Gallup did a poll some years back and found that 33% of households kept a formal budget. The adopting and living by a budget is really the first step for anyone wanting to feel more secure in their finances. The same is true for the church. While the vast majority of churches adopt a budget, few live by that budget. Why is that? Because most of them adopt a bad budget. The budget is usually unrealistic, doesn’t support the church’s vision, and feels like a waste of effort.
In our work with churches, Sheri Meister and I have identified three principles that will change the way you budget.
- Know your bottom line: You’re not the Federal Government so you can’t spend money you don’t have.
- Include your long-term goals: You should be looking forward to more than just surviving the year.
- Tell your story in numbers AND words: Go through the exercise of creating a narrative budget.
The first two will honestly be the most difficult and bring the most resistance. You will have to push forward because your church’s financial future depends on it.
Useful Links
- Budget Bottom Line Calculator: https://www.dakotasumc.org/media/files/old/00/Fin_Ben/Finance/FinAdminRes/Bottom_Line_Calculator.xlsx
- Managing Long-term Funds: https://www.dakotasumc.org/media/files/old/00/Conference/Finance/StewResrces/Managing_Long-Term_Funds.pdf
- Guide to Building Narrative Budget: https://jctaccounting.com/2020/07/24/budgeting-does-your-budget-tell-the-story-of-your-church/
- Narrative Budget Examples: https://centerforfaithandgiving.org/2016/01/narrative-budget-examples/
JCT Accounting Co 