Budget season is upon us. Most churches budget on a calendar year basis. Meetings begin in September and October to finalize the budget before Christmas.
Churches are adapting with new ministry paradigms. Many congregations recently added digital strategies. There is a renewed focus on getting people back into groups. Adopting and fostering churches is becoming more commonplace.
As you attempt new ways of doing ministry, don’t fall back into an old budget template. You can’t resource new ministry paradigms with lagging budget practices. Before jumping into the 2022 budget process this year, consider these areas you might be missing.
Start with revenue first, not expenses. Far too many churches budget expenses first. Then they try to adjust expected revenue. The better approach is to forecast revenue and then adjust expenses to match.
Stop making all expenses equal. Most churches have fixed costs like personnel expenses, building and utility expenses, and other items like insurance. After determining a revenue figure, budget fixed costs before variable costs, then make a priority list of variable costs. For example, you should not cut debt service expenses (fixed cost) to make room in the budget for more bouncy houses at Fall Fest (variable cost).
Examine paid positions that should move to volunteer roles. Do you really need every paid musician? Does the librarian need to be a staff position? Can you outsource certain maintenance roles? In some churches, these paid positions may be warranted. In many churches, they were put in place years ago and never examined again.
Do not under-invest in children’s ministry and student ministry. Is your children’s minister the lowest paid ministry team member? Does your student ministry budget match your worship budget? It should not be easier to cut your children’s budget than your technology budget.
Reverse the slow erosion in missions. Cutting missions is a below-the-radar trend in church budgeting. It’s an easy area to cut because most church members will not feel the effects. A good rule of thumb is ten percent of the budget should be dedicated to local and international missions.
Do not underestimate hospitality. Few people will vie for more funds in the hospitality budget. In fact, some may even scoff at what is spent on guest cards and coffee. Long-time church members rarely notice poor hospitality. But then they wonder why guests are not returning. The hospitality budget is a long-term investment. Do not underestimate its importance.
Do not forget to budget for deferred maintenance. Every church should budget for the normal rate of deterioration of the campus. Almost no church includes this area in the budget. Here is the problem: Every $1 in deferred maintenance costs $4 of capital renewal needs in the future. You rob the future of your church when you do not budget for deferred maintenance.
This year is the opportunity to update your budget processes. Don’t miss these important items.
Posted on September 22, 2021
As President of Church Answers, Sam Rainer wears many hats. From podcast co-host to full-time Pastor at West Bradenton Baptist Church, Sam’s heart for ministry and revitalization are evident in all he does.
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2 Comments
These recommendations are very reasonable but I take a little exception first and would recommend defining mission first.
Routine maintenance is an underappreciated item for Churches. Because no one “owns” the equipment/item (the church does but not a single person) “someone else” is looking after the maintenance. Or worse, “we don’t need to spend $300 annually for an HVAC maintenance contract because it works just fine” is way too common. Realistically, whether members know it or not, newcomers do see the maintenance issues – whether they realize it or not.