As someone who loves to play golf and help others, landing the position of Help Desk Supervisor for industry leader Callaway Golf was a dream come true. I could help people with their technical issues and hit golf balls at lunch. For over eleven years, I spent my lunch hitting approximately 100 balls every Monday through Friday. What I learned from that experience carries over into my role today. Without a target, you’re just wasting your time and energy. Zig Ziglar said it best, “If you aim at nothing, you’ll hit it every time.” This statement applies to church budgets too. Without a method to develop an overall target number, creating a church budget is just a waste of time and energy. Over the last fifteen years, these five steps have helped me create church budget targets.
(This post uses a simple church model based wholly on church donations received during weekend services. Other income, such as rental agreements, fundraisers, coffee shop/cafe, bookstore, or other sources, are not included.)
It does not matter if your church operates on a fiscal year or calendar year, allow four to five months to accomplish the entire budget process. Here’s a sample timeline:
4 Months Out – Cast vision to leaders and provide prior year data
3 Months Out – Determine the budget target – teams work on their budget
2 Months Out – Begin comparing submitted budgets the target
1 Month Out – Refine, adjust, finalize
New Budget Year Begins – Provide leaders with the final budget
Compile Prior 12-Month’s Attendance
Let’s start by acknowledging that attendance can easily be a source of pride. Get over it. Every Sunday, an accurate count is needed for each service in each venue (even live streaming) – no fluff. And, this may sound controversial but do not include children’s ministry or youth ministry in the count – you want to count adults only. Use a spreadsheet (Excel or Numbers) to list the monthly adult attendance total for the last twelve months. Calculate the sum of the last twelve months of adult attendance.
Compile Prior 12-Month’s Giving
Follow the exact same process as calculating the adult attendance total but use giving data instead of attendance. Do not include rental income, book sales, coffee shop sales, etc. Calculate the sum of the last twelve months of giving.
Calculate Attendance Growth Rate
Now it’s time to find the growth or reduction rate. Using the monthly attendance data, calculate the difference between the prior month and average the percentages. Here’s an example using just three months:
July 1,237 (9.46%)
Aug 1,691 (26.85%)
Sept 1,190 (-42.10%)
Growth/Reduction factor = -1.93%
Create The Target
Using the sum of the offering for the last twelve months, multiply it by the growth or reduction factor and add or subtract that number from the twelve-month offering total. Here’s an example:
Twelve-month total of giving = $1,500,000
Growth/Reduction factor = -1.93%
Reduction amount = -$28,950
Budget Target = $1,470,050
A word of caution, certain circumstances can skew the growth/reduction factor. Blindly using this factor could be detrimental to the overall church budget target. For example, if your church is in the early stages of a transition that has the potential for loss in attendance, use that critical information to adjust the factor. This formula is a guide, not an absolute.
Keep the end in mind when creating a budget target. The goal is to have a realistic projection to allocate the funds to accomplish the mission. Putting parameters on the budgeting process for the team provides boundaries, guidelines, refines the focus, and is the responsible thing to do. Operating a church is serious business. These five steps provide a solid foundation to building a church budget target to put your church in a healthy financial position.