Church Planting Financial Guide

This is the first step because it is required to bring the church into legal existence. Registration typically happens with the Secretary of State, though some states handle it under a different department. Wisconsin, for example, uses the Department of Financial Institutions. Hawaii uses the Department of Commerce and Consumer Affairs.

This step generally only requires Articles of Organization, sometimes called Articles of Incorporation. The standard legal entity for American churches is the Corporation. Some states now offer a one-stop setup that registers the new church for withholding tax and labor accounts at the same time as the entity formation. A filing fee of a few hundred dollars is typical.

An EIN is a nine-digit number issued by the IRS to uniquely identify your organization. Yes, churches are exempt from paying federal taxes. But if your church plans to collect money, disburse funds, or open a bank account, you need an EIN.

With the right information in hand, this can be done in about 30 minutes. You'll need your Articles of Organization plus the name, address, full SSN, and formal title of the primary church leader. The rest is fairly standard.

Your church needs a constitution and bylaws to define your organization, state your purpose, and describe how you will operate. Starting from another church's existing documents can be helpful, but make sure what you end up with accurately reflects your church and addresses everything churches need today.

It helps to understand how these two documents relate to each other:

• Articles of Organization bring the church into legal existence with the state and establish it as a nonprofit corporation. They ensure the church's ability to be recognized as tax-exempt under federal law. They say relatively little about how the church will practically operate.
• Constitution and Bylaws describe in much more detail what the church believes and how it will operate. The modern trend is to combine everything into one Bylaws document, but there is no real legal significance to that choice. Every church needs both sets of provisions covered, regardless of how the documents are titled.

You need two state tax numbers: one for income tax withholding, and one for unemployment insurance withholding. Both are required once you start paying staff.

Here is the part most church planters get wrong: churches are automatically granted 501(c)(3) status under federal law. There is nothing your church has to do to be tax-exempt.

If you want official IRS recognition in writing, you can file Form 1023, but we generally do not recommend it for most new church plants. It adds cost and complexity without changing your legal status. If you do want to pursue it, hire an attorney. Dime can help with that.

Churches do not pay federal income taxes. But pastors do. It is critical that you understand how the church will pay its staff, how the IRS expects ministers to report their income, and when the important filing deadlines are.

This is not something to figure out on April 14th. Find a qualified tax professional before you issue your first paycheck. Dime's tax team works exclusively with churches and nonprofits and handles minister taxes every day. Contact us to get set up now.

Do not skip insurance. Here are the policies every new church plant should get in place:

• General liability — Required to rent almost any facility. Minimum $1 million in coverage.
• Workers' compensation — Required once you have 3 to 5 employees or around 20 volunteers, depending on your state.
• Pastoral liability — Covers claims arising from pastoral activity including counseling. Make sure the policy explicitly covers counseling. Target $500k to $1 million in coverage.
• Sexual misconduct — Non-negotiable. Get at least $1 million and as much as you can reasonably afford.

Once you have your EIN and Articles of Incorporation, you can open a bank account. Keep it simple. In most cases, a checking account and a savings account are all you need to start.

Before you go in, think through who needs full administrative access and who may only need view-only access. Request the appropriate online login levels from the bank when you set up the account.

There are plenty of church management platforms built for tracking people, events, and attendance. When it comes to managing your money, use a platform built for managing money. QuickBooks Online is the right tool for the job.

For most new church plants, QBO Essentials is the right tier. It allows multiple users, which matters for accountability and transparency from the start.

Whether you need corporate cards for staff or a way to reimburse volunteers, BILL Spend and Expense is the platform Dime recommends for church expense tracking. Formerly known as Divvy, it lets you track budgets by category, issue physical and virtual cards, set spending limits, and build approval workflows.

The visibility it gives leadership over spending is especially valuable for a new church that is still building financial discipline and culture.

Payroll does not have to be complicated. Gusto is the platform Dime recommends for church payroll. It handles pay frequencies, hourly and salaried employees, tax withholdings, and W-2s at the end of the year.

For church planters, getting payroll right from day one matters especially for housing allowances and self-employment taxes. If you sign up through Dime, you are eligible for partner rewards. Contact us to get started.

When you are just starting out, tracking and paying bills directly in QuickBooks Online works fine. As your church grows in complexity, BILL adds vendor management, payment approval workflows, and cleaner syncing with QBO.

Do not feel like you need this on day one. Set it up when your bill volume and team size make the extra structure worth it.

Your giving platform should work on any device, including mobile. Recurring giving should be simple to set up for donors. Text-to-give is a meaningful option for a church plant that does not yet have a fully established web presence. The fewer clicks between a donor and a completed gift, the better.

Your giving platform should produce ready-made reports that include monthly and annual giving trends, deposit records, lists of new givers, and gifts by designation. At year end, donor giving statements should be easy to generate and distribute. This is not a nice-to-have. It is how you fulfill your legal obligations to donors and maintain their trust.

Giving platforms typically charge a per-transaction fee, a monthly platform fee, or both. Read the fine print before you commit. Avoid platforms with long contracts or tiered pricing that jumps significantly as your church grows. The right platform will have transparent, flat pricing with no surprises.