Podcast Episode #423
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Art Rainer joins us to talk about church budgets, budgeting tools, and how churches can free up more money toward missions.
Some highlights from today’s episode include:
- When dealing with personal finances, give generously, save wisely, and live appropriately.
- Envelope3 allows you to know if you’re spending too much on church personnel and operations.
- The #1 question pastors have about church budgets is “What % of our budget should go to personnel costs?”
- Church budgeting doesn’t have to be laborious.
About Envelope3.com:
- Get an immediate analysis of your budget through our custom program
- Receive regular updates on current trends and best practices from industry experts
- Have questions about your budget? Get them answered in our community learning forum
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Feedback
If you have a question you would like answered on the show, fill out the form on the podcast page here at ThomRainer.com. If we use your question, you’ll receive a free copy of Becoming a Welcoming Church.
Pure Awesomeness! I have posted before about the church budget and how a church paid off the building then a few years later took out a new mortgage on it. Spend spend spend! Debt and more debt. Debt is a prison in itself. My late father was very financially savy. He created his own wealth. The funny thing is, only a few people really knew he had wealth. He taught me alot about money. The most beneficial advice was about debt. Do not have credit cards. Pay for everything outright with cash. If you must get a loan such as a house loan, make double payments each month or at least 1.5 times the loan payment. This is a very old school mentallity. You see, my dad was a young child of the great depression. His father was killed and his mother had to raise 4 kids on her own during the depression! Well, she had a house and land where they grew cotton. She worked two jobs and all the kids and her would pick cotton. He lived his whole adult life knowing the depression could come again and prepared. He was financially responsible. Based on his salary, he should never have become that wealthy. He knew how to create wealth, though.
In the church, you have a stewardship committee with people who sign up to serve on this committee who think they know about finances. These may be people who appear wealthy based on their cars, houses, clothes, etc. Yet, if you knew the truth, they are up to their eyeballs in debt in their personal lives. My mom used to tell me, dont worry about how those people act, they are drowning in debt. They buy everything on credit. Yet, these folks on the finance committee only have to signup and get a general approval to control a much larger church budget and spend it right into the red!! Your truly wealthy, financially savy people are oftentimes humble and obscure. But, it is well worth it to scope these folks out and find out who they are. It is not always obvious. Maybe an in depth questionnaire or a look at committee members finances before you allow them to serve. If you can find one financially savy church member who is willing to do interviews of candidates, they could weed them out.
Of course, the church budgeting tool sounds great, may be a great way to go back to having a Treasurer instead of a roomful of people clamoring for what they want instead of what is good and sustainable for the church.
What if debtors’ prison returned?
SBC research:
(1) per cap rate of giving weekly = $32.00 when participants attend both Sunday morning Bible study and AM worship (if attend AM worship only = 50 cents per person per week; LifeWay has more recent per cap info via ACP reports);
(2) preaching about biblical growth of the congregation particularly via its small group Bible studies (call its Sunday School, LIFE Groups, whatever; it is not what a church calls its small group Bible study that matters–it is what that church DOES with its small group Bible study that matters)–not tithing exclusively/primarily–can help solve money/budget issues so that they stay solved (Christians have a tithe pocket inside their donation pocket, and only their churches receive what is in the tithe pocket; inspired people will give–just provide something truly meaningful to support financially);
(3) if each existing small group sustained increasing its attendance only by one new person annually and the averages held over time (research: the averages hold over time), then a congregation with only 10 Bible study groups would realize an increase of almost $100,000 in annual general fund receipts by Year 5 of such a strategy–but also have gained almost that much during the 5 years (this is without starting any additional small groups; more groups >>> greater revenue–do the math for your congregation);
(4) the sustained growth of a church’s small group Bible study ministry is the end of all future loans/debt/mortgages (instead, the congregation will have a great-great deal of money remaining after all new/additional expenses are paid [e.g., staff wages–will need more, get used to the idea; CP contributions; Bible study materials; etc.] that it WILL NOT KNOW WHAT TO DO WITH [sounds weird, doesn’t it!]);
(5) annual budgets only are spending plans for churches’ growth-related strategies; prayerfully develop a community-reaching years-long strategy like God deserves and Christians should, calculate its total cost (i.e., “budget”), communicate the info to the congregation and challenge people to give in support of it, trust God for it all, then work the years-long strategy. Monitor, adjust, repeat annually. (To whom should God provide all kinds of resources: those congregations prayerfully on mission with Him reaching their communities, or those not?)
