Working with churches in the realm of generosity, I see it quite often – common mistakes in the church budget planning process. I see these with regularity, which makes me wonder if perhaps you too have committed one or more of the three most common mistakes in your church budget planning process and not realized it. (It’s ok – not only will I share with you what these three mistakes are, I will also share some ideas on how to avoid or fix them!)
The three mistakes listed below come straight from a recent webinar on the subject. You will want to pull it up soon to hear Jim Sheppard, one of our Principal Partners at Generis, and William Vanderbloemen of Vanderbloemen Search Group discuss these common mistakes made in the church budget planning process.
MISTAKE #1 – Operational Expense Mistakes
Regardless of church size and mission focus, there are three common line item “categories” in every church budget: people (personnel) expenses, building/facility expenses, and everything else (ministry, missions, etc.). What problems do we typically see in this area?
Churches often let the people and building/facility expense categories grow too large, at the expense of ministry and missions. The most common mistakes here are:
- staffing expenses that have grown larger than they should for a specific church’s model of ministry.
- facility costs, usually including over-sized mortgage management, on a space that is too large or was a bit too aggressive financially to construct.
If you have too much going to one or both of these categories, little is left to actually fund the mission of your ministry! For example, if you have 50% of your budget going to personnel expenses, and 40% to building/facility expenses, that only leaves 10% for everything else. And that 10% is supposed to fund all of your ministries and missions while staying within budget.)
So what portion of a church’s total budget should these categories hold? That depends largely on your individual church, but here are some benchmarks to consider:
The standard rule that has floated for years is to keep personnel expenses between 45-52% of total budget. But that isn’t appropriate for every church. It’s too much for some, and perhaps not enough for others. It depends on how you do ministry, and what resources you provide.
- Are you a staff-driven church, or one that is more congregationally driven, leveraging a large volunteer pool?
- What kinds of programming do you offer? A church that offers an on-site counseling center, daycare, or school might have larger personnel budgets than those that don’t have those programs on site.
- A church that outsources some roles might have a lower total personnel expense. I am seeing more and more the outsourcing of several areas previously handled by church staff, including communications (print design, website creation and management, video production of church announcements, etc.) and finance (accounting, payroll, etc.).
- What is too much or too little? Vanderbloemen shared that a personnel budget running lower than 40% or higher than 65% would both be numbers that might indicate need for some study and review.
Did you know 31% of all online giving occurs in the month of December? 18% of total giving happens in December. And, even more shocking is this statistic – 12% of all giving occurs during the last three days of the year!
Here’s a snippet from Network for Good’s Digital Giving Index infographic recapping 2015 giving. (view infographic online)
Many of your givers often want to make their year-end gift on the very last Sunday of the year. This year that Sunday falls on December 25 – Christmas Day – while your people may likely be out of town enjoying celebrations with relatives and friends. More significant - I see many churches in my area not even planning to have worship services on Christmas Day this year. (If you’re doing an online or streaming service on Christmas Day, make sure your offering moment is well prepared!)
I anticipate there will be several who will drive to your church office during the last week of the year to give that last gift in time to include it in this year’s tax deductions. (I remember doing this more than once before the convenience of online giving.)
What should you be doing to prepare for this?
I want to share a very important task with you today. This is an idea that, if you implement it by December 20, will increase giving in your church during the last two weeks of the year.
We know a large percentage of giving happens right at the end of the year. One third of all charitable giving happens in the last 3 months of the year, and 18% comes in the month of December. Also 31% of all ONLINE giving occurs in the month of December! Do I have your attention?
So here’s a way to receive a bigger slice of the pie. I’ll get right to the point of this post, and then let you read on for the full story: prepare and send an 11-month giving statement by December 20 (earlier if possible).
I’m not like most people sitting in the seats of your worship center during the weekend. I monitor giving closely. My wife and I set giving goals every year, and we strive to reach them. Giving is a priority for us.
I recall a few years back when I thought we were right on track toward our giving goal. At the end of December, I ran my usual giving report from my personal finance software. (I said I’m unusual, so here’s more proof: I actually run giving reports in my personal finance software!)
