April 26, 2016 Bill Demartini

Build Your Budget, Build the Kingdom

MAG Bookkeeping header image 4.26.16
What pastor wouldn’t want to rally leaders and volunteers around the vision for their church? The problem is knowing HOW.

One answer is actually quite simple and may surprise you: the church budget.

Build Your Budget, Build the Kingdom: How a Solid Financial Foundation Can Expand Your Kingdom Impact is a new eBook from Randy Ongie, president of MAG Bookkeeping. The book shares practical ways to leverage your church’s budget as a tool to build energy and collaboration in ministry.

In anticipation of the book’s release, we’re inviting you to join Randy and our friends at Church Community Builder for a webinar on Wednesday, April 27 that will teach best practices on:
  • Combining ministry and financial goals for better staff buy-in
  • Creating timelines for planning and budgeting
  • Useful financial metrics
  • And much more

After the webinar, the eBook will be available for download.

Part of the budgeting process includes a time to launch planning where pastors can give it focus and attention. In the book and the webinar, Randy (a former executive pastor) discusses how to coach your staff through annual planning and the budgeting process. Here is an example of the level of detail you will receive in the book:

1. Ask your senior leadership team to deliver clear ministry priorities for the next year to the staff.

It goes without saying that these priorities should be compelling and get your teams excited about what you can achieve together.

2. Ask each staff team to meet with their key volunteers (in light of these stated priorities) and plan what they would like to do in each ministry area, with specific actions in specific seasons.

Example: The Middle School Youth Group will go on a retreat in July so the upcoming 6th graders can get to know the leaders and older students quickly. The retreat will be held at Camp Running Bear, and we anticipate about 85 students and eight leaders. Remember that it will be tied to overall priorities.
If leadership has decided that the church needs to focus on evangelism over the next year, this might have an outreach element to it.

3. Pull together all of the annual planning detail into one document and review it with the senior leadership.

Look for alignment to the overall direction and priorities of the church and integration within each ministry area. An integrated plan would never allow major activities to be taking place in two or more ministry areas at the same time. Look for gaps as well as activity that may be out of alignment. 

4. After senior leadership is confident that the plan accomplishes the right things (and doesn’t include the wrong things), ask the staff or key volunteers to go back and estimate what it will cost to accomplish their plan.

Provide them with as much financial history as you can as a starting point. As these cost estimates come back in, start adding them to a budget worksheet/spreadsheet. Look for gaps or large increases and be sure there are no glaring errors. 

5. Meet with your finance team or committee and ask them to review finances year-to-date.

See how you are doing on the income side, where you’re within budget and which areas are over budget. Be sure everyone knows what is causing both. Ask the team to set a range for the next year’s budget. Try not to get an exact number, as groups work best giving ranges. Ask them to project a range that they think income should fall within. Be conservative when projecting income. I have seen more church budgets go off the rails in this area than anywhere else. You can’t project a large increase in income without having some reasoning for it.
These conversations with the finance team should be done at the same time as the staff is doing ministry planning. This projected income range should be provided by the finance team to staff leadership so that it’s ready to plug into your first budget draft.

6. Add the budget amounts that you control internally.

This includes things like money for cash reserves, savings for capital improvements, and accruals for longterm needs like a new roof. I also coach growing churches to consider creating a line item in your budget for new ministry development. Sometimes ministry opportunities come up that no one planned for, and it would be a shame to say “no” simply because it’s not in the budget. Add this information to your draft budget spreadsheet.

7. Initiate discussions with your senior leadership team around any new staff needs.

Do your homework on what this position will cost and when they might come onboard. If you’re not adding new staff, you might be increasing someone’s hours or changing them from part-time to full-time. Also, work with your personnel team to determine any staff compensation adjustments for the coming year.
Don’t forget to review and project for benefit cost adjustments and other staff-related expenditures. This work should be done early enough to include in your first budget draft.

8. Next, review the total budgeted expenses and compare it to the income range that the finance team recommended.

How does it look? I’m guessing one of three things will be true—you’ll be within the recommended income range (this almost never happens); expense projections will be higher than the income range (this is more normal); or expense projections will be lower than the income range.

 

A well-crafted budget process in not a cure-all that will guarantee smooth financial management at your church. But, it will provide a solid foundation that can be built on. It should increase collaboration, reflect collective priorities, and make scaling ministry easier.  

 

Join us Wednesday, April 27th at 1PM Eastern for the live webinar to learn about combining ministry and financial goals for better staff buy-in, creating timelines for planning and budgeting, useful financial metrics and more — and then receive the ebook to dig even deeper!

Reserve Your Spot Now!

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Bill Demartini

Bill Demartini

Bill DeMartini is the Marketing Manager for MAG Bookkeeping. Before joining MAG Bookkeeping, Bill attended the University of Georgia and worked for over 10 years in the B2B software space.
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