"Pastor, we don't have a budget. We just do what the Lord leads us to do."
These words were spoken to me soon after I agreed to be the preacher at a small rural congregation, which used seminary students to fill the pulpit. When the church voted to hire me, they called me "pastor," but I did not function in that capacity. I was at the church only on weekends, and they knew I would probably leave as soon as my seminary days were over.
As an idealistic young student, I liked the thought of having no budget; it created in my mind the picture of a congregation sensitive to the Lord's leadership, without the bureaucracy associated with a budget.
After a few weeks, I mentioned to one of the leading men that I intended to introduce a new ministry in the next church business meeting, which was held at the conclusion of worship. This man asked me several questions about the ministry idea.
Then he said, "Don't bring up your idea this month. Wait at least a month, until I've visited with some of the men of the church. Your idea has merit, but it may not fit in with what some members think."
I found out later that he had called two other men, and they had talked about my idea. They had looked over the church's financial condition and decided I shouldn't broach my idea in the coming business meeting.
I realize now that these three men were not stubborn or unreasonable but practical. My idea wasn't that great, and the church was in more need of other ministries.
What I especially learned, though, was that the church did have a budget! It was in the mind of the three leaders who in conversation determined the financial priorities of the church.
A church budget is simply someone's priorities for use of church funds. These may or may not be the congregation's priorities, or even the present leadership's, but someone or some group has priorities that determine how money is allocated.
Since every church has a budget, we are wise to recognize it and consciously shape it. It may be efficient when a select two or three determine the budget, but it is not healthy.
Of course, once you open up the process to the congregation, even through their elected leaders, you've got to answer the question, "So, how much should we give to each ministry and line item?" Answering that question is not always easy, but it is what setting a budget is all about.
Here are some principles I use in helping a church settle that question.
The extent to which the pastor has input in this process depends upon the policy of the church, the tradition of the particular congregation, and the leadership style of the pastor. In order to be effectively involved in the budget process, I found I need to answer the following questions:
• Who really sets the budget? Most churches use some type of committee structure to formulate the budget, but a "paper-chase" study of these committees' duties does not usually explain who really determines the budget.
In many churches a budget committee, or a sub-committee of the board, has each church committee and organization turn in their projected costs for the year. The finance committee then evaluates these and puts together a total budget for the church.
In some churches, the finance committee does little more than total the figures turned in and determine how the budget will then be presented to the church. In other churches, the finance committee looks at each committee's or ministry's reports and then evaluates them in terms of church-wide goals and objectives, and, as a result, may alter those figures.
In either case, in most churches, the budget is pretty much set early on by committees or the leaders of those committees. If I want to have input into the budget, I must do it in the right place at the right time.
A pastor friend who moved to a larger church had saved his vision-and-dreams speech for the budget planning meeting of the finance committee. He was frustrated when his ideas had little impact as the committee gathered and tallied figures. It will take another year for his concerns to be reflected in the budget.
He not only needed to begin earlier, he needed to discover who really determined the budget—leaders in each of the committees—and talk with them first.
• What does the budget reveal about the church's ministry priorities? I have to understand the actual values of a congregation before I can effectively influence the budget process. And often the budget is the best indication of what the leadership values.
One church I know of has always said that it is a strong missions congregation. A quick glance at the budget seems to confirm this, but a closer look reveals that most items in the mission section of the budget are not really "mission support." It turns out that anything the leadership wanted but thought might be difficult "to sell" to the church was labeled missions.
As a result, the mission section of the budget was bulging with children's and preschool ministry activities. The new minister of education at the church was at first concerned at what appeared to be a lack of funds for her ministry, only to realize that the actual budget priority and her priority were the same.
• What are the non-negotiables? Recently, a lay leader in another church asked me for advice. He didn't really want advice, I discovered; he really wanted to complain about his pastor.
A certain bank for a number of years had financed all the church projects. The bank had been good to the church and had waived some fees and never penalized the church for late payments. The bank also had given the church favorable interest rates.