Expecting to see my giving at a particular place, I was surprised, (shocked actually) that where I THOUGHT we were for the year, and where we ACTUALLY were, didn’t match. We were significantly behind. How could that have happened? It didn’t matter – it had happened.
Fortunately it was December 30, so I was able to run a check up to the church office, and our goal was attained. (I am now in the practice of running my giving report more frequently. I don’t like last minute surprises!)
While engaged with churches across the country, I get the opportunity to work with some really outstanding people and organizations. Sometimes these people have resources and expertise I suspect my readers might value.
And that’s the case with Don Corder, Founder of The Provisum Group - an organization driven to assist pastors and leadership teams in the effective day-to-day management of the church. Don and I met while I was engaged with his church in a recent generosity initiative. His church is also a Provisum Group client, and they speak very highly of the assistance they receive from their partnership.
I had a recent conversation with Don to get a bit more information about the book and his work with churches. Here’s what he had to say:
Q: You recently wrote a book called Minding His Business - what prompted you to write it?
A: I wrote Minding His Business for one reason: To make pastors’ and ministry leaders’ lives easier by sharing 35 years of experience conducting business in and out of the Church. If you think about it, the people God calls to be pastors are usually creative, relational lovers of people. That person is more like an artist than an accountant. Yet, sometimes pastors are expected to have expertise in accounting, finance, marketing, web development and more. They are sometimes expected to be pastors and CEO’s. It does not happen in all churches but it does happen in many. It is a recipe for burn-out and failure.
Minding His Business is a business primer written specifically for churches and faith based charities, but written to the right side of the brain. The book is divided into 40 short, easy to read chapters and the content is written in parable and anecdote. On its pages you will read of church after church facing similar challenges, what was done to meet the challenge, and how it turned out.
Q: Tell me about the book and how it helps “make life easier” for those in ministry.
A: After years of helping churches all over the United States with their business administration, I kept seeing the same problems and challenges happening over and over again. I began to realize that there are very few “new” problems in the Church. There are just “new” people having the same “old” problems, usually for similar reasons and requiring similar solutions.
Count on it: your givers and potential givers are not all alike. In fact, they break down into at least four kinds of givers.
The Generis team has just released a new resource designed to help pastors in churches across the country increase giving – with all four types of givers.
This new, 26-page e-book will share with you the differences between each of the different types of givers, as well as what you can do to bridge the gap between funding and vision.
This new resource will:
- help you identify the different givers in your ministry
- give best practices to engage different types of givers
- encourage and equip your discipleship efforts
- and much more!
The more you recognize different types of givers and meet them at their level of need and expectation, the stronger your culture of generosity can become.
This guide, available to you now as a free download, was designed to equip you with the knowledge Generis has gained through 3,000+ successful capital campaigns. This e-book provides you with a practical tool to help fund your church into its next phase of ministry expansion.
Looking for more resources like this one? Check my resources page for more great material!
Looking for more information or personal assistance? Let me know. I’d love to help you and your church fund its God-sized vision!
I did something a couple years ago that was super helpful to me and to the churches I serve. I asked for feedback. I asked for input. I asked the church leaders in the trenches day in and day out what they needed most in the realm of generosity.
That feedback led to several practical blog posts about creating a culture of generosity, preaching on generosity, and how to talk about it outside the offering moment. (Great stuff – thank you for requesting it!)
It also led to the creation of several e-books about giving technology, communicating to impact giving, and the importance of recurring giving.
And now it’s time to circle back and ask again:
What do you need, want, and desire most to help you and your team impact the generosity of your people to fulfill the God-sized vision of your church?
As is always my focus, I want to make sure I’m providing you what you need – not just what I think you need. So I would love to give you an opportunity to share with me exactly how I can best help you.
Please take five minutes to answer a few quick questions for me. I’ve put together a short survey (yes, it’s short – I promise!) to allow a quick and easy way to speak into what’s coming in the near future.
Now is the time. The floor is yours.
