Author Archives: General Baptist Ministries

5 Reasons to Develop a Church Budget
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October 13, 2020

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Church Growth, Congregrational Ministries

5 Reasons to Develop a Church Budget

by Franklin Dumond, Director of Congregational Ministries

Many church leaders resist developing a church budget. For them planning the financial life of the church seems to lack genuine spirituality and thus eliminates faith.
But achieving objectives does not happen by accident. It takes a plan, supported by budget dollars, to realize the goal. To paraphrase the Apostle James, faith demonstrates itself with a working plan.

  1. Developing a budget requires the church to develop a plan and to plan for at least 12 months in advance. This is perhaps the most important aspect of developing a budget since all too often churches function only in the immediate rather than recognizing the longer term.

    Even households that do not write down a household budget often find themselves signing up for an equal monthly payment plan with the local utility. In essence, they develop a utility budget.

    By simply looking back over the previous 12 months of expenses church leaders can project many of the basic needs for the upcoming 12 months.
    By prayerfully considering “What does the Lord want us to do in ministry?” additional programs and line items can be developed and placed in the budget plan. In many cases exploring this kind of question will result in the need to plan for more than 12 months to be able to accomplish the goal.
  2. Planning in advance also means that permission is given in advance to spend within the agreed on categories included in the budget. One of the greatest drawbacks of frequent business meetings is that what is done in one meeting can potentially be re-done or un-done in the next meeting. A church with a monthly business meeting could potentially rework their ministry plan every month. While flexibility is important, so is continuity and consistency.

    Flexibility must exist in the church budget. For example, if income is inadequate then certain budget categories may not be funded. One wise pastor when faced with the prospect of an economic downturn explained his budget strategy to his finance team. “We’ll pay utilities and salaries. Everything else is on hold.” But because he worked with, rather than against, his leadership the impending economic downturn did not affect the congregation nearly as seriously as originally projected.
  3. Budgeting helps develop strategies and establish priorities. Since no church can do everything, budgeting helps determine what ministry priorities will be chosen. Also, budgeting helps identify the strategy used to accomplish those ministries and it helps church leaders set goals that are realistic and meaningful.

    For example, when adding staff positions it is sometimes wise to begin with interns or short-term contracts. Some pastors plan for the salary in the full-year budget but only fill the position later in the year. This allows some stockpiling of reserves to carry the new position forward.
  4. Budgeting can reduce turf wars over available resources. A wise budget plan, for example, will generally allow for the program budget of a ministry to be spent over the course of several months. This same plan, however, also recognizes that one-time programs, like Vacation Bible School, may spend their entire budget in just a few days.

    Because a budget is a projection, the use of a check request system or purchase order allows the financial leaders to review needed expenditures. Sometimes program leaders are unaware of how much of their program budget they have spent. At other times program leaders may wish to make a larger purchase at year’s end if the dollars are available for such an expenditure.
  5. Budget planning can also help unify a congregation. When the plan is explained in a town hall or reviewed in a business meeting everyone has an opportunity to understand priorities and strategies. Only rarely does a church commit the sin of over-communication. More likely the church will commit the sin of under-communication.

    I always found it helpful to profile the financial summaries in the church newsletter or bulletin under the two-fold categories of:
    Our Budget Needs…………………..$______________
    The Lord’s People Have Given….$_____________

    When folks in the pew come to understand finances from a spiritual perspective every check in the offering plate becomes a testimony of spiritual maturity.

Ready for the next step? Then download our e-book “YEAR AHEAD PLANNING: GETTING READY FOR 2021“. YEAR AHEAD PLANNING is a Church Talk Publication designed to help stateside General Baptist leaders cope with the “new normal”.

4 kinds of budget plans
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October 6, 2020

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Church Growth, Congregrational Ministries, Pastoring

4 Kinds of Budget Plans

by Franklin Dumond, Director of Congregational Ministries

It was a cold winter day some years ago. I must have had the boys with me for lunch that day at one of the local fast-food restaurants. The place was rather crowded. This was long before pandemic restrictions reduced seating capacity! We found a booth and landed with a tray of food.

