It all starts when you create a church budget that works
Andy Stanley said at a Catalyst conference a few years ago that “if you don’t know why something’s working when it’s working, you won’t know how to fix it when it breaks.” That seems like a pretty straightforward observation, right? The reality is though, that 49% of churches consistently don’t meet their budgets. Let that stat sink in for a moment. That means that, on average, half of the churches in the U.S. are financially unhealthy. Regardless of whether you’re a church plant or a mega church, moving from broke and break-even to break-through won’t happen by itself. You’ve got to know how to engage your staff, work with a finance team to create a church budget that works, and keep your pulse on the big-picture financial health of your church. So, where do you start?
Here are 4 tips for creating a healthy church budget:
- Operate on 90% of your income. Take the current year’s income and create a budget based on 90% of everything you’ve received. Budgeting on 90% is safe and wise.
- Pray about what God would have you do in 2015, and then create your budget. You don’t need to know the how yet. Like a lot of things that require faith, you may have to commit before you have all the answers or know exactly how you’re going to raise the money.
- Engage Your Team. Once you’ve made the decision to budget on 90%, engage your staff and finance team in the budgeting process. People will have trouble following a process they didn’t help create. Ask them the question, how would you run your ministry on 90%? Then work together to create a broke proof budget.
- Cut Stuff. If you spend 100% of what you receive, you’re going to have to cut stuff. Rather than going line item by line item and cutting a little here and there, it’s usually more beneficial to cut one ministry or staff position. We’re not suggesting you ruthlessly cut staff positions, but you do need to take a hard look at what’s working and what isn’t.
- Budgeting on 90% allows you to end the year with margin. How much of a relief would it be knowing you had that kind of margin?
Why is any of this important?
Because, as a pastor, you need to know the Bible. And, you need to know your people. But you also need to know the numbers. People are behind those numbers and people matter. And, financial numbers are indicators of the health of your church.
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