Those in the arena will work with other churches and see commonalities to provide recommendations on things like negotiating loan covenants.
Denise Craig: Anybody else seeing anything with outsourced accounting?
Dan Mikes: We’ re definitely seeing an increase in outsourced accounting, but remember: if you end up borrowing, the bank will likely require a CPA review or audit. CPA independence rules dictate that a CPA cannot audit periods during which they were employed by the client in a financial reporting role. So, you may end up with two vendor relationships.
INTEREST RATES
Q: What should churches know about interest rates right now? And how might that impact decisions around saving, borrowing or investing?
Dan Mikes: We’ re in a really unique period, from an economic cycle perspective. Historically, the yield curve only inverts 11 % of the time. In other words, one-year and two-year U. S. Treasuries are paying more than a five-year U. S. Treasury, and both are paying less than a 10-year U. S. Treasury. The reason is inflation; right now, it’ s higher than we’ d like to see. Consequently, investors want a real rate of return on their money— something above the rate of inflation. The Federal Reserve is struggling with what to do. The complicating factor is a weakened labor market: lower job creation numbers and fewer people available in the labor force. Lowering interest rates could spur further inflation, which isn’ t good for retired folks. If the government raises rates, it could cause an increase in unemployment.. Remember that when the Fed makes an adjustment, the only immediate impact you’ ll see is what you’ re getting paid for your deposits. There’ s a direct correlation. The point is, the five- or 10-year borrowing rates could go in either direction. Ideally, what you want from a lender is an offer letter that ties your interest rate offer to a published index, like the five- or 10-year Treasury. This creates transparency. If a few months lag between the time you’ re approved and the time you’ re ready to break ground, at least you’ ve got an independent view of what’ s happening with the interest rate.
Jeremy Moore: I think Dan is fundamentally right. I’ m seeing a lot of differing opinions and tensions on both sides trying to pull interest rates in one way or the other. Even short-term rates seem to be coming down, which will affect your savings rates and any floating rate you’ ve got. Long-term rates are stable to up a little bit. The mistake I’ m seeing lately is that institutions— including churches— are waiting to borrow money because they think rates will go down. I think that’ s a bad bet; I think the combination of all the uncertainty makes it unlikely. Add to that the fact that construction costs a year from now are also likely to be higher than they are today, and the cost of waiting really can get expensive.
Sandy McClure: Are you seeing any interest rate swaps?
Jeremy Moore: Yeah, we’ re still seeing a lot of that in the market. Depending on what your goals and objectives are, it might make sense. That’ s a whole other talk for another day.
David Lee: What I’ d suggest is shock-testing your loan. How would an additional 1 % or 2 % increase in your loan rate affect your budget? Could you manage that increase? If not, how would you adjust your budget? Here’ s a simple way to think about this— a 1 % increase for every $ 1 million on your loan will increase your interest expense $ 10,000 annually. Knowing this early may allow your church to adjust accordingly. When building savings, the priorities of the ministry are going to supersede all other criteria. As you try to balance safety, liquidity and yield, your ministry’ s funding needs should dictate the priorities. If you need access to capital, then regardless of what return you’ re receiving in your deposits, liquidity and access are of utmost importance. Overall, I think churches need to ensure their loan and investment decisions are in alignment with their church’ s mission.
TECHNOLOGY & TOOLS
Q: How do you see technology shaping the future of church finance and administration, particularly AI?
Michael Blanton: AI is one of the most interesting things church leaders are thinking through right now, both in terms of philosophical and human impact. I definitely think it’ s going to shape a lot of administrative activity moving forward. Software in general has always been about automating processes to free up time for humans to do more strategic work. AI will be the same. It’ ll probably do it in different ways. Today it’ s being applied to things like error detection in finance and accounting systems. I think AI will be really impactful for small church finance teams, many of whom don’ t have deep accounting experience. How much easier might it be to interact with your systems if they’ re pulling in AI? If they’ re building reports using your questions and prompts in your natural language, or just chatting to the system, verbally, about what’ s overdue right now in terms of invoices to vendor XYZ. You could be asking things like, What do I need to be concerned about regarding our cash flow over the next three weeks? Those capabilities are pretty close to happening for Sage, and that’ s exciting, especially for smaller church finance teams.
Sandy McClure: Even if you’ re not ready to use AI, now is the time to start training yourself on how to ask the questions and write prompts. AI looks at trends, explains fluctuations, and gives your team members confidence as they investigate. For instance, I found an instance that accumulated depreciation didn’ t roll. Why not? Well, we found fraud. It took me four hours to dig into the 500 entities and figure it out, but it would be an easy catch for AI. On the other hand, people have fed their policies into the system so AI can tell them if those policies are being followed. If no exceptions, it can auto-approve. My reaction was, whoa— because I like to be in control, to see people’ s names, who approved what. Using AI will be tolerance-based. It’ s proving helpful, especially for analysis, in the church finance office.
Denise Craig: Yes, thank you for that, Sandy. You know, I recently heard somebody say that many people are worried that AI will take their jobs. But the reality is that their jobs might be taken by people who are using AI whereas they aren’ t. To me, that’ s the more probable reality.
18 CHURCH EXECUTIVE | NOV / DEC 2025