Just as I sat down I recognized two older ladies from one of the small churches just north of town. They were seated at the booth behind us. They could not see out our direction so their conversation was not interrupted by our arrival. While unloading the tray and passing out sandwiches and drinks I could not avoid overhearing part of their conversation. Apparently, there had just been a business meeting at the church the evening before. One of them remarked, “I’m so glad we were able to pay all the bills this month.”

This little church had fallen into the trap of paying bills as they accumulated. They probably voted on each payment to give permission for the treasurer to write the check. Their simple financial strategy consisted of paying the bills when money was available.

Just like every household, every church has a spending plan. Most churches and many individuals use a spending plan that anticipates future expenditures based on past experience. Most churches write down this spending plan in a budget that is prepared in advance by church leaders and approved by the congregation.

Even churches without a budget document have a spending plan. Often this is a plan that operates only out of current cash flow, so if we have money in the bank we spend it. This plan often reacts to felt needs and the current balance in the checkbook. This approach can have serious shortfalls.

  • First, this approach may only meet emergency needs or very basic essential needs as the mindset can become “We only spend when we have to spend!”
  • A second drawback to only operating out of cash flow is the failure to plan for future needs.
  • The most serious drawback to only operating out of cash flow is that this approach may keep the church on a hesitant spending plan because the objective too often becomes one of maintaining a cash balance rather than one of meeting needs.

4 Kinds of Budget Plans

For churches with a written or published budget, there are at least four kinds of budgets.

  1. Zero Based. Zero-based budgeting reduces all line items on the budget down to $0 at the end of the year and then rebuilds the budget based on needs and accomplishments. In a practical reality where utilities, insurance, and building maintenance cannot be reduced to $0 there really is no such thing as a true zero-based budget.
  2. Year to Year Carry Forward. This kind of incremental budgeting assumes that we will continue to do what we have already been doing with necessary adjustments to ensure that we continue to fund what we have always funded. Some years ago I managed a local community utility assistance program. The program was funded by a Federal grant. Interestingly this program had originally been intended only for a one-year life. The heading on the grant form indicated, however, that this was the 17th renewal of the one year program.
    Incremental budgeting often starts with last year’s budget and says, “Let’s bump this up 1%.”
  3. Faith-Based. Many visionary leaders advocate for a faith-based budget. This kind of spending plan projects costs without realistic projections of income. If there are more visionary influencers in the congregation than those with an administrator mindset the church may choose to overextend itself with new programs, expensive building additions, or excessive staffing. In these cases a financial crash is likely. It is also likely in these cases that the church will not recover from the financial crash.
    One variation of the Faith-Based Budget is an A and B Budget. In this plan, basic operations are identified in Plan A. Expansive programs or new ministries are included in Plan B with the provision that Plan A is funded fully before Plan B is activated.
  4. Hybrid Budget. In this case, realism requires that some line items be carried forward since things like utilities and insurance will be just as essential next year as they have been this year. But other categories may identify programs or ministries that were only designed for one year or that no longer serve a purpose so they are ended or replaced with new endeavors.

First Steps to a Church Budget

Whether planning for a budget for the first time or starting early on next year’s plan there are a few starting points that will make overall development easier.

Take a look at the totals from the previous 12-month income/expense reports. Extending the year-to-date rate of expense or income to project a full year may be valid but it may not pick up on seasonal fluctuations that will be identified in a full 12-month review. For example, some property insurance premiums are paid annually. If that one-time expense has not yet been paid this year then projecting the zero expense on the insurance line item will not be accurate. On the other hand, some churches have a tradition of year-end giving that will not be identified in the year-to-date report.

Salaries are likely to be a major item in most church budgets. Salary packages should be reported by the component items that make up the total package. Base salary, what the employee lives on, includes take home, tax withholdings, and employee contribution to retirement and health insurance. Social Security withholdings, health insurance, and retirement should show as separate line items. These are benefits, not bonuses!

Consider income trends both in the community and in the congregation. Currently, some parts of the country are seriously impacted by the pandemic with above-average unemployment. In other parts of the country, employment has hardly been impacted.

Allow flexibility. Budgets are best-guess projections and though they are generally pretty accurate, on other occasions the best-guess can be wrong. Who can predict a severe winter with several weeks of weather-related cancellation and skyrocketing heating bills?

