Mistakes Churches Make When Making Their Budget
Rev. Dennis Bickers, Area Minister for ABC-Indiana/Kentucky
(Dennis is a leading expert in bi-vocational ministry. Check out his excellent insights at www.bivocationalministry.blogspot.com. Reprinted by permission.)
This is the time of year many churches are setting their budgets for the upcoming year. Many of these churches make some common mistakes that affect their ministries. My experience has been that these mistakes occur in all size churches but are most prevalent in smaller and mid-size churches. It may be too late to redo your 2014 budget, but it is not too early for church leadership to begin to discuss how to improve the process for next year and avoid these mistakes.
The first mistake these churches make is to simply go through their budget line items, add a little to each one to cover anticipated increases, and present the budget to the church for approval. This is a time to discuss how effective these items have been and if any of them need to be eliminated or changed. The finance committee does not usually have the authority to make such changes, but they can discuss with church leaders their concerns and recommendations. In a perfect budgeting system, the leaders of the various ministries would present their budget requests to the finance committee after having already examined the programs and ministries for possible changes. However, I know how it really works in smaller churches, and any such recommendations are more likely to come from the finance committee in most churches. Regardless of where this occurs, prior to setting a budget for the upcoming year is the perfect time to evaluate every thing that is happening in the church. Possible changes can be identified and the budget set to reflect those changes.
A second mistake many churches make is closely tied to the first one. They set a budget without the church having any sense of vision for ministry. What does God want to do in and through your church in the coming year? Until you can answer that how can you set any kind of realistic budget? The majority of smaller churches I know operate year in and year out without any vision for ministry. They open their doors each Sunday hoping something good will happen and close them following their services wondering why it didn't. They have no vision, no goals that would help them achieve that vision, and no purpose beyond coming together each week. They are merely drifting from week to week, and their budget reflects that drift. A budget should reflect the ministry plan for a church, and it does. What it reflects for many churches is that they have no plan for ministry. Before your church develops another budget it should have a clear sense of God's vision for the church and a plan for how you will achieve that vision. Many churches will find it helpful to invite a denominational leader, a consultant, or a coach to come and help them discern that vision.
The third mistake often made is that a budget is made without any idea of what the anticipated income will be. Many churches assume their income will be rather flat and will often base it on what was given during the past year. That is one way to almost guarantee your income will be the same as last year. If people are not being challenged to give more why should they? Without any kind of stewardship training people will often just do what they've been doing. Depending on whom you read, the average giving of Christians in the US is reported to be around 2 percent of their income. That is a far cry from a tithe. Most Christians in the US can do better than they are doing when it comes to their giving, but if they are not challenged to give more and are not taught sound stewardship principles they are unlikely to do so. I recently served as an outside speaker for a church that did a very intentional stewardship campaign, and slightly over half of the pledge cards that were turned in indicated they were increasing their giving for 2014 over 2013. That is a good start, and I expect if that church continues to use this campaign over the next few years they will see a significant increase in their income. To set a budget using last year's giving levels is too safe and demonstrates a lack of faith on the part of the church and a very low bar of expectations for the congregation.
A fourth mistake often found is that most budgets are focused on the inner workings of the church. For smaller churches an extremely high percentage of their income is often spent on salaries, building upkeep, and the things that the current congregation needs. In a way, this is all tied into the previous mistakes. Without a vision, there is no real plan for ministry to those outside the congregation. Nothing is being done to increase the giving levels of the members. Whatever money comes in is spent on keeping the doors open and the congregation satisfied, and little is left for outreach and ministry to the unchurched in the community. These churches may claim they want to grow, but their budget says otherwise because without the ability to do ministry outside the church little growth is likely. This mistake will continue to hamper the growth of the church until the first three mistakes are addressed, but now is the time to begin correcting them for a better budget and more ministry in 2015.