When it comes to church budgets, the writer of the book of Ecclesiastes got it right. There are different seasons. Although this line isn’t in chapter 3, it seems like a time to reduce and a time to increase should be a part of it. Seasons of increase are exciting, fun, and filled with hope, but budgeting during times of increase can also be stressful. Maybe even more so than reducing the budget. An increase requires a different mindset. It forces you to answer questions like what should we do? What is the best way to invest in accomplishing the church’s mission? Pay down debt? Increase Savings? Increase Ministry? Increase Compensation? Don’t worry. Take a breath. It is going to be okay. It is a blessing. In my experience, most churches have more needs and dreams than they have the budget to fund them. And budgeting is not meant to be done alone. Prioritization is the key to determining how best to allocate the increase in budget dollars to fulfill the mission and vision of your church, and the financial team is instrumental in this process. While there are too many variables to cover all scenarios, here are a few tips to help decide how to distribute the increase in the church budget.
Placing needs at the top of the list may seem obvious, but before funding any of the wants, be sure to evaluate the church’s needs first. This list includes mortgage or rent, utilities, insurance, catching up on delinquent invoices, replacing failing or broken equipment, addressing safety hazards, and potentially personnel. Here are a few questions to help. Is the roof leaking? Are bathrooms closed because of plumbing issues? What about the mechanical, like the HVAC units? Is the playground safe? Is it time for the new curriculum in children’s ministry? Needs include anything essential to operating the church that went into a state of purposeful neglect.
Sometimes it can be hard to tell a want from a need. For example, if the audio equipment in the worship center is old but functional. Repacing it may be more in the want category than the need, and a sinking fund may be more appropriate to take on this project. Updated paint or flooring is a want. Tires and repairs for the church van are a need, but a new church van probably falls into the want category.
Wiping out debt should always be a priority. And other than a mortgage, your church should not have any debt. If it does, prioritize getting out of debt. When possible, attack the mortgage, but be sure to cover all other basic expenses before adding to the principal to pay down the loan.
If your church is in a season of growth and the income exceeds the budgeted amount, this is a time to rejoice, seek wisdom, and invest in growing God’s kingdom. Oddly, this blessing often becomes stressful because of the importance of managing the resources entrusted to your church. Don’t let the stress overtake your budgeting process. Instead, prioritize the needs and wants in your church. Address the most pressing needs in your church first, and when able, move on to the list of wants. Finally, develop a plan that eliminates all non-mortgage debt first, and as the income allows, attack the mortgage by making additional payments to the principal.