Building a church budget is a long journey filled with hopes and dreams of creative and new ways to accomplish the church’s mission, vision, and goals for the upcoming year. In many instances, the entire process can take up to five months. As taught in Session 101, the church budget starts by determining the goals for the upcoming fiscal year based on the church’s mission, vision, and values and then sharing these goals with key stakeholders. Sharing the goals early in the process allows the operations and ministry teams to dream forward and strategize how to accomplish goals and the financial resources needed. Session 102 taught the importance of creating a realistic income projection based on attendance and giving trends. Sessions 103, 103 E, and 103 N provided the framework for projecting the expenses, including how to calculate compensation, one of the most significant expenses for a church. In Session 104, it all came together, and the financial team compared the estimated income to the expenses.
As stated in Session 104, once the budget team identifies the variance between the estimated income and expenses, it’s time to send the information back to the operations and ministry leaders for revisions. Whether increasing or decreasing the budgets, the process requires leadership committed to accomplishing the goals set at the beginning of the process to execute the mission. Keeping the teams unified is paramount at this stage of the process. Remember, it’s one body with many members; they must work together and make the necessary adjustments to hit the estimated income target.
After equipping the ministry and operations teams with the amounts to either increase or cut, the teams need to prayerfully and carefully make adjustments to maximize the financial resources allotted.
Compile the Revised Budgets
Now it’s time for the budget team to compile the revised operational and ministry budgets in the same manner as shown in Session 104. The total estimated expenses must match the total estimated income, ensuring that every dollar goes to accomplishing the goals and supporting the mission.
Share the Budget
Building trust is one of the many benefits of creating a church budget. It demonstrates to the staff, volunteers, congregation, and a watching world that churches are trustworthy and accountable. In post-Christian America, another story of embezzlement or scandal at a church only fuels the fire of distrust and eroded credibility. The National Council of Nonprofits lists transparency and accountability as the primary ways nonprofit organizations earn trust. Sharing the final budget with the church is an excellent way to demonstrate fiscal responsibility and trustworthiness and share the goals for the upcoming year.
- Order of Sharing: Share the final church budget with those who have labored and have a stake in it before presenting it to the congregation. Start with groups like the Elder board, Deacons, other denominational leaders, financial and budget committees, and operational and ministry leaders. Questions about the budget will likely go to people on these teams; providing the budget to them prepares them to answer questions.
- Level of Sharing: Transparency does not mean giving up private or personal information. Sharing as much information as necessary without disclosing individual compensation, including missionary support, is essential. Session 104 shows how a summary report provides total compensation without showing Lead Pastor Smith’s or Youth Pastor Jones’ compensation. Summary reports provide all the information needed to determine how the church allocates its donations.
- How to Share: For many churches, communicating anything can be challenging. Use all appropriate methods available to get the word out: special church meetings, announcements during a service, special inserts in the bulletin, part of the periodic emails, or whatever the denomination by-laws or rules require. The bottom line: share it with those interested in how the church is stewarding the financial resources entrusted to them.
Congratulations! The annual church budgeting process is complete – now it’s time to start planning for next year.