But when interest rates declined, the pastor was recommending that the church refinance at a lower rate with another financial institution. The finance committee voted down the pastor's recommendation. The pastor complained that they were not being good stewards of the Lord's money. The committee felt, by honor, tied to the bank that had seen them through tough times.
Idealistically, a church should be responsive and resilient enough to base all budget expenditures around needs and good stewardship. But churches, because they are people, frequently spend because of feelings, rather than objective reality.
These "sacred cows" do not begin as "golden calves." Generally these non-negotiables were at one time effective means of ministry. But there is not much to be said for fossilized, good ideas and ministries that have outlived their usefulness.
As pastor, I must not only discover quickly these non-negotiables, I want to pay tribute to their contribution to the church. If I'm going to suggest a change, it will have to be after I've gained the respect and trust of the congregation.
And it will have to be a change that is based in respect for the past: "In the past, this system has served us extremely well. I'm thankful for the people who put this practice into effect. For the coming decade, however, we may need a new strategy."
• Do those who are responsible for building the budgets understand my interpretation of the church's vision? If the church has a clear and concise mission statement, it makes setting priorities easier, but it does not take away all the difficulties.
Mission statements are subject to interpretation, and often people assume wrongly that because they are on the same page and reading the same words, they have the same pictures on the screen of their minds. But if the leadership does not understand my interpretation of the mission statement, all my attempts to influence the budget will lead to frustration.
One of the casualties of my ministry was a man who in budget committee fought for an issue he thought was important to the staff. He wanted the budget to include a "first class" leadership retreat for the deacons, church officers, and staff. Several factors were weighting the budget committee against this request, including the cost of the retreat and the history of a similar event five years earlier with a different pastor and staff.
This committee member took great risk by arguing for this retreat. After lobbying by phone with the other committee members and eloquently arguing for his position in the meeting, a motion to include the retreat in the budget passed.
The man was soon disappointed when he discovered that none of our staff believed this retreat was essential for the mission of our church.
Looking back, I now realize that when I had visited with him regarding leadership training, I had not fully explained myself. The staff and I believed the church, not the staff, needed a long-term program through which we would identify, develop, and train future leaders. As a result of this misunderstanding, although he did not leave the church, he never again took any significant risks in the committees.
Once the leadership, including me, has a common understanding of where we'd like the church to go, we can begin putting the dollars-and-cents issues on the table for discussion. All through the process, though, I aim to understand the views of the lay leadership. For even at the dollars-and-cents stage of budgeting, although we are now going in the same direction, we sometimes fail to aim at the same specific target. We may agree that evangelism is our highest priority, for instance, but whether we should invest in evangelism training for members or bring in an evangelist for a week is another matter.
How we work out disagreements at the dollars-and-cents stage of finances requires patience, fortitude, and wisdom. Few people are opposed to a particular line item receiving funding in a budget, and as a result, the issues often hinge on the amount line items or ministries receive. In the process of determining how much, congregations can become polarized.
As the discussion ensues, though, the pastor can avoid several traps as the committee or church seeks to determine what receives how much.
• The line-item trap. Someone who places a high priority on youth ministry notices in the budget that the line item for youth ministry is only half of that for the music ministry. This person concludes, with some disappointment and anger, that the church thinks more of music than youth.
Line items in a budget, however, are usually designed for administrative purposes. Taken in isolation, they don't necessarily communicate what a church's feelings are about a ministry. Sometimes you have to dig deeper into the budget to find that out.
In my early months in my present church, a couple of families met with me regarding the lack of funding for the youth ministry. Without fully examining the total dollars available to youth ministry, I hastily agreed with them.
I soon found I had spoken too soon. After some research I discovered that the budget line item for youth ministry shows only about 40 percent of the funds used in the youth program. But many expenses for youth ministry are scattered throughout the budget, under "administration" and "personnel," for instance. The ministry to youth was more important than the line item showed.
• The higher-priority-means-more-money trap. As a pastor and the leadership work through the priorities, they may assume that by giving more money to a ministry they are giving that ministry a higher priority rating. This works on the mistaken assumptions that (a) giving more money is the only way to raise a ministry's status and (b) a church has only one budget.
