American churches tend to operate with the mindset that budgeting is a formal, annual process that must be performed in a manner and time frame that aligns with the church's fiscal year. In reality, there is no legal requirement for such a formal or annual process.*
Fluid, dynamic alternatives
With improved technologies and availability of more timely financial information on a regular basis, churches are able to monitor and forecast activities and costs on a more dynamic basis than has been the case in the past. As a result, some churches have adopted alternatives to (either as a supplement or in lieu of) the formal, annual budgeting process that are more fluid and dynamic. Such an approach allows church leaders to adapt on an ongoing basis to changing expectations regarding revenues and other dynamic developments.
A more dynamic budgeting or forecasting process is likely essential for a church undergoing rapid change—particularly a church experiencing rapid growth or a church that has experienced a sudden and unexpected challenge or crisis. Whether a church chooses to abandon formal, annual budgeting, or not, is a decision to be made by its governing body and possibly (depending on the church's governance model) its membership.