An organization working through the budgeting process needs to forget guessing, begin dreaming, and develop a plan.
If you are guessing what your budget should look like that means you have not done your homework.
The budgeting process can seem a little like a guessing game. Yes, you are looking ahead with no assurance that the money you expect and hope to come in actually will. You do not know what your costs for the year will be.
There are some fixed numbers like salaries, but other numbers, such as utility costs that fluctuate based on weather, aren’t as certain. You can get a good idea of what your office supplies will cost based on the previous year, but those costs go up from time to time.
Doing your homework means looking at the realities of the past and the possibilities of the future. The realities are how much you spent on different things over the last few years. You should be able to forecast based on the trends of the past. Developing a budget is not random guessing but a process of looking at various factors to determine the best budget. As for income, look to the past and how current realities might determine if that same amount of income can be expected next year. In a church, if many people are experiencing job loss or are moving away, you may have to anticipate less income as fewer people are able to give. A budget is a thoughtful forecast based on prayerful dreaming and visioning, and connected to a plan of how to move toward the vision. While budgeting always involves a level of uncertainty, you must create a budget based on real information.
Most churches, like other organizations, hope to grow. That means connecting with more people and running more programs. This means greater costs, but hopefully greater giving as well.
It is important for organizations and churches to dream about the future. I believe that we need to build our organizations and our budgets around “God-given” dreams. Ask God what his desires are for you and the people you work with and the people you serve. Are there needs and opportunities God is calling you to step into?
Dreams often cost more than the expected income. This is where the hard work comes in. Find a way to determine if costs need to be cut or your income can be increased. Whether you are a leader in a church or another organization, determine if God wants you to create a budget that will cost more than your forecasted income. We can’t be irresponsible, yet faith plays a part. If you believe God wants you to do certain things and they cost a certain amount, sometimes a budget can look impossible outside of the fact that God can bring in the necessary funds.
A budget is part of your dreaming as you look at how you can meet the costs of the dreams you believe are from God. A budget is an important part of developing your vision as you will need to pay for the costs of moving toward that vision.
Develop A Plan
As you dream of what could happen next year, have a plan so you know where you will be spending money, and an estimate of how much. Your plan is based on your vision and God-given dreams. Your vision and goals should help you project what will be spent over the next year. In our church we also invite leaders of certain programs to submit budget requests based on their vision and goals for their own ministry.
A budget is not just a guess, is needed to achieved your dreams, and can be achieved as you develop a plan around that budget.
- Set Clear Goals and Strategic Steps
Defer to your organization’s mission and goals to inform how money will be spent. Your goals and strategic steps will give you an idea of what your financial costs for the year will be. Build on the data from past years to develop a plan for how your finances will support your organization’s God-given dreams.
- Communicate Your Vision
Communicate your vision and God-given dreams clearly to all stakeholders in your church or organization. Share your dreams with passion and excitement. Help them see how their financial contributions will make a difference in people’s lives. Let them know what they are contributing to.
- Report Regularly
Use a regular reporting structure to let key people know how things are going financially and how that is helping you move toward your goals. Implementing a reporting plan, including what the reports will look like, who will prepare them, and how often they will be shared keeps people informed and prevents surprises when adjustments may have to be made. Updates keep people connected and donors excited about continuing to support the church. When people see the impact of their giving – perhaps through a connection to real people who are being helped – they will be more likely to continue to give.
The results of not reporting on finances regularly can be detrimental to organizations. One church used a congregational meeting to inform the church that finances were very low, and to meet costs, they would be letting a few staff go. The problem was, they had not informed the congregation of the financial situation before they decided on this solution. If they had done so, people may have been willing to increase their giving. If people think there is plenty of money, they may be spending their money elsewhere. Don’t wait until there is a problem before you inform those invested in your church or organization.
If you are determined to honor God in your church and organization, then make sure you talk with God about your dreams and His dreams and then develop clear plans on how to move ahead. Continue to ask God for the wisdom He offers as you handle the finances of your organization with integrity.
Keep looking up,