by David Washburn, BGAV treasurer

‍

As you approach your church’s new budget year, there are some important questions you should be asking to clarify the church’s income and expenses.

‍

How well are you estimating revenue and expenses?

Looking back three to five years, what is the amount of budgeted income compared to your actual income? What is the amount of budgeted expenses to actual expenses? Are you overestimating or underestimating in either area?

‍

‍How are people giving?

According to the Federal Reserve, only 19% of financial transactions come from cash and checks combined! Do you know the percentage of giving that comes from cash and checks and what percentage comes from other means? Is the church providing people with the options they typically use in making financial transactions when they give to the church?

‍

How much of the church’s giving comes from people 60 and over?

It’s typical for middle-aged and older givers to be more generous to the church; but if the percentage of giving by those 60 and older grows larger every year, this could become a point of concern. Even if you don’t know everyone’s exact age, you can make an educated guess, and this is an important statistic to know.  

‍

Are you deferring maintenance?

An easy,  short-term way to balance budgets and hold the line on expenses is to defer maintenance. If you are consistently budgeting less than is needed for capital expenditures, you are literally kicking the can down the road and risking greater expenses later. Think about an ideal amount to be spent each year on ongoing capital needs. Recognize that you can’t fund everything right away, but you can develop a three- to five- year plan to keep costs and maintenance under control.  

‍

Do you have a reserve fund, and how is it used?

Some churches are so concerned with preparing for a rainy day that they build up large reserves and ignore ministry needs. Other churches utilize reserves to cover inaccurate budgeting. It’s important to develop policies about what money goes into a reserve fund and how the reserve fund is to be used. Establish a goal for how much should be maintained in reserve, and once that level is reached, additional funds can and should be used for other needs.  

‍

Asking and answering the right questions will help you develop a budget that fuels the ministry God is calling you to fulfill. I welcome your questions and feedback. You can reach me at david.washburn@bgav.org.  

‍