Archives For church budgeting

IHOP Table

Napkins at IHOP – The IHOP Principle

March 6, 2013 — 3 Comments

When your church has to make spending cuts (and all churches will at some point), choose wisely. By wisely, I mean don’t make cuts that offer low ROC (return on cut). Let me explain.

The primary reason go into an IHOP is for the Cinn-a-stack pancakes. If I could do without those, I would rarely eat at IHOP. Here’s why: there are two things they do that ding my breakfast experience there.

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In Christianity, Church Finance, Church Growth, Church Strategy, Generosity, Leadership, Leadership Vault, Spiritual Formation , , , ,
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money-drain

How to Keep from Running a Deficit in Your Church

March 4, 2013 — 5 Comments

So, how’s your church budget doing this year? It’s March now, which means it’s also a good time to look at church finances. You can probably already tell what kind of start the church is off too. Granted, January and February are not strong months for offerings, historically. However, you can take this into account as you look at what kind of January and February the church has had–and make some adjustments. If you’re off to a better year than anticipated, praise God. If you aren’t, praise God anyway, and make a small tweak or two now. It will save you much greater pain down the road.

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In Church Finance, Church Strategy, Leadership, Leadership Vault, Stewardship, Theology , , , , ,
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Golden-Egg

5 Keys to Healthy Church Budgeting Every Year

January 9, 2013 — 2 Comments

When putting together a church budget, several mistakes are commonly made that can haunt a church throughout the year and beyond. Here are five keys to a healthy church budget. There are more steps than these, but these are the big five:

1.Don’t drastically overestimate projected offerings. This is a classic for those who love to “step out on faith” or have something they really want to do but can’t afford. The problem here will be a large deficit requiring draconian cuts, pleas from the pulpit, and questioning of the leader’s abilities to project. I know it’s tempting, but don’t do it. Keep your projections optimistic but sane. Here are a couple of principles with some exceptions: If your church is not growing, your offerings will not. Also, if your church is growing, offerings per capita will grow slower in the newcomers than in those attending. To avoid overestimating offerings significantly, it also helps to ask this question: If I’m projecting increased giving, where is that going to come from and what steps are we taking to make that projection a reality. The scariest part is many ministers/elders “step out on faith” without thinking through their part in making that step a reality. As a result, their step becomes a year-long problem that erodes church trust when repeated.

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In Church Finance, Church Growth, Church Strategy, Leadership, Leadership Vault, Stewardship , , , , , ,
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drowningindebt

Church Budgeting Myths

October 14, 2011 — 2 Comments

The area of church finance is riddled with myths. They have pure motives behind them, but they are myths all the same. If you buy into them, you’ll set yourself up for financial peril down the road. Here are a few with some observations:

  • Churches that spend more money on missions and benevolence are less selfish and more externally-focused. I suppose it’s a noble goal to spend less internally and more externally. However, there are churches that use missions as a way to outsource evangelism. They spend the money they do because they have no vision for reaching their own community beyond assemblies and bible classes. Truth is, reaching your community costs money just like reaching people overseas costs money. So, when you hear about the church that gives 60% of their budget to missions…pause and ask if God cares about lost people overseas more than he cares about the lost next door to your church. We can do both–support global and local evangelism. We should.
  • The second is like it: There is a certain percentage of a church’s budget that should go to staff. This is a completely subjective idea. There are far too many variables–location, church size, amount of offerings, season of the church’s life to say there is an ideal amount of money. Besides, in general, a quality staff member will pay for themselves in ministry and growth. You can certainly over-hire. However, you can also underhire and underpay because of a subjective number.
  • Number of ministries = ministry impact. This one will sink you faster financially than anything. More doesn’t necessarily make a bigger impact. It certainly costs more in money and energy, though. I once heard a pastor of a church of 3,000 brag about having more than 400 ministries. Sounds like a great church. But, they may have been able to make twice the impact with 50 ministries. Build strong, vibrant, fruit-bearing ministries. That’s where the impact is…not in the number of ministries. Too many ministries will typically dilute, not increase your impact over time. Too few is…well…too few.
  • Dollars = Value placed on a ministry. Bologna! Many of the church’s most powerful ministry requires very little, if any, funding. Prayer, Small Groups, Preaching, etc. all make a huge difference but require very little money. Does that mean the church values the facility more than prayer? No, it just means they’re different. A teenager costs parents more money than they did while in elementary school. It doesn’t mean you love them more because you have to spend more money on them. It’s just life. Some churches spend a lot of money on helping the poor, but ironically don’t really care to come face-to-face with them. Dollars do not equal value placed on a ministry.
Thoughts? Can you think of other church financial myths? Care to respond to any of these?

 

In Christianity, Church Finance, Leadership , , , , , , ,
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Rock and hard place-thumb-570xauto-99

Making Tough Church Budgeting Decisions

October 13, 2011 — 2 Comments

If you have clear mission and roles for those involved in the budget process, making tough decisions about how to allocate the church’s resources is easier, but it’s still tough. All of the ministry a church is involved in is good. Saying no is difficult no matter what. However, wise churches will learn to say no when they have to. Here are some spending principles that have served me well over the years.

  • Feed the geese first. The geese are staff, key local ministry and leadership development. Like it or not, Missions and Benevolence depend on the geese. Starve the geese and ultimately you’ll starve your missionaries and the poor as well.
  • Feed the baby geese second. Baby geese are ministries that are growing like crazy.
  • Feed missions and benevolence through special offerings/designated giving. There are many reasons for this. The two biggest are: you’ll raise more money and it gives you a chance to better highlight the ministries in the course of raising the money.
  • Those who overspend their budgets (especially without good cause) aren’t rewarded with more. They will tend to get less money allocated. This isn’t punitive. It’s to get them in line with where the church needs their spending to be.
  • I’m a fan of sunsetting ministries that produce sideways energy or high drama in the church rather than cutting 10% across the board. Budget cuts are an objective way to provide a nice Christian burial to ministries that need one.
  • If you must choose between funding one ministry over the other, it’s also wise to ask two practical questions: which most fully advances the church’s Kingdom mission? and, Which ministry leader we believe in more?
  • Build in some contingency and some savings. Roughly, 10% contingency, 5% savings. If you need to cut, start with contingency. Rather than put in a 10% contingency budget line, we budget the amount over all the ministries and allow ministries to spend their money up to the contingency point. After that, they need authorization.
  • Avoid the illusion of thinking Jesus likes all ministries the same, or that He only cares about certain ministries. It’s amazing how much Jesus’ views resemble those of the one making his/her case for their ministry ;)
  • Money is given fundamentally to be spent wisely for God’s purposes, not saved. Remember the Parable of the Talents.
Thoughts?
In Church Finance, Leadership , , , , , ,
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