I live in a town where traffic is mostly awful. It can take up to 45 minutes to get home from work – I only work 7 miles from home. Beyond the sheer number of drivers on the road during peak commute times, part of the problem is that the signal lights need to be synchronized to keep traffic moving on major thoroughfares. In an ideal world, syncing the lights would keep vehicles moving, thus improving the gridlock – and my life. But less-than-ideal situations are not limited to traffic control, like why all size ten shoes don’t fit the same? Or why isn’t there a standard adaptor for all mobile phone chargers? Trust me; my list goes on and on. But what about projecting the income for the church budget? Wouldn’t it make sense to calculate 10% of the median household income in the area times the attendance? Because we live in a world where the ideal is not commonplace, it’s up to us, the leaders and planners, to ensure we make every effort to plan accordingly – especially regarding the church budget.
The Tithe
The word “tithe” comes from an Old English root word meaning one-tenth and is a translation of the Old Testament Hebrew word maaser. Since the Israelites were primarily an agrarian culture, presenting a tithe from the increase consisted of crops and livestock to express thanks to the Lord, not money. While a tithe is not explicitly taught in the New Testament, for many followers of Jesus, giving a tenth of their income remains the baseline for Christian giving.
The Reality
God is not a tax collector, and salvation does not depend on how much an individual gives; if it did, we’re all in big trouble. Thankfully, it is by grace alone, through faith alone, in Christ alone, that we are saved because, according to a Nonprofits Source study, only 5% of Americans tithe, and 80% of Americans only give 2% of their income. The study also reveals that tithers comprise only 10-25 percent of a typical congregation. Putting theology aside, most people in your church are not giving 10% of their income.
The Budget Projection
A church budget is a financial plan that prioritizes the limited financial resources to allow the church to accomplish its mission. The benefits of a solid church budget range from building trust within the congregation, showing transparency and accountability, and providing a framework to prioritize spending. Like any budget, a church budget has two sides to the ledger – income, and expenses. Understanding how your church gives is paramount to creating a budget projection to maximize ministry and confidently plan to accomplish the goals for the upcoming fiscal year. Since most people in your congregation are not tithing, the ideal world of using ten percent of the median household income and multiplying that by attendance will not work. Instead, use a formula based on actual giving and attendance numbers. Start by calculating the adult attendance per Sunday for the last twelve months. Using the attendance data, calculate the difference between the prior month’s attendance and average the percentages. Then, calculate the giving per Sunday over the previous twelve months. Equipped with this data, estimate the income by taking the sum of the offering for the last twelve months, multiplying it by the growth (or reduction) factor, and adding (or subtracting) that number from the twelve-month offering total. Here’s an example:
- Twelve-month total of giving = $1,500,000
- Growth/Reduction factor = -2.0%
- Reduction amount = -$30,000
- Budget Target = $1,470,000
Churches that want to demonstrate transparency, accountability, stewardship, and maximize donations to accomplish their mission need to create an income projection based on actual data, not the idyllic hopes of a church filled with tithers.
