John McGovern wrote “Chapter 6: Risk Management” for A Pastor’s Toolbox. McGovern, a CPA with a practice specializing in church accounting, argues that experience should make a pastor not want to run risks, but to “manage” them. He begins with general principles about risk management:
- Good fences make good neighbors.
- An ounce of prevention is worth a pound of cure.
- Controlling risk will not make you friends.
- Risk management is a form of stewardship.
- Be aware of “third parties” who might initiate lawsuits.
McGovern lays out three kinds of risks: legal, financial, and “general,” along with common-sense strategies for avoiding them. To avoid legal risks, for example, McGovern recommends an annual inspection of facilities and regular maintenance, well-considered human resource policies, and strict observance of tax laws in regard to contractors employed by the parish.
Financial risks can be minimized by means of sound financial controls, the wise use of budgets, and fair tuition practices in the parochial school. McGovern’s good advice may seem overly strict to those who have not faced a problem. Taking the advice may ensure that they will never have to face it.
