform just about every financial transaction that one could encounter. However, it never even mentions the functional classification of expenses or cost metrics. 

It's time for change. Even if you go to your conference constituency meeting and watch the standard PowerPoint presentation about how a dollar of tithe is split up, there are still many aspects of tithing that are completely lost to the lay member. Section V of the North American Division Working Policy on “Use of Tithe” reveals three important points:

First, there are so many rules. And for every rule that exists, there is an accompanying loophole. The biggest loophole in the entire system has to do with how tithe money is exchanged in order to be used outside of tithe policy. Money is collected at the local church and then sent to the conference. The conference sends money to the union, which passes on much of that money to the division, but also sends some right back to the conference. The division then sends money to the General Conference, but also back to the union and the local conference. And that all happens outside of something called “tithe exchange.” In summary, if the church needs non-tithe funds for things that are not allowed under the use of tithe policy, they can send their tithe to the General Conference, and the GC will send back non-tithe dollars. Why have these rules if they are so easy to get around? Why make something so needlessly complex? 

Second, these rules are not uniformly followed. As our current church leadership likes to retort regularly, the policies passed at GC sessions are the law and cannot be ignored by rebellious rogue entities. However, there are still inconsistencies. For example, Policy V 10 05 (2)(a) says that the local conference should receive 100 percent of the title donated by individuals within its territory. Despite this, select organizations—such as Amazing Facts—allegedly have special agreements that allow them to retain the full amount of their acquired tithe. This is a clear violation of a policy voted at a GC session, and yet it’s never talked about.

Third, some of these rules are based on writings by Ellen White and can be dated back to 1894, 1904, and 1908. This means that many of our tithe policies are 100–130 years old. And while many will lean on Ellen White’s spiritual authority to justify keeping these policies, I find this disingenuous because of the number of tithe policies that have no reference at all to White or any other “spiritual authority.” For instance, we didn’t have defined benefit pension plans when White was alive, but current policy includes an entire section outlining how tithe can be used to fund deficits in those plans. 

The faster the path between donated money and its targeted destination, the happier donors are and the more they tend to give on a recurring basis. This means that the further a dollar must travel and the longer it takes to be spent, the more that organization loses its sense of mission. This is where trust breaks down, and the result is more and more people preferring to give offerings to their local church budget instead of tithe.

It’s time for church administrators to modernize the system, manage tithes and offerings more effectively, and streamline where those funds go. As part of that process, it’s time to allow the local church to keep a portion of the tithe remitted and to loosen the restrictions on how tithe can be used for education. If we want a growth-focused culture, the places where evangelism and education happen must be financially secure, afforded the funds to experiment, and protected from the burdens that all cash-strapped organizations encounter. For the last few decades, decisions made at the highest rungs of church administration have had significant impacts on the cost of operating local churches and church schools. These decisions carry hefty price tags. Here are some examples:

1. The Office of General Counsel (OGC) at the General Conference is staffed with fine people. I interacted with many of them during my time as an employee. Unfortunately, many of the opinions issued by OGC have led to unbalanced policies. Because all local churches and schools are owned by the local conference, the OGC has dictated that all employees of churches and schools are employees of the conference. As such, they must all be paid the same amount. The result is that the local church administrative assistant must be paid the same amount as the administrative assistant to the conference president. I was a local church treasurer when faced with a situation like this and saw the budget for our administrative assistants nearly double overnight. In an effort to protect the church and eliminate risk of legal issues, many financial decisions appear to be needlessly conservative. These decisions are generally one-size-fits-all solutions instead of a flexible list of if-then scenarios and options for local entities to follow. 

2. Adventist Risk Management (ARM) insurance premiums are often significantly higher than market rates. When I was a local church treasurer, I went to a local insurance company with the rules on coverage for our insurance and asked for a quote. It came back as less than 30 percent of the ARM premium, but I was informed that all churches must purchase insurance through ARM. When I inquired as to why ARM premiums are so high, I was told two things: First, many older churches that have low membership also own buildings that have fallen into disrepair. An outside insurance company would likely not insure those buildings, so ARM insures them at a higher price. That premium is often communalized. Second, outside insurance companies do not cover some unique things that happen in church entities, such as accidents at athletic events, transportation accidents, and weather-related phenomena. Thus, when ARM steps in to help an organization with inadequate coverage, violations against coverage rules, or reserves in these areas, the premiums must increase across the board to recover funding. 

3. Academies are required to have a GCAS audit. The cost of that audit is often multiple times higher than what a large regional accounting firm would charge for a quality audit. 

While these are just a few examples, these top-down mandates—which may make sense when looking at the church structure as a whole—have significant impacts on local church and school budgets. If there was less inventory in the church’s infrastructure, if we had more qualified leaders looking strategically at these issues, and if the tithe use were more efficient and effective, I believe the local church could be much stronger. With some of the changes suggested above, the mission of the church could have a much larger impact. 


Roger Keaton is chief financial officer of the Child Saving Institute which has a 131-year legacy in Omaha, Nebraska. He spent about eight years as a staff auditor for GCAS and ADRA and then as associate treasurer for the Northern California Conference before taking a job as CFO for Yellowstone Forever in Montana, where he led the successful merger of the Yellowstone Association and Yellowstone Park Foundation. He earned his bachelor’s degree in finance and international business from Union College (now Union Adventist University). He earned his master’s degree in financial services from Southern Adventist University. Keaton is a certified public accountant and certified fraud examiner.

Title image by Allef Vinicius on Unsplash.

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