Guide for creating a church budget
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The document is a guide for creating a church budget, emphasizing the importance of assessing previous financial data and setting specific, measurable, attainable, relevant, and time-based goals. It discusses various budgeting methods, key budgeting categories such as income, personnel, facilities, ministries, outreach, and expansion, and highlights the need for regular budget reviews and accounting for seasonal attendance fluctuations. Additionally, it stresses the necessity of planning for maintenance costs to avoid financial issues.
Guide for creating a church budget
- 2. You want to do more to spread God’s word but for many churches, the ministry is largely dictated by finances For smaller churches, it’s very common for finances to be overseen by a staff member or volunteer who’s also juggling other roles and commitments
- 3. I Before You Set Up Your Church Budget
- 4. ASSESS PREVIOUS DATA How much are you spending on personnel, facilities/equipment, and administration? Does your church typically pay all of your expenses on time? Are there reserves you can dip into if needed? How many donations does your church receive? How much does the average member of your church donate? How many of these are recurring donations? Are there any significant fluctuations in attendance and giving?
- 5. MAKE BUDGET CUTS (IF NECESSARY) Are there some ministries within your church that are not effective or non- essential (in the short- term, at least)? Are there expenses you could cut and not see a difference in terms of results? Are your proposed cuts likely to make any roles redundant?
- 6. SET GOALS FOR THE YEAR AHEAD SPECIFIC Vague goals are hard to implement and measure. Make your goals as specific as you can MEASURABLE Goals that are easy to evaluate help you see the progress you’re making ATTAINABLE Your goal should be realistic to achieve — but not too easily! RELEVANT Does the goal tie in with your church’s mission and vision? TIME-BASED Since open-ended goals can be much harder to measure and achieve, look to set deadlines
- 8. Incremental budgeting uses your previous budgets as a baseline for next year’s budget, with tweaks as necessary With this type of budgeting, everything reverts to zero, and every aspect of your church’s activity needs to justify its place in the budget With this type of budget, all activities are assessed according to their performance INCREMENTAL BUDGETING PROGRAM BUDGETING ZERO-BASED BUDGETING
- 9. III What To Include In Your Budget
- 10. Keep track of all income your church receives — including online donations and other fundraising channels INCOME Some churches decide to pay lower salaries, but this can work against you. Your church’s people are your best asset, which is essential for your church to grow PERSONNEL Keep track of all income your church receives — including online donations and other fundraising channels INCOME
- 11. This category covers utilities, insurance, and church maintenance work FACILITIES/EQUIPMENT Choosing which ministries are likely to be the most cost- effective is an essential aspect of church budgeting MINISTRIES There’s little point spending a large chunk of your church’s budget on outreach activities if your finances aren’t in shape or your church’s facilities need an upgrade OUTREACH
- 12. As your church grows, you’ll need to budget for expansion. This may involve upgrading your facilities or even building new facilities if your congregation expands to this point EXPANSION Fundraising software can help your church raise more funds and strengthen your donor relationships SOFTWARE Keep a portion of your church’s budget for marketing, especially in the final quarter of the year MARKETING
- 14. This is very easy to do if you’re using donor management software. With Donorbox, you can pull donation reports quickly and easily to see how your income stacks up against your budget
- 16. For most churches, there are fluctuations in attendance at certain times of the year. December usually sees a spike, for example. When you create your church budget, factor these shifts into account and use them to avoid tough times.
- 17. VI Have a Plan for Maintenance Work
- 18. If you haven’t factored maintenance into your budget, it can also be financially devastating. Putting a portion of your church’s income aside for maintenance work can avoid financial headaches