In the mid-1990s, I accepted the position of running IT support for a world-class golf manufacturer. I was managing people, budgets, systems, and customers for the first time in my career. It was a bit overwhelming, and I made mistakes along the way. During these formative years as a supervisor, I wanted to prove I could create an effective and efficient help desk. So, I started measuring the team’s ability to resolve their calls without escalating them to the second-level technicians. But, I noticed they took such a long time on each call that it increased hold times in the queue for help. To reduce wait times, I started measuring the length of each call. I then noticed that overall satisfaction with the help desk was declining because the team tried to get off the phone too quickly and did not provide quality customer care. So, I started sending satisfaction surveys to our customers to find out how we could improve in the area of service. It became clear that what gets measured gets done; that’s why measuring the right things is so vital.
When I transitioned into full-time ministry, it was apparent that measuring faith, hope, love, or worship’s effectiveness was impossible. However, it should not preclude churches from finding ways to determine if their work is making an impact, demonstrating value, and managing their resources well to focus on improving. There is plenty of advice on what churches should track; here are a few examples: total attendance, number of first-time guests, number of returning guests, number of people serving, number of people in groups, number of baptisms, the average giving per person per week, the average of people attending the church against the average age of the community, and the list goes on.
Church Budget Metrics
Even though the list of metrics a church should track is extensive and subjective, when it comes to creating a church budget, there are four essential metrics every church should track:
- Attendance: Getting an accurate count of the adults, youth, and children at each service, on campus and online, is critical. Because many churches now use check-in systems, running reports to get accurate attendance for youth and children is more effortless and timely than before. However, getting the actual adult attendance can be more challenging. Use a strategically placed high-def camera or a very impartial and accurate usher to count. Padding the attendance stats may stroke the pastor’s ego, but not much good comes by inflating the number. And while we’re on the topic, 3-second online service views are not considered part of attendance. Carey Nieuwhof says, “Counting 3-second views as ‘attenders’ is a little like counting people who drive by your building as attenders.” Accurately tracking attendance provides data points to determine numerical church growth.
- Giving: Accurately tracking giving provides churches with data to evaluate the health in several areas of their church, like generosity and biblical stewardship. It lets a church know if it depends on a few key supporters giving a lot, when a family decides to donate for the first time, and when a family stops supporting the church financially. And giving data is especially necessary when building the church budget. When combined with attendance, it provides important numbers like the average giving per person per week.
- Compensation to Total Budget: When building a church budget, compensation is typically the most significant expense, with healthy churches ranging between 45% to 55% of the total budget. Accurately tracking compensation and comparing the total cost (salary, housing, taxes, benefits, etc.) to the overall budget total allows a church to know if it is in a healthy range and if budgetary action is necessary.
- Staff to Congregation Ratio: Similar to the “compensation to total budget” metric, calculating the staff ratio to the congregation size is essential when budgeting. This ratio helps identify if a church is overstaffed compared to the congregation size. Determining the number of full-time equivalent employees (FTEs) is a two-step process. First, calculate the number of FTEs by summing up the total hours of all employees and dividing that total by 2,808. Second, using the average number of people in your church services, divide the average weekend attendance by the FTE number to produce the ratio. A healthy church ratio is around 75:1.
Just like managing a help desk, when building a church budget, using the right metrics to measure impact, value, and resources help to make informed and strategic decisions that allow the church to thrive and fully pursue its mission. Attendance, giving, compensation to budget, and the staff-to-congregation ratio provide the right measurements when building a church budget.