A version of this article appeared in the Los Angeles Sentinel.
The church budgeting process can be difficult or delightful. Either way it’s necessary. As I wrote in part one, churches have to show their members the money.
Church members have a right to know how their money is being spent. Budgeting church money demonstrates good stewardship of resources. In this part of my three-part series on church finance, I’ll outline the basic timeline and procedures for creating a budget.
Creating a budget for a church can be a long arduous process depending on the size of the congregation and the number of employees, ministries and community outreach programs. This process must include input from the pastor, minister of music, department heads, ministry leaders, stewards, trustees, deacons and the finance committee.
The finance committee is charged with ensuring that church operating costs are less than revenue projections. The entire church or the majority present at a church conference should approve the final church budget.
In order to create a final budget in time for the church conference, I recommend the following timeline and procedures:
Four to six months prior to the church conference: Distribute a “budget assumption form for expenses and revenue” to the pastor, minister of music, board and ministry leaders. Host a meeting to explain the budgeting process.
Require the participants to submit program plans, dates, costs and projected revenues within 30 days to the finance committee.
Five months prior: The finance committee analyzes the proposed personnel, programs and community outreach costs. The committee interviews each component of the church ministry separately for cost justifications. Then it makes expense recommendations.
Three months prior: Call a church finance meeting with the pastor, minister of music, board, ministry leaders and all interested church members to discuss the proposed budget. Church staff and members explain programs and expenses to the whole group.
Two months prior: The finance committee adjusts the budget following the church finance meeting. The committee redistributes a draft budget to pastor, minister of music, board and ministry leaders. It will hear any other concerns, then prepare the final budget draft.
One month prior: The finance committee presents the final budget draft to the pastor, minister of music, board, and ministry leaders for approval.
If the leaders do not find the budget to be ready, the finance committee will make any changes to the final budget in preparation for the church conference.
Church Conference: The finance committee presents the final budget to the entire church for approval. We pray!
The church budgeting process must be open, transparent and inclusive. Budgeting and saving money are essential to managing a church.
The Bible says in Proverbs 21:5, “The thoughts of the diligent tend only to plenty; but the thoughts of everyone who is hasty only to poverty.”
Next: How to Raise Money!
To find out how to create financially strong organizations and help families find financial security, join us for the Cecil Murray Center for Community Engagement’s Financial Literacy Program.
Mark Whitlock is a contributing writer for the USC Center for Religion and Civic Culture.