Church Revitalization Podcast – Episode 58
Budgeting your church’s finances is rarely anyone’s favorite thing to do, but it takes money to do ministry. Many people think that money is a “necessary evil” in the church, but money in and of itself is neither good nor evil. It’s just a tool used for good or evil. As with any other tool, if used correctly, it will help you achieve your goals. The same goes for your budget, which is an expression of how you use your tool (money) to do ministry that matters.
Here at The Malphurs Group, we have always championed the zero-based budgeting process for church finances, and that’s what we talked about this week on The Church Revitalization Podcast.
If you’re looking for more church budget tips, check out this article about easy budget hacks to grow your church.
Watch the video version of this episode on YouTube, or stream the audio below. Subscribe to the podcast and never miss an episode!
Below, we’ll walk through five steps to zero-based budgeting and stewarding your church’s finances to maximize your impact for Christ in the world.
Provide Mission and Vision framework to your budget-makers
Do all of your ministry leaders know what you’re striving towards together? If they don’t, then you’ve thrown up the first red flag of an unhealthy church. Having a clearly articulated mission and vision is crucial to the budgeting process. If you don’t know your disciple-making goals, how can you decide how much it will cost to reach those goals? Most churches don’t think through this, which is why most copy and paste last year’s budget with marginal changes. They usually see marginal results from the ministry too.
Rebuild the budget starting from zero
Every ministry budget should start from zero. On the other end of that, don’t put a cap on it either. This does not mean that every ministry gets unlimited funding – this is not an approved budget yet! We also don’t want every ministry leader to think that the process is merely writing down a wish list. If the church’s mission and vision are clear, and the leaders take this seriously, they will think through what it will cost them to make the best effort towards the goals for next year.
Much of your operational costs will not change year to year, but this is a good opportunity to look for savings. Check on your insurance, utilities, copier servicing, phones, etc.
Don’t forget to itemize
Gone are the days of the single line item ministry budget. Youth ministry doesn’t get to turn in “$3,200.” Every event, curriculum, trips, supplies, and training needs to be listed. This exercise does several things in the process. First, it requires the leader to think through what they are asking for and why they ask for it. Second, it can be understood by anyone else reviewing the budget. And third, it can be discussed in the next phase of budget development when all things will have to be shown to contribute to the mission.
Collaborate to finalize the budget
Your ministry leaders will come together for a first-round budget review. This is a unifying thing for your leadership team since it gives each person a chance to see what all the other ministries are doing. We often see siloed ministries in churches, and sometimes even competing ministries for the all-precious dollar. This brings everyone together on the team to work towards the same goals.
As a general rule, here are the four major budget buckets that you’ll want to pay attention to as you continue building out the budget:
Personnel – not more than 50%
Operations/Facilities – not more than 20%
Ministries – not less than 20%
Missions/Outreach – not less than 10%
With the budget viewed as a whole, the team should decide together where savings can be found without sacrificing the church’s ability to hit its Mission & Vision goals for the year.
Monitor the budget
Once any particular targets are hit, finalize, and distribute the budget to all your leaders. Your elders, council, or others should be active participants in monitoring the budget, as should the pastor. We all too often find pastors separating themselves from anything having to do with the church’s finances. This is unhealthy and an abdication of their duty to lead the church well. Transparency, integrity, and accountability are all noble and necessary, but every pastor should know exactly how money is being spent, and the financial health of his church.
Make sure the top leadership of the church oversee your finances but have those closest to the ministry on the ground build out the budget.
If your church needs help getting first things first, mission and vision, we’re here to help. Reach out for a conversation with one of our Guides today to see how we can help your church maximize your disciple-making opportunities.
A.J. Mathieu is the President of the Malphurs Group. He is passionate about helping churches thrive. A.J. lives in the Dallas/Ft. Worth Metroplex, enjoys the outdoors, and loves spending time with his wife and two sons. Click here to email A.J.