We previously asked church leaders about the following situation:
Many pastors enthusiasm for the annual rite of preparing a church budget is on a par with wanting a root canal. They realize that its important, but dont look forward to the pain that it exposes.
Budget. Say the word and church members eyes glaze over and leaders try to change the subject. Accountants might feel differently, but theyre usually in the minority.
In reality the process of assembling an annual budget is probably the most opportune time for church leaders to come together and share what they believe is Gods plan for their church, both in the resources he will make available and in how best to use those resources. If such a meeting is handled well and bathed in prayer, two, or at most three, goals for the church should emerge. Too many goals should be avoided or else a dilution of purpose will creep into the process. Regardless, involving leaders at all levels to discover Gods agenda for your church can go a long way towards building an environment of accountability, trust and unity.
Department leaders should then meet with key people within their department to determine departmental goals that complement the churchs overall goals. If previous budgets have been based on line items from the churchs chart of accounts then it will be all too easy at this stage to repeat the process and start filling in dollar amounts for each line item. Instead, the chart of accounts and its line items should be set aside for the time being.
As departmental goals are discussed, resources needed to achieve each of those goals should be listed. Included in that list of resources should be the necessary dollars for staff involvement and oversight and anticipated expenses required for success. If the goal is important enough to be listed then its important enough to fully resource. Partial resourcing will most likely lead to something other than complete success.
During the process of goal setting it is easy to overlook what goals are currently being worked on, and need to continue. Setting goals for worthy ongoing programs should be included, not just new, shiny ones. Even those line item totals we earlier said to set aside can serve to jog ones memory about whats still important.
While your departments are coming up with their list of departmental goals your Finance Team should be prayerfully considering what they anticipate giving will look like during the coming year. They will want to review past giving trends but they will also need to consider the growth of the congregation, both numerically and spiritually, in arriving at a recommendation for a total budget.
Before your designated budget team reviews the departmental goals they need to take your Finance Teams forecast and reduce it by the total anticipated cost of your churchs essentials. Essentials include expenses such as mortgage payments or rent on your facilities, utility costs (being sure to factor in any anticipated rate increases), maintenance costs (including janitorial costs), and insurance premiums. The resulting number is what is available to achieve the churchs overall goals for the coming year.
Next the budget team starts to prioritize the various departmental goals, sizing them up against the churchs overall goals. This is probably the hardest, most time-consuming step in the whole process, but if done prayerfully, has the potential of generating genuine excitement during the Annual Business Meeting to approve the budget.
As the departmental goals are listed by priority, the monetary resources needed to achieve them are listed alongside. And as the list grows, a running subtotal is kept of the requested funding. Once the list is completed its quite likely the total amount of money needed to accomplish all of the departmental goals will exceed the amount available. At the point on the list where the subtotal of requested funding for the departmental goals is less than the amount available a line should be drawn. Departmental goals above the line get fully funded. Any departmental goal below the line do not. Any excess funds can be allocated for emergency needs that may arise during the year or towards funding long-term needs like replacing the carpeting, or the roof, or HVAC equipment.
This may seem a bit harsh at first, but using this process will help church leaders clarify which ongoing ministries do the best job of meeting present needs of the congregation and its community. It will also help leaders understand whether any new ministries are needed or if some need to be re-configured to adapt to the present environment. Lastly it may show that there are some ministries that need to be celebrated and brought to a dignified conclusion.
The first one or two years after your church moves from a line item form of budgeting to one that is goal oriented may cause some previously well-funded departments to wonder how come their budgets took a hit. If theyve been continually operating quasi independently of the church, they will come to learn that departmental budgets are now determined by how well they contribute to the overall churchs success.
If you recall, we mentioned earlier that costs for achieving departmental goals should include costs for staff involvement and oversight. Once the master list of prioritized departmental goals has been finalized, the churchs staffing requirements may need to be re-assessed. Perhaps the only change will be in having staff members who are under less stress because with fewer projects to oversee, they will not be spread as thin as before.
Remember our comment above about generating excitement at the Annual Business Meeting? Now instead of listing amounts line item by line item for your membership at the meeting, you can share with them the mission goals that your church intends to strive for and achieve during the coming year. Such an approach will create a much greater emotional connection for your people. Who knows, they may even increase their support!
In Jeremiah 29:11 we read,
For I know the plans I have for you, declares the LORD,
plans to prosper you and not to harm you, plans to give you hope and a future.
If God says that he has plans for us, shouldnt we as church leaders be obligated to seek to learn of those plans and align our churches mission plans and vision with his? Granted, this is easier said than done so take a moment and consider the origins of this passage. Its from a letter the prophet Jeremiah sent to the exiles living in Babylonexiles who had been forcibly taken there by Nebuchadnezzar. Given their circumstances dont you think that they could have just as easily doubted the message as found hope in it?.
Fortunately God included a promise, for us as well as the exiles. If we read on in verse 13 it says,
You will seek me and find me when you seek me with all your heart.
Are we missing out on blessings as a church because we arent willing to invest the time and effort to seek God and learn of his plans for each of his churches?
If you would like help in transitioning your budget process to one that helps your leaders proclaim a vision for your church to your people, call us.
Please Note: This information is provided with the understanding that Church Administrative Professionals is not rendering professional advice or service.