Before 2020, I used relatively few sources when researching church giving data. But something happened during the pandemic that changed all of that. Maybe it was all the time I had while isolated at home that I suddenly felt compelled to find as much information about everything as possible. Or, perhaps it was that others were isolated at home too and suddenly decided to weigh in on topics I was searching for. Whatever the reason for the sudden glut of information on charitable giving, it is often conflicting. One report shows that charitable giving is down; the next month, it’s suddenly up. I know there are a lot of variables, like who’s performing the research, the size of the sample group, the region of the sample group, and even the questions in the study. Of course, it’s also incumbent on the reader to understand the nuance of the data. For example, an analysis can show that charitable giving is up 4% compared to the prior year but also reveal that church giving is down 6.6%. The difference is in the headline and presentation of the data.
Researching and applying relevant data is a good practice when it comes to church budgeting. It can be like comparing your blood pressure to what medical professionals deem a typical healthy person. It’s good to know if your church falls within healthy guidelines. But comparative stats are not the be-all-end-all. As each church finds its post-pandemic pathway and develops meaningful metrics to discover its trajectory, it must also refine how to invest its budget dollars. With that in mind, here are the top three areas to invest budget dollars to accomplish the mission.
Compensation
Compensation is at the top of the list because it’s typically such a large piece of the budget pie consuming between 45%-55% of the entire operating budget. To be clear, investing in compensation is not a license to overpay the church staff or bring on more people than healthy; it’s the opposite. Churches need to follow best practices by keeping the full-time equivalent (FTE) employees at a healthy ratio and hiring staff that enlists, equips, empowers, and encourages volunteers to do the work of the ministry to build up the church (Ephesians 4:12). When staffing is in alignment with the size of the church and the budget it should compensate the staff fairly. When building the upcoming fiscal year budget, consider providing cost-of-living adjustments (COLA) or merit-based increases to the church staff; it’s well worth the investment.
Leadership Development
At first glance, leadership development appears tied to the church staff. After all, investing in leadership development helps attract and retain high-quality employees, empowers the team to execute the church’s mission, and drives necessary changes to improve. But healthy churches have learned to expand the scope to include volunteers. Leadership development for volunteers is essential for churches embracing the Ephesians 4:12 model with a high rate of volunteerism. Reducing the budget on developing leaders may seem like a prudent strategy during lean times, but over the long haul, it hurts the church. Set money aside to send teams to conferences or online training. In its simplest definition, discipleship is developing people – meaning churches are in the people development business. Invest in your business.
Ministry
Healthy church metrics show that 20%-35% of the operating budget should go to ministry efforts. That means churches need to be laser-focused on how they allocate each dollar when it comes to investing in the ministry. If your financial advisor still recommends buying Blockbuster Video stock, it’s time to get a new advisor. Good leaders ask hard questions to ensure the investments pay off. Does the church have ineffective ministries that require resources (financial and human) that can be better invested elsewhere? What is preventing your church from eliminating this ministry? Is the church starting new ministry endeavors better aligned with the upcoming year’s mission, vision, and goals? What’s keeping the church from making the strategic investments necessary? Investing in ministry is essential; it’s how to accomplish the mission. Make each dollar count.
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