Church Budget - FAQ’s
This time every year many churches and organizations are starting to look over the budget and make final edits for the upcoming year. Since we have the privilege to work with local churches all over America, we thought it would be helpful to cover some of the common questions that may arise.
What should the budget include?
Think of the budget as the heart of your church! You will want each line item to reflect your church's vision and mission. For every line within your budget, you should ask yourself, “is this stewarding our finances in a way that is reflective of why we exist and how we want to live out God’s calling for our church?” If it is not, it should not be on the budget. Your budget will need to factor in everything required to operationalize your mission and will include auxiliary expenses such as staffing and personnel.
Who creates and approves the budget?
This might vary based on the hierarchy of your church leadership; however, we recommend there be a Financial Committee that governs all aspects of the church’s finances including the budget and provides regular financial updates that are also communicated to the congregation. With that said, the Pastoral team would guide the process and approve the budget as it should be a direct reflection on why the church exists and how it lives out God’s calling.
Should I budget tithes and offerings?
Absolutely! Without gauging what your church will receive in tithes and offerings, it will be challenging to set an operational budget that is needed to live out the mission of your church. If you are not sure where to even start, looking at your prior year’s giving (if applicable) is a good baseline. Then consider these aspects of your congregation:
Is your church making changes to enable growth in attendance? Maybe you're adding a new service time or expanding your meeting space, if so you would want to factor in an increase in offerings.
Is more than half of your giving from a few individuals? If this is the case, you may want to be more conservative with the forecasting based on historical figures because a change in those individuals' contributions could impact your overall budget substantially.
What is the overall giving amount per member and has it increased or decreased over time? This will help determine how much you should decrease/increase your forecasted amount. Additionally, I would encourage the leaders of the church to pray and preach over the topic of faithfully giving to the local church. Jesus never shied from this topic and nor should we.
What guidelines should we use for setting up multiple funds?
Every church has a general fund whether they know it or not. This is the fund that keeps the lights on and the ministry moving forward. The church may also decide to maintain other funds where they act as fiscal stewards for activities such as outside mission trips, youth camps, capital campaigns or any other activity/purpose that is outside of the church general operating budget. I would caution you against allowing the congregation to designate funds to anything other than the funds approved by your elder/church board. It is important that the church elders & finance team define what funds they want to maintain within the budget. Otherwise, the members within your congregation that give a substantial amount can influence your ministry by dictating where resources go.
I’ll wrap this up with an excerpt from “Budgeting for a Healthy Church: Aligning Finances with Biblical Priorities for Ministry” by Jamie Dunlop which I highly recommend you read.
“How we spend our money shows what we value. A lifelong proclamation of the glory of our Savior involves what we do with our money. A budget is written in the language of money, but it reveals what we value. Every budget tells a story. A good budget will tell a story about Jesus and his promises being worth more than anything this world could offer.”
