My Dad worked for Titleist Golf for over 25 years and spent much of his time grinding irons for tour pros. He would watch them swing, listen to their feedback, and then make their clubs work perfectly for them. As you can imagine, spending all this time around golf pros, he developed a pretty good swing. In my late 20s, I decided to pick up the game, and having seen my Dad play, I thought it would be easy. I was so wrong. Everything about golf is hard for me. My Dad would patiently remind me to stop swinging so hard. He said I excelled at creating powerless effort instead of finding effortless power. After years of practice, I finally understand the difference. I needed to understand the mechanics of the golf swing, the stance, the grip, the takeaway, and the follow-through. All elements of the swing depend upon each other. And even after years of practice, I’ll never join the pro tour, but at least I can enjoy the game.
The first few years of creating a church budget felt like my early attempts at golfing – I expended powerless effort. Just like understanding the fundamentals of a golf swing, I needed that same basic information in church budgeting. If your church is learning how to build or improve its budget process, here are the fundamentals to creating an effective church budget.
Mission and Vision
The budget is a plan that dictates how the church spends every dollar donated. Your church’s mission defines its reason for existence and is the building block of everything the church does. The vision inspires people to accomplish the mission by vividly painting a picture of the end state. Before entering a single number into the budget, the church must know why it exists and how it will get there. In terms of the golf swing, it’s the stance – it requires proper alignment and balance; without it, everything else will head in the wrong direction.
Projecting Income
An effective church budget accurately projects the income for the upcoming fiscal year. Estimating donations is not a best guess; it’s a formula. Creating the projected income requires at least 12 months of attendance and donation data. The attendance data gives insight into growth trends, while the donation data provides the dollar amount’s baseline. Avoid the temptation to push the projected income to meet the church’s expenses. Overstating the projected income could quickly escalate into a financial crisis; understanding the projected income could minimize the church’s potential impact. The projected income is like the grip of a golf swing – too loose, and the club can get away from you; too tight, and impacts the effectiveness of the swing.
Identifying Expenses
Building the expenses of a church budget is a time-consuming and tedious process. Constructing the costs is the meat of the budget; it identifies how the church spends every dollar based on its priorities. The expenses determine how much of the budget goes to compensation, operations, and ministry. Use at least 12 months of historical data to assess ongoing and annual costs. This phase of the budget is where churches identify new initiatives, project their actual costs, and determine whether anything should be removed. I see identifying expenses as a golf swing’s takeaway, or backswing, as it begins the motion, sets the tempo, and determines the range.
Ensure Alignment (Income vs. Expenses)
Most churches have dreams and desires far exceeding their income; this is natural and healthy. What’s not healthy is ignoring the discrepancy. Since the budget is the plan that demonstrates how the church plans to spend each dollar, the hard work is ensuring that the expenses do not surpass the projected income. Adhering to the mission and vision is crucial during this stage of the budgeting process; they are the guiding principles when determining where and what to reduce. Aligning the projected income to the list of potential expenses is like the downswing in golf; it’s where the impact happens. If the clubface is too open, it’s a slice, too closed, and it’s a pull-hook. Either way, the ball will not hit the target (mission and vision).
Avoiding powerless effort when building the church budget requires mastery of the fundamentals. It starts by agreeing upon and pursuing the mission and vision. Next, the church must accurately and honestly project the income. Then, it can identify and assemble the costs for existing and proposed initiatives to accomplish the mission. Finally, it must ensure that the income and expenses align, achieving effortless power in the church budgeting process.
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