About a Church Budget
As nonprofit organizations, churches draft detailed budgets to match projected income with their day-to-day expenses and growth plans. Church budgets are often drafted with input from a range of people, and may be subject to approval by a board of directors or group of church elders. Churches face unique challenges in the nonprofit world, adding unique considerations to the formation of church budgets. Understanding how church operations affect budgets can help you to draft a thorough budget for your church, which needs to include several aspects of church finances.
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Salaries
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Salaries and wages can be challenging issues for churches. Church organizations generally rely on a wide range of volunteers, for everything from playing music on Sunday morning, to teaching children in Sunday school to carpentry and electrical work. Churches often hire leaders for different areas of operations, such as a praise and worship leader, a children's ministry leader and a community development leader, who are each tasked with managing a specialized and revolving team of volunteers. Church salaries are often the most variable expenses in a church budget. When a church hits very hard times, it is likely that a good number of paid church employees will be willing to take temporary pay cuts or to forgo their salary entirely, making more room for other budget expenses.
Overhead and Administrative Expenses
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Overhead and other expenses are not as flexible as salaries for churches, although savvy church leaders can often solicit product and service donations to alleviate budget expense items. Overhead includes things like electrical utilities, water and trash pickup services. Administrative expenses include things like fund-raising campaigns, marketing expenses and furnishings. Creativity is key when budgeting for general expenses. When creating a budget, look at each line item and ask yourself whether that expense can creatively be reduced or eliminated to keep costs as low as possible.
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Missions
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Churches are unique in that they frequently forward donations they have received on to other nonprofit organizations and individuals in need. A church has to budget for all of the expenses necessary to run and grow, but it also has to budget for the money it plans to give to sponsor missionaries, help churches in impoverished countries, provide free assistance to the community and other externally focused expenses. Churches often keep a fund for missionary work and other giving, allowing their congregation to earmark their donations for the fund if they wish.
Income Considerations
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Income can be unreliable at best for local nonprofits, and churches are no exception. The real challenge in creating a church budget derives from the fact that expenses can be planned and relied on, whereas income cannot. Existing churches have an edge over new congregations, since they can use previous years' donation info to make predictions about future income. This is the reason that creativity is the key when planning for expenses -- the more you can reduce or eliminate expenses, the more prepared you will be for unexpected, temporary drops in income.
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References
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