I look forward to hearing what you have to say.
TAKE THE SURVEY
I recently had the chance to do something I really enjoy doing – talking with a pastor who just finished up a two-year generosity initiative using our One Fund approach. This particular pastor leads a growing church that has surpassed its goals, so the conversation was encouraging for us both.
Because I value sharing with you what I see working in other churches across the country, I wanted to let you in on a few key points he shared with me. Whether you are considering accelerating generosity in your church in the near future, or you just need a healthy dose of encouragement today, this post is for you!
So here is Pastor Matt Miofsky giving you five keys to a successful generosity initiative, based on his experience over the last two years at The Gathering. (These stories you’re about to read are just amazing – too good not to share!) Thanks Matt for your willingness to share your journey with us!
1. Prepare yourself ahead of your congregation
The winter before we launched our One Fund initiative called Chain Reaction, Rusty issued a challenge: my wife and I should go through some personal generosity introspection first, ahead of our people. And we did.
We were in the process of buying a new home at the time. When we stopped to talk about our personal levels of generosity, we soon realized we couldn’t be the generous people God was calling us to be and still move forward with the purchase of that home – at least not at that time. It would have throttled our ability to give at the generous level we sensed God challenging us to attain.
So we made a commitment. The topic of home buying was off the table for the next two years. We set a goal of doubling our tithe for Chain Reaction, and we gave more than we have ever given before. My wife and I found so much joy in being generous! It helped us be content in our home for two years. We could now talk with authenticity about what we were learning. And it equipped us to lead stronger conversations and to ask better questions.
The Christmas season has once again come and gone. You might already be seeing New Year’s resolutions in the rearview mirror. And your people may be settling right back into life as usual. It’s always interesting to see just how quickly that happens, isn’t it?
Your people may also be getting back to their normal routines in giving. But now is the optimal time to reinforce the message of generosity you shared during your special Christmas offering (or your Thanksgiving offering) late last year. Now is the time for celebration!
Here are three ideas you can use in the upcoming weeks to create a celebration of your church’s holiday generosity:
1. Videos, Photos, and Social Media
A picture is worth a thousand words and video is an impactful way to evoke heart-level emotion. With social media channels today, your message can quickly travel far beyond your inner core of people. Any opportunity you have to show your people the result of their generosity is a moment worth taking. (Showing these as introduction to your weekend offering is also tremendously effective!)
Check out this example of how The Gathering used video and social media to celebrate the impact of their previous year’s generosity to encourage this year’s Christmas Eve offering. If this isn’t motivating, I don’t know what is! (Nicely done!)
Then they sent out this message and video to build excitement for the upcoming results announcement of this year’s Christmas Eve offering!
People just don’t like to talk about money. Maybe you’ve already come to that conclusion. But did you know this? More people dislike talking about money than death or politics or taxes. (Yes, you read that right!)
A survey from Wells Fargo last year revealed “nearly half of Americans say the most challenging topic to discuss with others is personal finance.”
It’s not just your church. It’s not just the people at your church. No one seems to like it!
Interestingly, although conversations about money seem to be avoided or heated, financial concerns are staying top-of-mind. Two in five people in the survey said money is the source of the most stress in their life, and one in three people said they’ve lost sleep worrying over finances.
And when you look generationally, 71% reported learning to spend and save from their parents, but only one-third of today’s parents reported teaching these principles to their children. You see, there’s a fallout happening.
Giving is perhaps the best spiritual tool we have in our inventory – and often the most ignored. As a result, many church leaders find themselves in a giving rut, stuck in habits and routines that limit the generosity of their people. (We talked about those habits in my last post.)
But today I’d like to focus on the solutions. What can church leaders do when they find themselves stuck in routines that actually work against growing the generosity of their church? I’d like to propose six solutions to get you started.
1. GIVE YOURSELF PERMISSION TO IMPLEMENT CHANGE. SLOWLY.
When you realize you need to make a change, the first thing to do is give yourself permission. Change things up when they need to be changed. But do it slowly. Gradually.