4 Essential Practices for Ministry Success in 2025
By America Kimlinger
As we move into 2025, ministries are gearing up for an essential administrative task: filing Form 990. With deadlines fast approaching, timely submission is crucial to avoid costly penalties. In this blog, let's focus on the internal practices influencing your ministry’s governance and management year-round. These practices go beyond simply filling out a form—they are key to maintaining compliance and ensuring your ministry runs smoothly.
Form 990, especially Part VI, delves into important governance questions that can significantly affect your ministry’s tax-exempt status. These questions aren't just routine; they provide insights into the health and integrity of your ministry's leadership and operations. Here are four critical areas for ministries to prioritize in 2025 to strengthen governance, enhance management, and foster a thriving ministry.
1. Building an Effective Board of Directors
The board of directors is the backbone of any ministry, providing oversight, leadership, and guidance. Section A of Part VI of Form 990 asks specific questions about your ministry’s board, including the composition of the governing body and whether it has independent members. According to IRS Publication 4221-PC, it's essential to prevent insider transactions that could misuse charitable assets, so a significant portion of the board should not be composed of employees or family members.
Action Step: Ensure your board includes independent members who can bring fresh perspectives and avoid conflicts of interest. Employees or relatives should not dominate a well-rounded board, and it’s crucial to have diverse voices represented. If you’re unsure about the makeup of your board, seek advice to ensure compliance with IRS guidelines and to avoid complications during the Form 990 filing process.
2. Maintaining Detailed Board Meeting Minutes
Board meeting minutes are more than just a formality—they are critical documentation of your ministry’s decisions and actions. Question 8 in Section A of Part VI asks whether your ministry properly documented meetings and actions taken by the governing body and any committees. In essence, board meeting minutes are a receipt for ministry decisions, proving that proper procedures were followed.
Action Step: Take accurate minutes at every board meeting. Make sure these minutes are reviewed by the board and officially approved by vote. Properly documented meeting minutes can protect your ministry from potential challenges and are essential for keeping everyone on the same page.
As we often remind pastors - "A board meeting without minutes is just fellowship."
3. Keeping Accurate Financial Records
Form 990 includes questions about your ministry's financial health and transparency, especially regarding how donations are managed. Good financial record-keeping isn’t just about staying compliant with tax law; it also ensures your ministry uses its resources effectively to further its mission. Poor financial practices can lead to significant consequences, including the loss of tax-exempt status.
Action Step: Commit to regular, accurate bookkeeping. Whether you handle finances in-house or outsource them to a trusted provider, ensure your financial records are consistently maintained and easily accessible. Consider using accounting software designed for ministries or partnering with a bookkeeping service like StartCHURCH Bookkeeping to stay on top of your financial records year-round.
Pro Tip: Managing ministry finances can feel overwhelming, especially as your ministry expands. That’s why StartCHURCH Bookkeeping Service is here—to help you keep your financial records accurate and organized. With our support, you can focus on your mission, confident that compliance is handled.
4. Implementing Strong Policies and Procedures
Although the IRS doesn’t mandate specific policies or procedures, it strongly encourages ministries to adopt them to enhance compliance and governance. Without these policies, you risk misunderstandings, financial mismanagement, or even jeopardizing your tax-exempt status. Clear, written policies help ensure your ministry operates consistently, ethically and fully complies with the law.
Action Step: Develop and implement policies and procedures that align with your ministry’s unique needs. These policies should reflect your mission and guide daily operations while ensuring compliance with tax laws. StartCHURCH’s Policy Suite offers 55+ customizable policies designed for ministries of all kinds, helping you build a solid legal foundation.
Building a Solid Foundation for Your Ministry
Running a successful ministry involves more than just checking off administrative tasks—it takes intentionality, commitment, and a strong legal foundation. By focusing on the governance, financial, and operational areas that influence your Form 990 filing, you’re setting your ministry up for success in 2025 and beyond.
If you’re unsure about how to strengthen these areas or need help filing your Form 990 accurately and on time, StartCHURCH is here for you. Our team of experts is ready to guide you through the process and provide the tools you need to keep your ministry compliant, effective, and thriving.
Need assistance? Give us a call at 770-638-3444 and we’ll help you set your ministry up for long-term success.
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