Beginning in 2004 and every other year after, my family takes a road trip up the coast of California, camping at some of the most beautiful spots you can imagine along the way. Seeing the California Coastline from Highway 1 is breathtaking. If you have never seen Manchester Beach, you are missing a true gem. These trips last almost two weeks. As you can imagine, a vacation of that scope requires a lot of planning. In fact, if we don’t make reservations early, we may not get to stay at some of our favorite campgrounds. That’s why we start early by mapping out the route. Since I’m a planner, I create a spreadsheet that shows how long each leg of the journey will take, how many miles we’ll travel each day, and how much gas we will consume. Once the trip is over, but before we re-enter the non-vacation life, I like to make a movie of the trip and share it with the family. My feeble efforts will never be confused for a Spielberg epic, but they are wonderful reminders of the incredible time we had. I bring all of this up for a couple of reasons. First, to inspire you to take a trip up the coast of California, you will not regret it. Second, to illustrate the difference between a budget and a financial report. Often in the church world people say things like, how’s the budget, when they really want to know how giving compares to spending. So what’s the difference?
A Church Budget
A two-week trip camping up the coast of California requires a plan. A plan that includes the cost of gas, lodging, food, and even tracks time needs to start well ahead of the vacation. Before we leave on our trip, I usually send our travel plans to a few people so someone knows where we should be in the unlikely event that something happens. That sounds a lot like a church budget. A church budget is a plan to get you from point A, the beginning of the fiscal year, to point B, the end of the fiscal year. A church budget keeps the church focused on the mission, vision, and goals set for the year. As a bonus, sharing the budget with those who need to know provides accountability all along the way.
A Financial Report
When we return from our trip, I sift through all the wonderful pictures and videos taken to document the journey. Then, I carefully construct a movie from the media that documents our travels chronologically. I hope to capture the fun, adventure, and vibe of the trip. That sounds a lot like a financial report. A budget is the plan to allocate financial resources based on the mission, vision, and goals for the year, and financial reports are the tools to let you know how well you are doing on the plan. For example, a budget report will show variance (plus or minus) per budgeted category.
Income
| Actual Giving | Giving Budget | Difference |
| $250,000 | $275,000 | -$25,000 |
Expense
| Compensation Actual | Compensation Budget | Difference |
| $120,000 | $125,000 | -$5,000 |
Other financial reports, like a Statement of Activity, or a Statement of Financial Position, provide deeper insights and analysis of the church and include assets and liabilities to show the net worth.
The next time someone at your church asks you how’s the budget. Smile, and remember they are probably not asking you about the plans for a two-week camping trip; they really just want to see the video.
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