The nice thing about the church is that no matter how incredibly boring the sermon may be, it’s still more exciting than reading the budget.
Let’s change that. The budget, I mean, you’re on your own with the sermon.
While a line item budget is a necessary tool for fiscal management it really tells a lousy story about how the church is spending its money. As you move through the budgeting process (oh PLEASE tell me you have a budgeting process) work on a second version, a narrative budget.
The narrative need not be a great deal of work, but once complete it can be a real help.
Divide all of your expenses into a few broad categories: worship, outreach, discipling and administration. Sunday School expenses, for instance, will all go into discipling, while the cost of altar candles and communion supplies will go into worship.
After that it get a little more complicated. While some in your congregation believe the pastor only works during worship, his or salary will probably be divided over most or all of the categories. A music director will mostly be in worship but 10% of the time may be spent with the children’s music program, which should be attributed to discipleship.
The same should be true of your facility costs. How much of your building is worship space and how much is classrooms? Is your building used during the week for a tutoring program, scout meetings or serving meals to the hungry? Use these ratios to determine not only mortgage expenses, but also utility costs, janitorial expenses and your building insurance.
I won’t give you a formula to use, each church will allocate its expenses a bit differently, depending on things like the focus of the church, staffing patterns and where and how volunteers and donated items and services fit in.
Are you overwhelmed yet? I know it sounds like an awful lot of work, but it should probably take less than hour. If you are doing your budget on an Excel spread sheet, just add a few more columns to the right, one for each of our narrative categories. Then for each line item expense decide what percentage should go into each category. Have it add it up at the bottom and you’re good to go.
And don’t get too wound up on the details. While you need to do this with some integrity most people won’t care if the pastor’s time allotted to worship is 46% or 49%.
Then take a step back. If 95% of your expenses are spent on worship, you’re probably not taking outreach and discipling as seriously as other churches.
When people give money away they want to know where it is going. A narrative budget will help them understand how their tithes and offerings are being used for Kingdom work.