Determining and funding the church budget
Every church should establish and operate on a budget. Not only is it a useful management tool, but a budget can help pastors teach stewardship to their congregations. By preparing and presenting a budget to the congregation, pastors help their congregations realize that they are responsible for giving to God. They also learn what the money given to the church accomplishes.
Preparing the budget
Some months before the beginning of a church’s next fiscal year, department heads should submit their projected budget needs for the coming year. These written proposals should be submitted to a budget committee or a committee appointed by the pastor no later than three months, but preferably six months, before the end of the current fiscal year and the beginning of the next fiscal year.
The committee should meet with each department or ministry head and question any part of the budget project that seems to be excessive or unexplainable. If there is an area of disagreement regarding what was proposed and what the committee recommends that cannot be resolved between the department or ministry head and the committee, it should be noted for consideration by the church board.
After going over all departmental and ministry proposed budgets and interviewing the various leaders, the committee should draft an overall proposed church budget for the upcoming year and present it to the board for its approval, making special reference to disputed budgetary items.
The board should then study the committee’s recommendation carefully and analyze any disputed budget items. After much prayer and discussion, the board will draw up a proposed budget and recommend that the budget be presented to the congregation for their approval.
The proposed budget should be presented to the congregation for their approval before the end of the current fiscal year. Once approved by the congregation, any deviation from the budget by any church department and/or ministry must be by special written approval (usually by the board or a board member and the pastor).
Department and/or ministry financial reports that explain all income and expenses should be presented to the board at least quarterly to confirm that each is operating per the approved budget.
Before the congregation approves the proposed budget, pastors need to show them a yearly financial statement related to all budget areas: the previous year’s proposed and approved budget, how much money actually came in and was spent on each budget item, and what is projected for the coming year in the new budget. Afterward, the congregation will have the opportunity to accept or reject the proposed budget.
An approved budget should mark the beginning of a special stewardship emphasis taught by the pastor. It could be for a week or even a month in which every Sunday School class, every group, every meeting, every sermon, and every lesson focuses on the theme of giving, tithing, and stewardship.
Just as families cannot effectively operate without a budget, so also churches cannot operate effectively unless they are financially governed by an operating budget. It is essential for churches to practice and model good stewardship so their members will follow suit.
Originally posted 11/6/11.