Effects of financial literacy levels of church leaders on funds management of start up church organizations

Abstract

The regulation of church finances has proven to be difficult for governments and their respective regulatory bodies all over the world. The same is notable in Kenya as regulators and policymakers struggle to draw the line between the nature of religious organizations and their evident financial operations that keep growing as the number of believers’ increase. The fact is that policies and regulations are based on the infrastructures provided by the academic levels of knowledge within a specific field. Whereby, to financially regulate churches, there must be a screening to determine which levels of academic literacy can be considered the base line for the creation of adequate structures for policies for this purpose. Therefore, the study sought to investigate the effects of the different levels of financial literacy on fund management of start-up churches. The study was guided by three specific objectives: firstly, to analyze how the advanced levels of financial literacy affect fund management of start-up churches in Kasarani Constituency. Secondly, to evaluate the efficiency of the intermediate levels of financial literacy church leaders fund management of start-up churches and finally to access the extent to which the beginner levels of financial literacy church leaders affect the fund management of start-up churches. The researcher adopted the descriptive design. Through the multistage sampling approach, the respondents—church leaders—were taken from 20 different and distinct churches within the same county. Then Strata groups were used to categorize respondents. The first strata group consisted of the 3 levels of the organization’s management (Table 3.5.1), the sub- strata groups consisted of the 3 levels of financial literacy (Table 3.5.2) which provided the actual respondents. The number of respondents was of 139 church leaders who manage and oversee church organizations that have less than 5 years of operation since conception. Primary data was collected using a structured questionnaire, while secondary data was collected through journals, articles, internet searches and censuses. The data collected was processed through the Statistical Package for the Social Sciences application, and the findings were analyzed and presented using figures and tables. The findings revealed that advanced levels of financial literacy among church leaders positively influenced fund management for start-up churches, whereas the intermediate or the beginner levels showed no significant impact. The study was grounded in the theory that behaviors and practices, rather than academic knowledge alone, shape leadership effectiveness. Despite the importance of financial education, the findings underscored the significance of contextual factors. the study suggested further examination of the intermediate level's influence on fund management, given the potential sampling errors. Recommendations included prioritizing advanced financial education for church leaders, advocating for tailored financial management courses, and emphasizing the importance of behaviors and practices in fund management. It was also suggested that future research should focus on refining measures of financial literacy and exploring the role of academic qualifications in the enhancement fund management accountability.