![]() Most congregations have a committee on finance and stewardship. Staff members who take some type of ownership for the budget are more likely to respect it throughout the year. Creating the budget is an important step in being a good steward of the resources God provides, so that the work we do serves God and helps people in ways that make a difference in our communities and the world. A well-thought-out budget allows your church to be effective in achieving its annual goals. ![]() Once you have decided upon the budgeting approach your church will take, you will need to set goals and define objectives that will allow you to accomplish your mission. This could be based on funding, pledges received, past levels of giving and projected growth, assessed needs or a combination of these criteria. The second step in this approach is to establish a target budget for the upcoming year. The church identifies each program or activity, the needs each program serves, and the past effectiveness of meeting those needs. The third approach, Program Budgeting, evaluates all programs and activities based upon their effectiveness at their current levels of funding and on their potential. Experts suggest zero-based budgeting as a useful approach about every five years to provide a fresh look at all programs and activities. However, it is useful for organizations, such as churches, whose programs and methods of operation carry forth year after year without change. This is a very challenging and time-consuming process. The second approach is Zero-Based Budgeting, a process in which each line item is built from the ground up, starting with zero rather than the prior year’s budget. While this approach might be expedient, it is not as thorough or as accurate as other budgeting approaches. ![]() Incremental budgeting takes the current year’s budget as a basis for the next year’s budget and adjusts each item for anticipated cost increases / decreases or activity changes. The Download the eBook!įirst approach, Incremental Budgeting - also known as line item or traditional budgeting - is a popular budgeting process among churches. 1 Deciding which one is the right one for your church depends on your church’s individual needs. There are basically three approaches used to build a budget. This will account for changes that might occur during the fiscal year, such as receiving more gifts than expected, or having to make unexpected repairs to your building. Those assumptions might not always prove to be true, so your budget needs to be flexible, not rigid. ![]() Sunday School and other education program expenses also need to be factored in.Ī budget is built upon certain assumptions. Planned expenditures including mortgage payments, salaries, employee benefits and expenses, office expenses, charitable giving and buildings and grounds maintenance. It consists of expected income such as tithes, offerings, rent from facility use, and bequests and gifts, as well as other sources by which the church realizes income. We know that God will provide but even though we trust that God will bless the work we do to serve him, we still need to have a plan - financially.Ī budget is simply a financial plan for a period of time. The reality is that it costs money to do ministry effectively, and a carefully thought-out budget demonstrates a commitment to the missional goals of the church. The annual budget planning process can bring feelings of unease and concern
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