The senior pastor of the largest congregation I have served led that church to overbuild a new auditorium–in a rapidly-growing bedroom community of a rapidly-rapidly-growing city–by about 800 seats (at a cost of $3000+ per seat = $2.5+ million) as it turns out more than 15 years later; during this time with no true community-reaching strategy/ministry structure in place, AM worship and Bible study attendance has declined and then plateaued by 100+ participants weekly–but additional mortgages have been secured ($4 million currently). 2018 is the third consecutive decade the members of that church have been asked both to tithe and to contribute above-and-beyond to debt servicing. But, if the congregation had sustained the rate of its growth in these years, it could have paid with cash for the construction done and still had $4 million remaining.
It is said about churches and other organizations, “No debt = no dream.” Again, for churches a small group Bible study ministry sustaining the rate of its growth annually is the end of debt BUT the accomplishment of dreams.
Excellent post! Wholeheartedly agree! That large church you spoke of is model of the local church on a grander scale. One point I want to add is the budget and debt crisis going on in the church is a direct reflection of the debt the congregants have in their personal finances. United States economy is in an unsustainable debt crisis. 2017 the average american household debt is 134000. 50% of americans live paycheck to paycheck. The gov’t borrows from China! My dad was right. We WILL have another depression. America is NOT a wealthy nation. Americans just spend like we are. Sorry, ranting 🙁
This is the flaw of depending on the tithe to sustain bloated budgets. The solution may not be agreeable to the sbc. The fact is that the majority of the budget goes to the building. The question I pose, “Do we really believe that using/wasting all this money on an object while neglecting the commanded ministry of Jesus to spread the gospel, feed the poor, help the orphans and widows, visit the sick and those in prison, and love our community is God’s idea of good stewardship?” All these resources are being used for ourselves, our comfort, our egos, our ‘feeling’ that we are actually following God.
The solution is the opposite. The vast majority of resources should be going directly to those in need of a REAL LIVE witness to Jesus by BEING JESUS to the world! The truth is that worldly things and buildings do not lead people to Jesus. What leads people to Jesus IS JESUS!!
God is judging the american church now for idol worship.
Churches, tighten your belts and take the money you have and pay off your debts including the building! Then, create a new budget. Congregants, downgrade your car, house, and anything you can to consolidate and pay off your debts. When the bottom of the economy falls out, for most people, it will be a very long fall to the bottom.
What matters is not what other people think but what Jesus thinks. Jesus said, “Follow Me!” Are we as the body of Christ really following Jesus? Time to get back to the basics.
* every church should have a budgeting and finance class
Daughter-Really, on point and on target here. For church leadership to continually ask congregants to give- give- give- to an already bloated “budget” where the end result does more to enhance the “comfort and well being” of the congregation (99%) and 1% percent actually doing KIngdom work. As we say in my neck of the woods-thanks for
“making it plain.”
Hi everyone,
The question about the correct percentage for personnel costs is a very interesting/difficult one.
I had a talk with a local Pastor from Massachusetts a few days ago and it sounded like in his experiences the local churches were unable to pay their lead pastors enough to support their families.
It sounded like in most situations the lead pastors spouse had to have a job that could support the family and the pastors salary was basically supplemental only.
It makes me think we need to think carefully about what we expect from our lead pastors.
Are they supposed to be able to support a small family on the pastor’s income alone?
Best,
Gary
Southern NH (USA)