Baptists are starting a ministry for this, a committee for that, and taking a missions trip here or there. It all looks good—but in the end, finance committees are crunching the numbers and, whoops—the money isn’t there. Again.
“Churches lack in saying, ‘No,’” said Steve Law with Financial Leadership for Churches and Non-Profits. “This is true with almost every church I’ve seen. They get diverted by emotional, amazing needs out there, but it distracts them from what the purpose of the church is.”
Law, who is a former administrator of a church and recently started his own company to consult with churches about financial challenges, explained that unsuccessful—or nonexistent—budgets often come from lack of vision. Before even being able to put numbers on paper, churches must know what the one thing is that they want to accomplish, whether it be a focus on young families, overseas missions, or inner-city youth. Everything in a budget should point to that one main thing.
“If you say ‘yes’ to too many, you’ve veered off in the wrong direction,” said Law.
It’s no different from putting together a personal budget. Stacy Wittkamp, founder of Reaching Flood Stage ministry and the former area director for Crown Financial Ministries, said, “If you were budget coaching someone, and they wanted to buy all these things, you’d say that is great, but you can’t do that right now.” Doing so would put the person off-track.
Once a vision is agreed upon by a church body, the numbers can start being put down on paper. Sometimes that requires asking tough questions, and not everyone is going to agree with the direction. “Put God first in how that money is spent,” Law said, “instead of our own personal desires.”
When Jeff Chadwick was the senior associate pastor at Winn’s Baptist Church in Glen Allen, Va., he used his business background to develop a budget with the finance committee. Chadwick used to manage $1.2 billion, combining budgets from several different departments and rolling them into one. At Winn’s, he listed out 10 different categories of what’s most important to the church—“just because 10 is a nice, round number and easy to work with”—to record his expenses and income.
Chadwick then pulled together the leaders in each of his 10 categories to develop the numbers.
Expenses included, but were not limited to: Rent/mortgage for both church services and miscellaneous activities throughout the week, basic bills, communication, salaries, supplies, outreach/missions, tithing, and various ministries.
Income came from tithes and offerings from regular Sunday churchgoers, sponsor church support, individuals who aren’t necessarily members but still support the church, and any supporting organizations.
Every November, the finance committee prepared a budget and presented it to the congregation for a vote. (It was in Winn’s bylaws for an annual budget review.) The congregation had three weeks between the initial viewing and presentation of the budget to ask questions and give the finance committee an opportunity to make revisions before it was voted upon.
Throughout the year, Chadwick then got together with his finance committee every quarter to make sure the income matched the expenses. If income was down for whatever reason, they made adjustments accordingly.
Law recommends that every three years, churches go back to zero and redo the budget. “Zero-based budgeting is extremely time intensive, and will be exhausting to your volunteers,” he said, but all the more important to make sure the numbers fall within the purpose. Then the other two years, go through line-by-line to determine what to add or subtract.
It’s important to remember that churches are meant to be profitable, said William Rae from the Alumni Financial Group. “There is a business side of church to keep the doors open.” Keeping the congregation actively involved in giving—both of time and money—will help keep the church united in its main objective.
“The budget is a bunch of numbers but it really points to something more important,” Law said. “It’s not just about the numbers. It’s really about the people. The people who are giving the money and the people who are receiving the money.” Then lining those two groups up.
The importance of creating a solid budget is an underlying trait for all healthy churches, and it’s never too late to start fresh. “Get your reporting structure right from the beginning,” Chadwick said. “And then it won’t be a distraction for you as your grow. You can stay focused on the important stuff.”
Allison Fallecker works for Entrust Financial Credit Union.