Funding Your Vision
By Raul Rivera
As in years past, Pastor Zane made a promise to himself that he would sit down with the church board, create a budget, and stick to it. He was determined to spend more time this year educating himself on money management and enhancing his financial proficiency. Now, it is not that Pastor Zane and his board of directors had never created a budget before; they had done that each of the last 5 years since the church’s inception. The issue for Pastor Zane was the inability to properly implement and stick to the budget that was created for the church.
The budget dilemma
A common issue for many pastors is learning how to create and implement a budget for their church. I think it is safe to say that nearly every pastor feels the weight and responsibility of the church’s finances on his shoulders. Pastors desire to be good stewards with that which the Lord has given them, but oftentimes a pastor may feel as though his financial proficiency is inadequate.
For many pastors, the budget can be an “elephant in the room” type of topic that churches either tackle head on or simply try to ignore. Yet, the reality is that in order to operate a church and fulfill your vision, money matters. Therefore, the question that needs to be answered is, “How do I properly establish a budget for my church or ministry?”
Before we answer this question, let us examine why budgets are necessary.
Is a budget necessary?
Now, I imagine that most of you reading this post would answer this question with an emphatic, “Yes”. But have you ever truly considered why the answer to this question is “yes”? I mean after all, as long as the bills are getting paid and the bank account is not in the red then all is well, right?
When you create a budget for the church, you can adequately plan for where the church is going. The budget should give you a complete picture of how much money the church receives, and how that money is being spent.
Based on this picture, you can set a budget in place to help your church meet its goals like purchasing a facility, beginning an outreach program, or buying new resources for your children’s ministry.
Furthermore, creating a budget will allow you to pinpoint areas of weakness within your church’s financial structure. A budget will help your staff see areas where you may have missed the mark in managing your financial records and allow you to make the necessary adjustments before it may be too late.
4 Steps to implementing a budget
Now that we know why the budget is important, how are you to tackle such a big and important task? I believe that the following 4 steps can help you with the process of implementing and sticking to a budget for your church.
1. See the offering plate as seed.
I would like for you to think of a bowl of grain. You can use that bowl in one of two ways:
- You can grind it all and make some wonderful bread with it, or
- You can use some for making bread and save some for sowing, which should result in you ending up with more bread than you will ever need.
Many churches today live from offering to offering. They have learned to look at the offering as money for bills versus seed for sowing into their own futures. A critical and fundamental change must take place in our minds and hearts. This change will not happen overnight. It will take several months and years for it to fully permeate the way money comes to your ministry.
If you heed my words, a day will come in your ministry’s future when the finances of your ministry will begin to surpass the dream in your heart. The pastors that seem to have more than enough are the pastors who see their offering plate full of seed, not just money.
They see the resources that come into the hand as having potential to multiply. To them, they are not being handed something finite, but something potentially infinite!
2. Build a financial margin to protect your seed.
This is your guide to figuring out how and when you can reach your financial goals. You create a realistic goal by building in a financial margin. This is the “more than you need” area of your budget. It is the money that you do not touch but rather use to gain financial growth.
A good rule of thumb to create a margin is basing your budget on 90% of last year’s total income. History is always a good teacher. If we are diligent to account for every penny we receive and spend each year, it serves as a great basis for building a budget next year.
Gleaning from my conversations with many pastors, I can tell you that a majority of pastors set their current budget to be 110% of last year’s budget, believing for the growth. They are setting themselves up to be a week-to-week, offering–to-offering church that is filled with stress and worry.
3.Begin planning early.
Another important budgeting step is allowing ample time to establish your budget. It is ideal to begin planning next year’s budget a few months early so that any details can be worked out before the next fiscal year begins. You can even establish a budget committee to prepare a budget for the board to approve.
However, if you have yet to establish a budget for this year, do not worry. It is never too late. I encourage you to get with your board as soon as possible to establish a budget for the remainder of the year. I know you can do it!
4. Make a team plan for inner-office management of expenditures.
An important part of making sure that your church’s budget is carried out is creating a system of accountability. I recommend creating a system of forms to track who spends what, when, where, and why, to be sure that regular accountability is maintained regarding the use of church funds. Additionally, create a contingency plan for emergency expenses outside of the budget. Be sure that every department is aware of the protocol.
A simple way to increase your church budget
Perhaps many of you reading this post are familiar with creating and implementing budgets. For you and your church maintaining and sticking to a budget is not the issue. Rather, maybe you have been struggling to come up with ideas about how to increase your church’s budget.
Well, a for-profit arm can help increase your church’s budget without relying on increased giving. This is a strategy that we have been teaching at our conference for years and we have heard many success stories from churches that have implemented this strategic venture.
In essence, a for-profit arm is a ministry owned business that is explicitly established to do business and make tax-free money for the church. This tax-free money is paid to the church in the forms of dividends and donations.
This business can engage in any lawful activity and be open to the general public. The type of business can be anything you want it to be so ling as it is a legal business and you ministry feels good about it. Whether it is real estate investing, commercial leasing, hauling, dry cleaning, a retail store, a convenient store, a car dealership, or restaurant, your church can own the business.
Start the right way
Creating a budget is important for the function and growth of your ministry. It can seem intimidating, but it does not have to be. I want to encourage you to keep moving forward with the dream and vision that God has given you. Keep fighting the good fight.
I also want to invite you to attend one of our upcoming conferences near you. During this one-day conference, you will learn more about the for-profit arm strategy that will allow your church to increase its annual budget without having to increase tithes and offerings.