A budget is one thing successful businesses have in common. It doesn’t matter if it’s a large corporation, a small family-owned business, a non-profit, or a church; a budget is the plan that allocates the projected income to accomplish the mission. Not creating a budget is the kind of fiscal irresponsibility that allows mission drift and erodes trust. Without a budget, an organization could easily spend beyond its projected income and find itself battling cash flow issues that can quickly become a financial crisis.
Churches are not immune to financial issues and can find themselves in a precarious financial position without a budget based on their actual donations, spending, goals, and attendance trends. Considering a Lifeway study showing pre-pandemic statistics that revealed churches are closing at a faster rate than they are starting (4,500 closing with only 3,000 starting), it’s more crucial than ever for churches to manage God’s resources well.
Churches that create haphazard budgets or, worse, avoid budgeting should consider the importance of good stewardship. Here are three benefits of building a church budget.
Promotes Trust
It’s not a secret that churches rely on the generous donations of their congregation to support their ministry and fulfill their mission. Trust is essential. Creating and sharing the church budget builds trust within the congregation. The church budget provides the plan for the allocation of each donated dollar. It assures that church leadership is realistic in projecting the giving, transparent in its spending, aware of best practices, and committed to the church’s mission. Building trust starts with honesty and grows when the church does what it says it will do. When funds are tight, they make the difficult decision to reduce spending in the budget. When funds are plentiful, they praise God and show how the church plans to invest it in accomplishing its mission.
Keeps Focus on the Mission
There are so many good and valid ways a church can spend its money. It can and should pay its staff appropriately and strive for a safe, clean facility to worship. Churches need to provide the curriculum for ministries like children, youth, and adults. Global and local outreach initiatives like supporting missionaries or taking short and long-term trips require funding. But what about subsidizing the cost of youth camps or adding new check-in stations for children’s ministry? Does the church need a fresh coat of paint? Does the parking lot require slurry and striping? Are the HVAC units in need of repair or replacement? For most churches, the list of financial needs typically outweighs the income. The budget is the tool to keep the focus on the mission. The budget gives permission to say “no” to good things in pursuit of better things.
Provides Financial Visibility
Even though statistics show that donations are higher for churches that talk about giving regularly, many pastors still find it uncomfortable to talk about money. Presenting the budget provides a forum to talk about money. A well-constructed budget income projection uses statistics like average giving per person, number of giving units, total giving, and ultimately, all the ways the church uses these financial resources to accomplish the mission. It’s the ideal way to show the congregation the value of their donation and its kingdom impact. It may even stir some up to give for the first time or to increase their generosity.
As with their for-profit counterparts, churches that build a solid, well-planned budget find several benefits, like building trust with those who financially support the mission, avoiding mission drift, and providing the kind of visibility that inspires generosity.
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