10.1 - Risk Management and Christian Stewardship

by Scott Selman

All this is from God, who reconciled us to himself through Christ, and has given us the ministry of reconciliation.
2 Corinthians 5:18 (NRSV)

Risk management is an important part of Christian stewardship that is easy to ignore. Christian stewardship is the total care and management of God’s creation, and risk management is the intentional effort to minimize the effect of conflict on God’s creation. Local churches practice risk management by reducing the likelihood that unfavorable events will occur, and by minimizing the financial consequences of unfavorable events. Thus, risk management ultimately enables local churches to be better stewards of their financial resources.

Conflict

It is important to remember that conflict will always be present. However, effective risk management enables local churches to care for people, protect their assets, lower the frequency and cost of litigation, promote church credibility, and help sustain the financial stability of the church.

Conflict usually involves several persons, a disagreement, and a procedure for making decisions. Every action taken by a local church includes the possibility of conflict. Therefore, an effective program of risk management should include training for all church leaders in how to prevent and/or resolve conflict. Dealing with conflict should lead to reconciliation and transformation. For more information on training opportunities and how to address church conflict, visit JustPeace online at www.justpeaceumc.org.

Crisis Management

A critical function of risk management concerns the handling of a crisis at the local church. A crisis is a situation that may cause everything the local church stands for to be questioned and under great scrutiny. A crisis almost always occurs without warning and may include significant interest by the news media.  

Churches should respond to a crisis in a timely manner and in a positive way. At a minimum, local churches should show their concern about what happened, communicate what is being done about the situation, and share information about any measures that are planned to prevent the situation from happening again. An excellent publication entitled Not If, But When is available for $10 from United Methodist Communications at 1-888-862-3242 (toll free).

Loss Prevention

Another important part of risk management is loss prevention. Every local church should develop loss prevention policies, create a list of probable risks, and take steps to minimize risk and reduce the seriousness of any potential incident. Loss prevention policies should consider many areas, including, but not limited to:  safety, fire prevention, theft, security, employment practices, sexual misconduct, child abuse, counseling, and screening of volunteers.

Creating a list of probable risks will enable a church to focus on the most important areas of concern. The risks will vary from church to church because every church has property and special ministries. A local church self-inspection checklist prepared by the General Council on Finance and Administration is available in the Conference Treasurer’s office.

Taking steps to minimize risk and reduce the seriousness of a potential incident may be the hardest part of loss prevention because it requires a local church to consider specific areas of risk, determine how risks can be reduced or eliminated, and make decisions based on the assessed risks.