This is part 2 of 2 in a series about church budgeting. Read Part 1, “Budgets Tell a Story”
A mentor once taught me that no one has ever been inspired to give by looking at a line item budget. Yet year after year, I hear of churches passing around the budget so congregants can read every line of projected expenses. And no one—not even the accountants, not even those who put the budget together—bothers to read it.
Most nonprofits know this. That’s why they send me colorful newsletters and e-mail me videos that tell the story of how my gifts are making an impact. Often some numbers will be included—it’s good to have transparency and confidence in responsible stewardship—but those numbers are part of the larger narrative. What’s important is mission and impact, not dollars and cents.
So, how should a budget be presented to the congregation? For me, the best approach has always been to create a narrative budget. Rather than a list of numbers on a page, a narrative budget tells the story of your congregation and how its resources are used to further God’s mission in your community.
How to Create a Narrative Budget
1. Break down the line item budget into 3-5 categories of expenses (it may already be arranged like this).
Suggestions: Building and Maintenance, Administration, Worship, Discipleship and Evangelism, Missions and Outreach.
For pastors and other staff whose roles cover several areas, divide their compensation equally among different categories. For instance, if the pastor is responsible for administration, worship, and discipleship, then assign 1/3 of the pastor’s compensation package to each category.
Some churches like to do the same with building and maintenance, under the rationale that the building supports all the ministries and missions of the congregation.
2. Make a pie chart.
Use Microsoft Excel or another program to show the division of resources into categories. Pie charts are a good visual way to see how much each aspect of ministry takes up in the budget. One year that I did this, several people expressed surprise at how large a percentage worship took up in the budget. “What costs are there, aside from keeping the lights on?” one person asked. It offered a chance to share with them how important the technology costs were, in addition to how much time the pastor, musicians, and other staff spend preparing for worship, so that others could discover Christ on Sunday morning.
3. List 2-3 significant increases and 2-3 significant decreases
This allows you to share what’s changing this year and why the leadership has decided to make those changes. Sometimes it gives cause for celebration, like the time a church I served had to double the Vacation Bible School budget because the number of kids the previous year had wildly exceeded expectations. Other times it reflects uncontrollable realities, such as the rising cost of utilities.
4. Give the bottom line.
Report the annual projected total income from all sources, and the projected total expense. Then list how they are different than the previous year, and which direction are they moving. List amount and percentage. (Ex. “Our total expenses this year project to be about $4,800 more than last year, an increase of 2.4 percent.”)
Here is where you can also share that the full line item budget is available to view, if your congregation’s polity allows it. In 14 years of ministry, I don’t recall more than two or three instances where someone outside of leadership asked to see it, but people tend to appreciate the transparency that comes with just knowing it is publicly available.
5. Tell Stories
In a paragraph or two, tell people what impact the budget is making in the congregation’s mission. Does a community group use your building free of charge, and what benefit comes from that? Did you send more kids to summer camp with scholarships this year? Is your pastor of visitation providing necessary care for the sick and homebound? The more specific and personal, the better. Consider letting a beneficiary of ministry tell their own story.
You could also provide room for those who give to share their stories. Giving to God is a spiritual discipline, and many have stories of how their giving has increased their relationship with God. Let them inspire others as they share how and why they give.
Author: The Rev. Erik Hoeke is a writer at Pittsburgh Theological Seminary and an ordained minister in The United Methodist Church with 14 years of pastoral ministry experience in Southwestern Pennsylvania.