Wise church leaders plan for such eventualities. Regular givers lose their jobs and move away. Lay money aside during the high income months so it’s there for the low income seasons. If, for instance, you know that your church is going to receive more money in December, but less income in the summer, factor that in to your planning. In many, maybe most churches, there’s a regular ebb and flow to attendance and giving. It’s better to set funds aside for an increase that doesn’t occur than to be surprised by an increase yet again this year. Some examples include health insurance premiums, energy rates, and so on. Overestimate your outgoĬhurches need to do our best to anticipate annual increases in costs we can’t control.

This makes it easier to live within our means. We need to set up a budget based on a lower-than-expected income. Set up a budget based on a lower-than-expected income. So what do we do with that as our starting line? But that’s reality in smaller congregations. This very idea is sending shivers of horror through the hearts of every financial planner – especially if you’re used to working in midsize to larger churches. Underestimate your incomeĪs I wrote in a previous post, a small church budget process is less likely to start with a question like “what is our vision and how will our budget reflect that?” than “how much money came in last year?” and “are we on an upward or downward trend going into next year?” Then we set up next year’s budget from that baseline. But every church has annual bills (like insurance) that we have to stop being surprised by.Īny healthy church anticipates these bills and plans for them by laying some money aside every month so it’s there when the bill inevitably arrives.

Set aside money every month for annual bills No matter how big or small the church is.Īs I’ve mentioned in several previous articles, spending money you don’t have isn’t faith, it’s bad stewardship. (This is part of an ongoing series, Money and the Small Church.) 1. With the possibilities for small church budgeting being so flexible, are there guidelines that are universal? I believe so. Not underhandedly, just on a more personal level. No, those pastors aren’t draining the church dry, it’s just that in some situations the church may not have a building or other overhead, so everything that goes through the official budget pays the pastor’s meager salary, while all ministry expenses are done off-book.

There are healthy small churches in which no money goes to staffing costs at all (house churches and bivocational pastors, for instance), and healthy small churches where every dollar in the budget goes to pay the pastor’s salary. While 45 to 55 percent of budget going to staff is healthy for mid-size to larger churches, the range is much wider for small churches. But those percentages mean nothing in most small churches because the smaller the church, the more likely you are to fall into the “every church is different” part that they mentioned. This is good advice, based on years of experience and sound stewardship principles. These ministries may be in a danger zone.” We’ve seen churches that have gone as high as 65 to 70 percent… (but) these higher percentages raise red flags. One of them, from a very good church consulting ministry, acknowledges that while “…every church is different,” their team “…generally encourages churches to try to stay in the range of 45 to 55 percent of total budget. While large churches spend their time balancing percentages, designing requisition sheets, and tracking an increase or decrease of giving as one measurement of the church’s health, small churches deal with an entirely different set of issues.įor instance, I just Googled “what percentage of a church budget should be salary?” and I found several helpful articles. Big churches and small churches design their budgets very differently.

Simple budget percentages