7 key considerations for religious organizations this year: Governance, Risk, and Financial Stewardship

Religious organizations continue to operate in an environment shaped by changing donor expectations, evolving workforce models, and increasing demands for transparency and accountability. For finance leaders and boards, these shifts affect accounting judgments, audit readiness, and long-term financial sustainability. As organizations look to the future, the following seven considerations remain especially relevant.

Faith-Based Investing and Fiduciary Oversight
Faith-based investing remains an important tool for aligning financial resources with mission and values. Strategies may include excluding certain industries, prioritizing specific social outcomes, or engaging in shareholder advocacy.

At the same time, boards retain fiduciary responsibility for managing investments prudently. Auditors are increasingly attentive to whether investment strategies are clearly documented and consistently applied, particularly when portfolios differ from traditional benchmarks.

Organizations should ensure that:

• Investment objectives and screening criteria are clearly documented

• Risks related to concentration, liquidity, and returns are understood

• Disclosures accurately reflect investment strategy and oversight

Clear documentation demonstrates thoughtful decision-making and sound governance.

Board Composition, Governance, and Financial Literacy
Strong governance remains central to effective stewardship. As organizations grow more complex, boards are increasingly expected to understand financial statements, key risks, and internal controls well enough to provide meaningful oversight.

Auditors often look for evidence that boards are actively engaged in financial oversight, rather than simply approving results after the fact.

Helpful practices include:

• Recruiting members with finance, compliance, or operational experience

• Using advisory groups to develop future board leaders

• Providing periodic education on nonprofit financial reporting

Boards that understand the financial story are better positioned to ask the right questions and support sound decision-making.

Reassessing Employee Benefits and Long-Term Obligations
Rising costs and competitive labor markets continue to prompt organizations to revisit employee benefit programs. Increasingly, this reassessment is driven by data rather than assumptions.

Employee surveys and benefit utilization analyses can reveal which benefits employees value and use. In many cases, organizations find that some long-standing benefits are underutilized, while others are highly valued but under-resourced.

Finance leaders should consider:

• Whether benefit offerings align with current employee needs and preferences, informed by surveys and usage data

• Opportunities to sunset or redesign underutilized benefits without adversely affecting employee satisfaction

• The long-term sustainability and financial statement impact of pension, healthcare, and other post-employment obligations

When handled thoughtfully, benefit changes can support both financial sustainability and employee trust.

Revisiting Gift Acceptance Policies
As donor giving methods evolve, gift acceptance policies should evolve as well. Contributions of cryptocurrency and other digital assets are now more common, yet many organizations still lack clear procedures for accepting, valuing, and liquidating these gifts.

Clear, board-approved policies help organizations respond appropriately while reducing operational and financial risk.

Best practices include:

• Defined acceptance and valuation procedures

• Clear acknowledgment and documentation requirements

• Identified processes or vendors for liquidation, when applicable

Planning ahead helps prevent missed opportunities or avoidable complications.

Hybrid and Remote Workforce Implications
Hybrid and remote work arrangements are now a permanent feature for many religious organizations. While this expands access to talent, it also introduces accounting, tax, and compliance considerations.

Finance leaders should consider whether:

• Changes in office space needs warrant downsizing, restructuring leases, or subleasing unused space

• Internal controls over financial processes remain effective in a remote environment

• Policies and documentation reflect how work is actually performed today

• Payroll systems are capturing the proper state of the employee for withholding purposes.

• Organizations periodically reassess assumptions to ensure financial reporting reflects how work is actually performed today.

Technology, Cybersecurity, and Data Governance
Technology plays a central role in financial reporting, donor management, and internal controls. Systems put in place quickly during the pandemic may no longer meet current needs.

Auditors are paying closer attention to IT controls, system access, and cybersecurity risks, especially in decentralized or remote environments.

Finance leaders should work closely with IT to:

• Confirm systems support appropriate internal controls

• Review access and segregation of duties

• Understand and communicate material technology-related risks

• Technology decisions increasingly affect financial, operational, and reputational outcomes.

Diversified Funding Opportunities and Financial Resilience
Many religious organizations are placing greater emphasis on diversifying funding sources as part of long-term financial planning. Rather than relying heavily on a single revenue stream, organizations are evaluating a mix of contributions, program revenue, investment income, and other sources.

Diversification introduces opportunity, but also complexity. Different revenue streams may fall under different accounting guidance or carry distinct restrictions.

Finance leaders and boards should consider:

• Revenue concentration risk and vulnerability to economic shifts

• Appropriate accounting treatment for contributions and exchange transactions

• How donor restrictions affect liquidity and planning

• Whether systems and staffing can support new funding models

Diversification works best when it is intentional. When funding strategies align with governance and financial capacity, organizations are better equipped to navigate uncertainty while maintaining transparency and stewardship.

Looking Ahead
Taken together, these considerations provide a practical roadmap for finance leaders and boards. Regularly revisiting risks, policies, and funding strategies can help religious organizations adapt to change, strengthen accountability, and support sustainable mission delivery while honoring the trust placed in them by donors, congregations, and communities.