Budget meetings cause anxieties

Good people turn into narrow-minded bureaucrats.

Soon, the room is split into – the ones claiming they want to do ministry and the ones who claim there is not enough money for ministry.

Both are right.

Ministry cost money.

Ministry is also the reason your organization exists.

If there is so much rejection presenting your budget the traditional way, try something different and present your budget based on ministries. Don’t use labels such as staff, office administration, or building? All of it is needed to do your ministry. Turn it around.

The highest cost factor of your budget is most likely your staff. And it should be this way. The reasons are simple. Your staff is what makes you ministry work. Most businesses have what accountants call Cost of Goods Sold. This is a category on your income statement accounting for expenses occurred to produce the product you are selling. Non-profit organizations don’t use this category though should still consider that there is cost related to “creating” who you are.

Considering this fact, it will be easy to take the next step. Reshuffle your expenses and align them with your ministry. This will take some consideration. You might even make more than one attempt coming up with the correct percentages. Don’t worry, it is a great exercise for your budget or finance committee. Your treasurer will have an easier time later presenting the budget to your congregation.

Let’s look at the Church of the Holy Saviour and its expenses:

Looking at the graph you already know what your congregation will say: “We are spending all of our money on staff. If our pastor would be cheaper or if our secretary could work part time. Even better the youth minister is a volunteer! We can safe so much money.” Yes, you can – and you will cut off all chances of growth. Being the church in our secular world is hard enough, and doing it with the wrong staff is impossible to do.

Each of your staff members is so much more than only a position in an organization. He or she often has multiple functions. Your secretary is also the property manager. You pastor heads bible studies, visits the shut-ins, and much more. My approach is based on ministries your congregation offers. When you are ready to try this method, you need to start by defining what your ministries are. For this example, we split the expenses related to payroll into the ministry each staff members serves in his or her position.

The new picture painted is more realistic. Your building covers about 43% of all your expenses. Not even 10% are spent on your ministry outreach teams. Or, you will realize a quarter of total expenses are spent on the one-hour worship on Sunday morning.

Any of these numbers are neither good or bad. It is what it is, though it will tell your congregation and your finance committee what to change or where to focus on to make growth happening.