Are on my mind at the moment. Since this is a topic I deal with almost daily, I though it warranted a post. While there are MANY philosophies on how to create a budget, they basically break down into two groups. Those who budget with the expectation that growth will come to help them meet the budgeted expenses and those who prepare forward budgets based on historical actual results, to do either, it is nice to start with an understanding of where the church is and what the vision and goals of the ministry are for the short and long term. I like to do both, create a budget using a flat line and also a "hope/wish/faith budget" relying on growth. With both of these expenses can pretty much be broken down into three BROAD categories before breaking down further. I will list them in their order of importance and percentage of the total budget they should consume (my opinion, of course)--
1. People/Staff(40%)- Without Vision the people perish, but without people, there can really be no sustainable vision. This is vital, and generally people also pay for themselves in increased attendance and involvement of the congregation.
2. Programs/Facilities/Overhead(30%)- This is earmarked for things like the weekly coffee, rent/mortgage, light bill, insurance, phones, signage, etc...
3. Missions/Savings/Growth(30%)- I really like to earmark each of these three as 10% of the total budget, 10% to missions (whether that is for Habitat for Humanity, an orphan, or water in Africa, etc.), 10% savings allows for financial stability and sets a good example for the members, and 10% for growth is usually used for special events/projects, future building or marketing, etc.
Of course, it's much easier to create such a budget than live it, but it can be done, and most churches that are successful for the long term have come up with a financial budgeting process that enables ministry.
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Budgets are a new hobby of mine. I have never done done one for a business, but personal budgets are a hoot. Thanks to budgeting we plan to be debt free by years end. My whole life I have felt that churches put too many eggs in the "we will raise this money" basket. I find budgeting on credit is a big mistake. Better to wait and pay cash rather than rush a new building on credit, but I realize this doesn't work in today's church market.
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