But every congregation has at least three budgets, and only one is the financial budget. A second and equally important budget is the time budget, which is called the church calendar. To make a ministry a priority may not mean more money but instead involve giving a program a better time slot on the church schedule.
Another budget is the pulpit-emphasis budget. Some priorities, with good time slots and adequate funding, go lacking because they are not emphasized by those who share the pulpit. When properly promoted through the pulpit, though, many ministries can flourish.
Recently, a minister to single adults told me about the turning point in her ministry. A church had called her to build a strong singles ministry. Funding and facilities were provided, but the ministry did not really have the support of the church until the pastor wrote a column in the church newsletter regarding the singles ministry and asked two single people to lead in prayer during worship.
This young minister said that the senior pastor's public endorsement was more valuable than a large increase in funds.
• The easy-compromise trap. Budget preparation time is one of the most stressful times of the year. Competing priorities bring inevitable conflict. In churches with large staffs these conflicts can escalate into ego wars, with staff members becoming battalion commanders and members, the ground troops.
The pastor may try to avoid these conflicts and quickly seek compromises: The missions people and the youth ministry people each want 10 percent increases for their respective ministries, but there is only enough money to give 10 percent to one. Solution? Of course, give 5 percent increases to each.
Often, however, these compromises, although they reduce tension, fail to construct a budget according to the church's priorities. If the church has previously determined that youth ministry was to be the top priority for the coming five years, then the compromise has done the church a disservice.
Certainly compromise is necessary in every budget process, but if everything falls into place without healthy confrontation and discussion of church priorities, it may mean that the official priorities of the church have been put aside for the comfort of church leaders.
• The meaningless-motto trap. One temptation is to have the church's priorities articulated in words and mottoes that have no relationship to reality.
Last year I received a copy of a church budget that had balanced ministry printed across the top of the page. The budget was divided into four areas: evangelism, missions, ministry, and worship. Line items were listed under each area. Each of the areas equaled one-fourth of the budget. It was obvious, though, that someone had spent time adjusting figures and tinkering with the process so that they would be equal.
Although every church does have to seek balance, it is wrong to assume that balance must be measured in terms of equal funding.
Guidelines for Effective Change
The church has difficulty changing because its message appears to contradict the call to change. The message of Christ is the same yesterday, today, and forever, but the careless member may hear that the church is the same yesterday, today, and forever.
The church budget, since it reflects ministry with people, has to be dynamic. It will have to change significantly from time to time. I've never found that pressure, political power, and smooth pulpit rhetoric encourage change as effectively as education, pastoral care—and patience.
In particular, in seeking to help a church make significant changes in a budget, I've found the following guidelines helpful.
• Be prepared for passionate resistance. Any change brings resistance, but change regarding the use of money brings resistance with passion.
People and organizations are dealing with values when they spend money. How we spend our money says a lot (although not everything) about what we believe is important.
At the same time, the church attracts people to whom values are important, and it continues to teach them that values are important.
Consequently, when values-driven people are encouraged to change how they spend their money, there will be sparks. The old line, "Let's not fight over money," doesn't work in the church precisely because we know that money represents something more than dollars.
The pastor, therefore, should not see all resistance as evil. We best encourage change when we allow people to disagree without questioning their virtue or spirituality.
• Introduce the change before you request the change. We pastors often see ourselves as the only one with real vision, and we act as if laypeople never have the courage to do what the Lord wants. I have found, however, that not only are laypeople as courageous as clergy but also that I am less visionary than I sometimes think.
Sometime ago I was in a meeting concerning charitable giving, and one of the speakers discussed the trend toward designated, or donor-directed, giving. I found myself resisting this idea, as I had been a strong advocate of unified-budget giving.
It took about six weeks and a couple of articles in a periodical for me to see the virtues and the possibilities of designated giving. When I did see its value, I discussed it with our finance chairman.
He was opposed to the idea for the very reasons I had been. It became obvious that the idea was not ready to be discussed with the entire committee.
I noticed, though, that I was angry that the chairman, as well as the committee, did not immediately share my enthusiasm! When I remembered my journey, I was able to be a little more patient.
