5 Factors For Next Year's Fiscal Budget

Budget

It’s that season when your fiscal year is coming to a close, and the budget process is resetting for next year. The good news is that as the years go by, budgets become more predictable and easy to reset. The bad news is we can get into a budgeting rut, and miss opportunities to steward our budgets for mission and vision achievement. Here are 5 factors to consider during this year’s budgeting process.

1. Outsourcing Is The Wave Of The Future

In a poll last year, Thom Rainer of LifeWay found that 1/3 of churches have increased how much they are outsourcing. At Mission, we have done this with Accounting and Human Resources through Third Road Management, and it’s been a major improvement in efficiency. Besides that, many people like myself lean into Virtual Assistants. I’ve worked with Belay Solutions for 3 years, and a Pastor I coach just hired a VA this month. Some other areas to outsource are:

  • Webmaster
  • Writing
  • Marketing
  • Social Media

2. Overall Staffing Costs Have Declined

Leadership Network recently found that the average percentage of a church’s budget going to personnel is 49%. We can assume that this is in large part due to increased outsourcing.

A helpful barometer for me has been to @@aim for a ratio of 50/30/20 on your Who/What/Where. 50% on your staffing, 30% on your cost to do ministry and 20% on your facility.@@

3. Opportunity And Risk Is Found With Debt

Debt for many churches can be crippling, and at the same time, most churches don’t grow without it. @@The downside of debt is experienced when it comes at the cost of funding your ministry.@@ It can also slowly change the culture from the inside out, from advancing mode to survival mode.

There are also moments to step out in faith and seize opportunities that involve debt. At Mission, we have remained debt-free thus far, but I am all for seizing every opportunity to advance - even with debt. A rule of thumb often used to is to carry 2.5 your annual income in debt, for the sake of advancing your mission and vision. 

4. Operate At $26 Per Person

If every church had every person giving $26 every weekend, every church would be fiscally healthy. As you assess this year’s giving and plan for next year, use this as a barometer for giving. $26 per person includes students and children as well. 

When we have this barometer, we can lead appropriately. When your church falls below the line it’s an opportunity to challenge with love. When you are above the line, it’s an opportunity to express sincere gratitude. 

5. Outside Funding Is Your Advantage

Only 2% of church budgets are funded outside of congregational giving. I think this is too low. Now, I’m not the chief fundraiser in our organization, so it’s easy for me to say, right? My theory is: if you are doing anything significant in your communities, then you are tapping into potential outside donors. @@People don’t have to fill your seats to fund your ministry.@@ Good people desire to give to good work, and Godly people desire to give to God’s work. Go into this next year believing God’s wants to build bridges through your financial needs. 

I hope this helps in your budgeting process this summer.

What rules are you and your church living by in the budgeting and operating of your fiscal year?