Jesus advocated advance planning, so let’s take His advice.

“Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you” Luke 14:28-29

Ready for the next step? Then download our e-book “YEAR AHEAD PLANNING: GETTING READY FOR 2021“. YEAR AHEAD PLANNING is a Church Talk Publication designed to help stateside General Baptist leaders cope with the “new normal”.

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September 29, 2020

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Church Growth

How Churches Grow: Pastor-and-Allies Strategy for Church Growth

by Franklin Dumond, Director of Congregational Ministries

The wise pastor who leads a church into growth recognizes early on the need for partners or allies to help accomplish this important task. The allies necessary to result in growth vary according to the size or style of the congregation.

  1. The Small Size Single Cell Church
    The small church functions as a single cell. This means that everyone knows everyone else and the average attendance will generally be 50 or fewer but may extend to 100-150 if a larger family clan is included in the mix.
    In the single-cell church, the pastor must draw his allies or partners from the inner circle of influencers and must have a majority of the congregation sympathetic to or directly involved in the process of growth. To work around or against those who hold influence or to identify with only a minority of the congregation can result in destructive conflict. This conflict almost always results in zero growth unless the replacement pastor moves to town with a larger family than the pastor who left abruptly.
    One strategy here would be to develop new classes or interest groups. The groups are developed one at a time with the pastor as an initial leader and with two or three key congregational leaders recruited along with four to six new members. As the group grows to include new members then leadership can come from within the group that is gathered. Repeated on a two-year cycle, this strategy can double a small congregation in 4-6 years without transforming it into something it does not want to become.
    Because about one-half of the churches in our country are small churches of fewer than 75 people, and because a single cell church can easily stretch to accommodate 100-125 people, most churches in our country could easily double in size without the painful transition of becoming a different type of congregation organizationally.
  2. The Medium Size Stretched Cell Church
    In the stretched cell/medium size church new programs attract new people. A medium-sized church will generally have 100-150 in attendance but may extend to 200, 300, or even 400 depending on the expertise, leadership, and energy level of the pastor and key lay leaders.
    Leadership, however, is drawn from original or long-time families. Thus the allies or partners that the pastor must enlist are the leaders who will organize the new ministries.
    Growth in the stretched cell/medium-sized church is limited by how large the cell can be stretched. For the pastor or key lay leader who can extend pastoral care to a large group of people, this model will stretch farther than it will for the leader whose people skills are not as well developed.
    Often, the tie that holds ministry relationships together in the mid-sized church is the relationship with the pastor. The pastor in a medium-size church often gives permission for ministry to happen. The pastor also provides general oversight to a variety of ministry activities.
    Decision making structures are significant growth restricting obstacles for this size church. For example, the monthly business meeting that effectively governs the single-cell church (where everyone attends everything), will not effectively govern the program-oriented middle size church. For one thing with frequent business meetings regular programming often cannot be established because everything must stop for a business meeting.
    Stretched cell/medium-sized churches will face a definite limit on how large they can become. The often discussed 200 barrier is much more prominent in this group of churches.
  3. The Large-Sized Multiple Cell Church
    In the large church, the pastor’s allies are most likely the staff employed as specialists and ministry leaders. A few high-capacity volunteers may remain as visible leaders.
    In the multiple cell church, there are too many people to know everyone. There are numerous groups and ministries where people can become involved. The church is a congregation of congregations with leadership drawn from several groups, classes, or cells. Staffing is very important in the multiple cell church since specialists are needed to resource, train, and monitor the lay leaders of the various ministries. Worship done with excellence and effective preaching, generally with life application type themes, are key elements that cannot be overlooked. Multiple worship services are often featured in these churches.
    Ministry leaders (often associate pastors) function much as the pastor does in the mid-size church. Ministry involvement is the tie that binds. Assimilation strategies are developed around the personality and the style of the congregation with an emphasis on small-group ministries that enlist a high percentage of the congregation.

Summary:
Effective ministry can never be a solo effort. Moses’ father-in-law Jethro saw the value of having a team to work with the leader. In Exodus 18 he criticizes Moses’ solo leadership and outlines a method of shared responsibility. The wise leader in any size church will recognize the value of a team effort. The size and type of church, however, determine how the team is developed and who is included in it.