When putting together a church budget, several mistakes are commonly made that can haunt a church throughout the year and beyond. Here are five keys to a healthy church budget. There are more steps than these, but these are the big five:

  1. Don’t drastically overestimate projected offerings. This is a classic for those who love to “step out on faith” or have something they really want to do but can’t afford. The problem here will be a large deficit requiring draconian cuts, pleas from the pulpit, and questioning of the leader’s abilities to project. I know it’s tempting, but don’t do it. Keep your projections optimistic but sane. Here are a couple of principles with some exceptions: If your church is not growing, your offerings will not. Also, if your church is growing, offerings per capita will grow slower in the newcomers than in those attending. To avoid overestimating offerings significantly, it also helps to ask this question: If I’m projecting increased giving, where is that going to come from and what steps are we taking to make that projection a reality. The scariest part is many ministers/elders “step out on faith” without thinking through their part in making that step a reality. As a result, their step becomes a year-long problem that erodes church trust when repeated.
  2. Don’t underestimate Expenses. This is another “step of faith” some take. Rather than honestly gauge what expenses are likely to be, they put in numbers they hope for. If you think you’re going to spend 50% less on electricity than last year–have legitimate reasons. Don’t say, “We’re gonna try to turn the lights off earlier.” That won’t get it done. No wishful budgeting. Ask, “What reason do I have to believe expenses will go down over last year?” Sometimes they do. Just make sure you have a good reason to think so.
  3. Don’t underestimate projected offerings. Fiscal conservatives may be thinking now, “There’s no way to underestimate. Even if you did, so what? Now you have leftover money you can figure out what to do with.” Actually what you have is ministry you didn’t do. Assuming your congregation has adequate savings, underestimating offerings is likely to hinder ministry and momentum. The church obviously doesn’t want leadership to gamble with the church’s money. However, people give money to be used for ministry, not hoarded into bigger barns. Money can be rolled over to next year, but momentum is too hard to get to choke off cash flow to ministry, “just because.” If the church’s savings are depleted and this is an intentional step, fine. It’s unwise not to use what’s offered to the Lord strategically as it’s given. Have a plan. I once consulted with a dying 20 member church with more than $500,000 dollars in the bank who wouldn’t spend a dime of it. They call it “stewardship.” In light of the Parable of the Talents, Jesus might see it differently.
  4. If times are really lean, don’t shoot the goose. When times are lean, churches have the propensity to preserve money allocated for missions and benevolence no matter what. I think this is a good impulse–and right to a point. However, I’ve watched churches literally die from an enlarged heart that rendered them incapable of ministry locally to a point that meant their death. Let me just say it: Like it or not, local ministry and staff is the engine for everything else. They primarily constitute the proverbial goose that lays the golden egg for missions and benevolence. Starve those and you are also starving your missions and benevolence ministries downstream. Let me say it again, starving the goose is a serious, serious mistake. We don’t need an obese goose, or even a slightly pudgy goose. We do need a healthy goose, though. It’s OK to put the goose on a  temporary diet for other, worthwhile works. But, cut selflessly and wisely. Cutting staff salaries or growth generating ministries is a serious move that usually has ramifications for all ministry. Every budget has pork (noticeably not goose meat) that can be pulled. EVERY budget. Find it in yours, understanding what you see as pork may be goose to another.
  5. Always allocate money to the movement of God.. Prayerfully discern opportunity and areas of growth today. Invest there. Don’t continue to pour money into staff or ministries that clearly aren’t working. Give them a nice, generous, sunset–making way for a the dawn. Invest in things that have real potential or bear real fruit. Take a faith-based risk or two. Let mission guide the budget process, but let “how” the mission is to be accomplished remain open always. No missionary lives forever. No church lasts forever. What worked ten years ago or even last year may not be what God’s put in front of your church today or the next. So, a church’s stewardship of ministry opportunities is a matter for ongoing prayer and spiritual discernment.

The budget process is a vitally important process. Boring? Maybe. Violent in the board room? It doesn’t have to be.