The Boring Month That Saves Your Church: Governance Before You Break 100

Let me tell you about two churches, because you have probably seen both.

Church A launched with everything you would want: good preaching, real community, people who loved each other. What it did not have was a foundation. It never incorporated. Money ran through the pastor's personal account. There were no bylaws and no board. Then, at 80 people, a founding family left offended. They took a third of the congregation with them and claimed the church "owed" them for donated equipment. With no structure and no documentation to point to, the disagreement became a lawsuit. Within a year, the church folded.

Church B spent its first month on the boring stuff. It incorporated, filed for 501(c)(3), drafted simple bylaws, opened a church account, and set up basic financial controls. When it hit a conflict at that same 80-person mark, the bylaws gave everyone a clear process. The structure shielded people from personal liability. The records showed integrity. That church is now over 200 and planting others.

Same passion. Same size when trouble came. Opposite outcomes. The only difference was the foundation. I know you got into ministry to preach, not to file paperwork. But if you want to break 100 and stay healthy, this is the cheapest insurance you will ever buy.

Think of it as building walls around the ministry

Governance is not glamorous, but it is protective. Here are the core ideas, in plain language.

Incorporation means liability protection. When you incorporate, the church becomes a legal entity separate from you personally. Liability generally stays with the organization, not with your house, your car, or your savings. Without it, you and the church are legally the same person.

501(c)(3) is automatic, but get the letter anyway. Under IRS rules, churches are automatically tax-exempt without applying. So why file? Because a determination letter removes all ambiguity, reassures major donors and banks, and unlocks many grants. One important note: tax-exempt status alone is not enough for the Google Ad Grant. You need your own IRS determination letter (or documented coverage under your denomination's group exemption), validated through Goodstack.

Bylaws are your peacetime operating rules. They settle, before any conflict, who decides what, how leaders are chosen and removed, how disputes get resolved, and how the bylaws themselves change. Good bylaws prevent both extremes: a faction grabbing power you never gave them, and a pastor with unchecked power making unaccountable decisions.

Governance gets smaller as you grow. A helpful principle: the larger an organization becomes, the smaller its governance needs to become. A 45-person church can invite everyone to a voters' meeting. An 800-plus church needs a single board of 5 to 12 people. For you under 100, start with a small board of 3 to 5, keep congregational votes to the truly major decisions, and build in a path to add leaders as you scale.

Insurance is a necessity, not an expense. General liability is your baseline. Later you add property and contents, directors and officers coverage, workers' comp once you have employees, and sexual-misconduct liability (which insurers usually grant only if child-protection policies are already in place).

Financial controls are governance too. A dedicated church bank account, dual check-signing over a threshold, two-person offering counting, and regular reporting protect the church from both theft and false accusation.

What it actually costs

Here is the part that surprises pastors: this is affordable.

Incorporation filing runs about $25 to $300 and takes 1 to 4 weeks through your state's Secretary of State.

An EIN is free, filed online, and takes about 15 minutes.

If your gross receipts are $50,000 or less and assets are $250,000 or less (which covers most plants), you can use the simpler 1023-EZ for $275, with a determination letter usually in 2 to 4 weeks. The full 1023 is $600 and takes 3 to 6 months or more.

General liability for a small church typically runs $1,000 to $3,000 per year.

Optional attorney or accountant help runs about $500 to $2,000.

Insurers who specialize in churches include NetMinistry partners in the church space. Confirm the specifics with your insurer.

The playbook, in order

Do these five before or right at launch:

Incorporate as a nonprofit or religious corporation in your state. File Articles of Incorporation with your legal name, purpose, registered agent, initial directors, and the required non-distribution and dissolution language.

Get your EIN (free, online). You need it to open a bank account.

Open a dedicated church bank account in the church's legal name. Never run church money through a personal account, because commingling can pierce the corporate veil and erase your liability protection.

Get general-liability insurance in place at minimum.

Adopt simple bylaws, starting from a vetted template, customized and adopted by your initial board.

In your first six months:

File for 501(c)(3) recognition (1023-EZ if eligible) to get your determination letter. You will need it for the Google Ad Grant and most foundation gifts.

Set up basic bookkeeping and controls: dual signatures over a threshold, board approval for large expenses, two-person offering counting with a signed sheet and deposits within a day or two, and monthly statement review by someone other than the bookkeeper.

Add coverage as you add risk: property, directors and officers, abuse liability, and workers' comp once you pay anyone.

As you grow, expand the board along the path your bylaws define, and keep congregational votes limited to the big ones: calling or removing the senior pastor, buying property, the annual budget, and bylaw amendments.

Please verify the specifics with a local attorney, your state Secretary of State, and your insurer. This is general guidance, not legal advice.

Where this fits your milestones

On the road to 25, do those immediate five. On the road to 50, file for the 501(c)(3) determination letter, which unlocks grants and the Google Ad Grant, and stand up your two-person offering count. Not sure where your foundation stands right now? The assessment will show you the gaps, and the tools can walk you through the sequence step by step.

Your challenge this week

Open your church's file (or start one) and check the single most important item first: do you have a dedicated church bank account in the church's legal name, with no personal-account commingling? If yes, confirm your two-person offering-count procedure is written down. If no, block one hour this week to get the EIN and open that account. It is the wall that everything else leans on.