Benjamin Franklin has a famous quote that goes something like this:
“Those who fail to plan, plan to fail.”
One of the biggest mistakes people make with their personal finances is not planning for an unexpected emergency. That’s why the first “baby step” in Dave Ramsey’s Financial Peace program is creating a $1000 emergency fund.
The same applies to your church. Technology breaks, people sue, leaders have moral failures, taxes don’t get paid, the economy hits a downturn, etc…etc. In fact, it’s not a matter of IF you’ll need an emergency fund, but WHEN.
On a more positive note, your church will also face opportunities. A new building will open that you want to move in to, an opportunity to go multisite will drop in your lap, a person you’ve been wanting to hire will become available, or a great deal on a piece of technology will appear out of nowhere.
Don’t you want to be ready for those opportunities? Don’t you want to avoid wreaking havoc on your budget through unexpected expenses? Of course you do. Here’s how.
Prepare by creating an obstacle and opportunity fund (O&O fund) in your church budget.
This reserve is funded with cash that you can access quickly. There should never be less than six weeks of operating budget in the bank. If your weekly budgeted need is $10,000, your O&O fund should always have at least $60,000.
How do you fund your O&O quickly if you currently don’t have it? Ask your people to give toward it during a series on finances. Ask them to bring the offering on one day to help you reach more people for Jesus when opportunities are funded!
Having this margin will allow you (and your finance team) to breath a little easier.
It’s also why the first thing we focus on in Giving Rocket is creating an annual funding plan, so you can account for these types of funding efforts.