#CHURCH BUDGET PERCENTAGES HOW TO#

Start by requesting voluntary pay reductions. Staff expenses are usually the largest, but most difficult, expenditure to cut. Use this opportunity to really prioritize existing ministries and put yourself in a position to consider new ministries that are emerging. What was once non-negotiable is now on the table. High impact ministries should stay however, some ineffective ministries may need to be eliminated. This exercise is probably overdue anyway. This is the easiest but may not be the best approach.Ī better strategy may be to trim all non-essential ministry expenses.

One approach that distributes the hardship of reductions across the board is a percentage-based reduction of 5% or 10% across all ministries. Ministry ExpensesĬonsider going through your ministry expenses line item by line item. If you cut any of these expenses without reducing your facility footprint, you will be setting your church up for serious issues in the future with deferred maintenance. Other significant recurring expenses include utility costs ($1-$1.50/SF annually), janitorial expenses, general maintenance, and capital reserve savings. Do not neglect these 4 areas. In addition, you should review all your merchant fees, insurance, and recurring subscriptions for services. Do your research so you're familiar with loan options before you talk to your lender: forbearance, deferral, and interest-only payments. Interest rates fluctuate, and you may be able to refinance at a lower rate. If you are carrying debt on your facilities, you should contact your bank. The primary recurring operational expense is likely your mortgage or rent. Each category should be addressed when going through the process of budget evaluation. In reviewing your expenses there are four general categories to consider: recurring operational expenses, ministry expenses, staff expenses, zero-based budgeting. Then determine if your cash reserves are adequate to cover any deficit (Note: Expenses like VBS, Summer Camps, Special Events, and Easter promotions often occur annually, but they are not equally distributed throughout the year). While most church budgets are established for a 12-month period in equal amounts, the reality is your giving and expenses do not flow equally over that time period. Consider your level of cash reserves. How long can you make payroll and meet essential obligations under current giving levels?Īdditionally, consider doing a cash flow analysis.

While churches create annual budgets, they aren’t necessarily accustomed to scaling back their budget as that may be requried this season.īegin by analyzing your revised income projections, considering the season we are in.

#CHURCH BUDGET PERCENTAGES HOW TO#

Reduce ExpensesĬhurches across America may need to re-evaluate their budgets to see how to survive the shortage in funding and to respond to new ministry opportunities in their communities.

There are two primary ways of handling a potential church budget shortfall: reduce expenses and/or increase general fund giving. This is a significant decrease in funding and can be stressful on church boards and ministries. Additionally, 31% of them are down more than 30%. The budgeting process that may have been fairly routine, even if it was a pain, has now become more important than ever.Īccording to national survey results in April 2020 from State of the Plate, 65% of churches have experienced a downturn in giving. Church attendance is down, and even the most regular attenders are attending less often. The charitable giving trends from boomers to millennials and Gen X, Gen Z, or even Gen Y are changing. Yet, the once stable funds used for general ministry are becoming somewhat less stable. Staff, ministries, and facilities are all affected by the money available in the general fund and are made possible by the generosity of the congregation. The general fund should be a Ministry Action Plan (MAP), which mirrors the values and vision of the church. While a church budget should fund staff payroll, facilities, etc., it should, more importantly, reflect the vision and ministry of the church.

This means the church has to have the financial means to support those staff positions and ministries. Most churches are led by paid pastors and staff who make the day-to-day ministries happen. It’s often a nuisance because leaders want to focus on ministry and not on the church budget.īut, let’s be honest: ministry costs money. However, for many church leaders, it is a nuisance or necessary evil. The general fund is at the heart of the local church ministry. With experience in business development and 25 years of pastoral ministry, Mike Stadelmayer, VP of Client Relations with Church Growth Services, has written the following guide for a church budget and general fund. Church Growth Services has been exclusively helping churches develop generosity for about 60 years.

Church budget percentages