• Go slow with changes in philosophy. Almost any church can be maneuvered or manipulated into making temporary changes in the funding process. Most members can be persuaded to postpone or delay their favorite ministry projects if they believe these projects will soon be restored to their previous levels of funding.
But some changes are not intended to be temporary but indicate a major philosophy shift. To deliberately minimize philosophical changes is not only dishonest, it is shortsighted. Individuals and constituency who have accepted a "temporary" change in the budget process only to find out it is permanent feel violated.
A good rule of thumb: The longer the impact of a change, the slower the change should be paced.
One of my predecessors changed the deacons from being an administrative board (making decisions for the church) to a ministry group (concerned with meeting people's needs). This change, though, removed the deacons from the budget process and permitted women to serve as deacons.
Such a fundamental change, however, didn't happen overnight. This wise pastor led the church to this position over a number of years, and the pace was slow. Now eighteen years later, this deacon ministry is alive and well.
• Let people know where you're going. People who know where they're going are best prepared for intersections and curves on the roadway. Likewise, ease in budgeting is directly related to a clear vision of the destination, and that means a clearly defined mission statement.
I am becoming increasingly impressed with the practical value of a congregation having a church vision, or mission statement. By encouraging the church to participate in formulating the mission statement, the pastor not only builds stronger statements but also gives the members ownership of the church's direction. Then when the pastor addresses the vision from the pulpit, he or she is not seen as a modern Moses chiding people for their failure but as a leader who is holding before them a map showing where together they are going.
I've found that I need to articulate the church vision in a sermon at least once a quarter. In fact, one Sunday each year we call "Vision Sunday," at which I preach about the church's vision. We push for attendance and pull out the "bells and whistles." But at least three other times during the year, I preach on the vision, without labeling it as such, trying to find different ways to express the same theme as on Vision Sunday.
• Listen for underlying issues. Budget battles may not be about money but about someone's personal crisis. The opposition may not result so much from differing priorities as from a hurt or misunderstanding. Often conflicts over a change in budgeting provide an opportunity to find the real issue.
An individual in a church I previously served was highly vocal about a change the budget committee was proposing. This man had used his Sunday morning Bible study class as a platform to oppose the new budget.
When I heard one Sunday afternoon of his abuse of his role as teacher, I was angry and ready to confront him, but his wife called me before I had the chance. She suggested I go by and see him at work, saying, "He really needs his pastor right now."
When I went by his office on the following Monday, he told me of the discouragement he felt about his work and how a remark I had made in the pulpit appeared to be insensitive to people in his situation. At the conclusion of the visit, he told me he owed me an apology for what he had done in the previous day's Bible study hour.
Later one of our older, wiser church leaders explained to me, "Pastor, it's not socially acceptable to stand in a Bible study class and oppose your pastor for his insensitivity, but it is acceptable to oppose the programs your pastor supports."
• Maintain your character even if you have to modify your vision. Vision and mission are changeable. Character is a non-negotiable. Leading a church to redirect its resources will be an ongoing process for the pastor, requiring compromise and a change in direction from time to time. But rarely do you lose your ministry in a local congregation over a disagreement regarding funding.
Sometimes, though, in an uncompromising passion to sell our vision to the congregation, we modify our character. The results are usually disastrous.
A highly respected pastor in one community I served wanted his church to have their own retreat center. He was a visionary leader who could inspire people to follow him. But in the process of selling this idea, he exaggerated the benefits offered by one of the proposed sites, and he publicly lost his temper with one family who questioned him in the process.
The church voted to buy the retreat center, but from then on, the church discussed less his visionary ideas and more his character. He eventually left the church, bitter and angry, even though for several years he had been highly effective.
Our vision can be modified more easily than our character repaired and restored.
Determining which gets how much challenges churches regularly. And helping a church change the level of funding for items is a bigger challenge still. Challenge, of course, puts it mildly.
Still, all of this work—and often it is just that—comes down to helping our congregations accomplish their calling. And helping a church do that, no matter the challenge, is central to our ministry.
Excerpted from "Mastering Church Finances," (Christianity Today International).
This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations."
Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.