Church Budget Categories – Facilities

Maybe it is just me, but I feel a lot of pressure when building the church budget each year. Churches, like all non-profits, depend primarily on donations to carry out their mission. Every dollar must be accounted for and utilized to the fullest. And that is exactly what a budget does; it brings accountability and trust between the church (as an organization) and the donors. I have a sense that most people think their donations support ministry, and somehow budgeting for the facility is not as “spiritual” as outreach. But, the truth is church facilities are where ministries happen, and maintaining these incredible assets is every bit as important as buying a children’s ministry curriculum. That is why knowing what to include, exclude, and adjust when it comes to the church budget categories for facilities is so important when building the church budget.

What to Include: Church Budget – Facilities

When building the annual facilities budget, these categories help define the areas to include.

• Mortgage – For churches with a mortgage, this is probably one of the largest line items in the budget. Be sure to capture the principle and interest amounts when budgeting. (For accounting purposes, only the interest will show as an expense.)
• Repair / Maintenance – The facilities’ age typically plays a role in determining these costs as older buildings require more maintenance. This category should include a wide range of expenses like purchasing tools, paint, light bulbs, light fixtures, hardware, electrical work, plumbing, roof repairs, etc. 
• Landscape – Some churches use volunteers or staff to maintain the landscaping while other hire vendors. Either way, there are costs associated with keeping the outdoors looking clean and giving a great first impression to all who come to your church. Include items like pest control, tools (rakes, shovels, weed spray, etc.), sprinkler repair, and even plant replacement in this category.
• Mechanical (HVAC) – The best way to maximize the lifespan of the HVAC units is to find a good, reputable vendor and pay for quarterly maintenance. Be sure to include repairs along with the quarterly maintenance costs.
• Safety – Most people come to a church believing that it is a safe place to gather. Don’t be that church that stopped monitoring the fire alarm or is no longer compliant with fire and safety codes. Safety includes fire alarms, fire extinguishers, security systems, elevator inspections, outdoor lighting, etc.  
• Custodial – Whether or not your church uses a vendor, staff, or volunteers, there are costs associated with keeping a facility clean. This category includes vendor costs (window cleaners, etc.), the cost of supplies like toilet paper, paper towels, soap, trash liners, gloves, etc.
• Insurance – Protecting the property from all kinds of damage is essential. But, coverage should also include fraud, misconduct, and protection for the officers. Find a reputable broker and get the right policy. 
• Utilities – This category should include utilities like electricity, natural gas, trash, water, internet connectivity, etc. When calculating these costs, it’s beneficial to use the prior year’s bills to project future use. 

Because of the unique nature of each church facility, this list should prime the pump to help each church decide what categories to omit and add to meet their specific needs.

What to Exclude: Church Budget – Facilities

• Compensation – Do not put facilities, maintenance, custodial, or janitorial staff compensation in the Facilities budget. All employee compensation needs to be in the Compensation section of the budget.
• IT – Equipment like printers, copiers, even computers should not be in the Facilities budget. Create a separate budget for IT (Information Technology) that includes hardware, software, infrastructure, and support.
• Audio/Visual – Sound systems and video equipment ranging from projectors to large screen TVs abound in the modern church. While the Facilities team needs to be included in any project to add or change equipment for safety reasons, the procurement of the actual audio and video equipment should not be in the facilities budget.

What to Adjust: Church Budget – Facilities

Cuts to the Budget

• Evaluate ongoing projects to see if they can be paused or postponed.
• Review contracts for opportunities to scale back costs/services. Example: only have the trash picked up once a week versus twice.
• Determine what can volunteers can accomplish. Volunteers are the “X-factor” for a church providing highly skilled labor, at no cost, with the added benefit of getting buy-in to the mission and vision of the church.

Increase to the Budget

• Invest in tools/equipment. Investing in the tools and equipment demonstrates value to the staff and allows them to function more efficiently.
• Begin Capital Improvement projects. Most churches have a prioritized list of improvements to their facility when the budget allows. Release the team to manage these projects and make the facility more functional, safe, and attractive.

After compensation, facilities are the most expensive category in a church budget. And while making a mortgage payment may not seem spiritual, funding the maintenance and care of this valuable asset is crucial. It is where people gather to worship through song, teaching, and giving. It is where guests come to seek and explore. It is where faithful followers serve. It is why churches build a budget with their facility in mind.