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Recognizing Opportunity Costs in a Church Budget

by Bob Santy ·  3 min read  ·  January 28, 2022

Recognizing Opportunity Costs in a Church Budget

My wife and I are entering the empty-nester stage of life, but that doesn’t mean our days of parenting are over. The fact that my dad is 86 and still worries about me and gives me advice proves that parenting never really ends. And that’s okay because one of the greatest joys in my life is being a dad. As we watch our daughters launch into their careers and begin living their lives independent of us, they are starting to see things differently. We’ve heard them groan, on more than one occasion, how they will never own a home. As they make this claim, my wife and I can list all of the trips they’ve been on over the last couple of years. They reply that they want to experience new places and go on adventures. Experiences and adventures are great, but they aren’t free. They are dealing with what is known as an opportunity cost. An opportunity cost is when you understand what you are giving up to go after something else. In this scenario, my daughters’ actions show that experiences and adventures outweigh saving for a home – at least for now. It’s not a question of right or wrong; it is a matter of understanding the opportunity lost by choosing other options. Opportunity costs abound when crafting a church budget. A church can budget for additional staffing, but that may be at the expense of something else, like raises for existing staff, increasing missionary support, or funding a local outreach project. Since these are all good things, determining the opportunity cost becomes difficult. When presented with too many good options, running them through the grid of mission, vision, and values will help clarify the choice. 

Mission 

The mission is the reason behind any organization’s reason for existence. Unfortunately, drifting away from that reason happens in churches and other religious organizations. Harvard University is a great example. When established in 1636, the university’s intent was the training of Christian ministers. Today, Harvard’s mission is “to educate the citizens and citizen-leaders for our society. We do this through our commitment to the transformative power of a liberal arts and sciences education.” I’m not picking on Harvard. I’m making a point about the danger of mission drift. Sometimes an opportunity can come along that seems too good to pass up. When determining the opportunity cost, evaluating if it advances the Church’s mission is the first step in the process. 

Vision 

If the mission is the reason an organization exists, then the vision is the ideal end state of the organization. It is the inspiration to forge a path to carry out the mission. If the mission of the church is to make disciples (outreach) and teach them to follow all that Jesus commanded (discipleship), then the vision is how we, the Church, can participate with God to make it happen. When evaluating an opportunity cost for the budget, consider if it fits within your church’s vision. Will the opportunity inspire others to become followers of Jesus or deepen their faith? What is lost choosing one option over the other? Will your church look more or less like what you envision when choosing one option over the other? 

Values 

Values are like a compass to guide and direct the organization. Values for a church could include a heart for families with special needs, reaching the under-resourced in the community, discipleship for teens, etc. After passing the opportunities through the mission and vision grid, use the church’s values to guide the decision. Does one of the opportunities have a closer alignment with your church’s values? 

When building a church budget, there will never be a lack of excellent opportunities presented. Analyzing the opportunities through the grid of your mission, vision, and values provides a clear indication of the opportunity cost of each. It could be as simple as deciding that a trip to Hawaii has a higher opportunity cost than saving for a home. 

Filed Under: Nonprofit Tagged With: church budget

By Bob Santy

Executive Pastor of Operations at Sunridge Community Church in Temecula, CA, an independent, non-denominational church that is passionate about it's mission of helping people find and follow Jesus.

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