Budget
•Download as PPT, PDF•
2 likes•2,083 views
This presentation, with notes at the bottom, is a tool for churches and other not for profit organizations to learn how to budget wisely.
![“ IF BUDGETING AT ANY LEVEL MYSTIFIES AND FRUSTRATES YOU, YOU’RE IN GOOD COMPANY.” ,[object Object],[object Object],[object Object]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Budget
Similar to Budget (20)
Budget
- 1. FINANCIAL RESOURCE: BUDGET C. Nicholas Morris
- 16. Collins, J. (2001). Good to great . New York: HaperCollins Publishers Inc. Crown Financial Ministries (2008). Determining and funding the church budget . Retrieved July 24, 2009 from, http://www.crown.org Fooshee, G. Ten financial principles that are biblical. Retrieved July 23, 2009 from, http:// www.backtothebible.org Hargrave, V. (2007, June 12). Reflecting ministry through stewardship. Church Business Administration Certification Seminar. Giving in Grace. Annual review and the annual budget. Retrieved July 19, 2009 from, http://www.givingingrace.org RESOURCES
- 17. Powers, B.P. (2008). Church administration handbook (3 rd ed.). Nashville: B&H Publishing Group. Ramsey, D. (2003). Financial peace revisited. New York: Penguin Group. Ramsey, D. (1999). More than enough: The ten keys to changing your financial destiny. New York: Penguin Group. Thomsett, M.C. (2002). The little black book of project management (2 nd ed.). New York: American Management Association. Trinity Hills Baptist Church. Church budget process: Involving the entire church in decision-making. Benbrook: Baptist General Convention of Texas Retrieved July 19, 2009 from, http://www.bgct.org/texaspaptists Welch, R.H. (2005). Church administration: Creating efficiency for effective ministry . Nashville: Broadman & Holman Publishers.
Editor's Notes
- The budgeting process can be a daunting and overwhelming task for any church administrative team or finance committee. There are many challenges to developing and maintaining an effective and balanced budget.
- Many facets should be taken into consideration to fully understand the complexity of a church budget. One must understand the nature of a church budget, the biblical principles, the common types of budgets, how to prepare, and prioritize a budget to appreciate and utilize an effective budget for an organization or the local church.
- A church budget must be rooted in a strong foundation of biblical principles. Although there are constant debates whether the church is a business or if the church should be managed as a business, one argument is certain: the church should be managed with moral, ethical, and Christian principles that call its leaders to a high level of accountability.
- A church administrative team or financial committee can decide to manage their budget in a variety of ways. Three types of budgeting are commonly recognized and practiced: zero based budgeting, line item budgeting, and ministry action or ministry based budgeting.
- Zero-based budgeting is when a church or organization chooses to begin all budget allocations at zero each budget year. The funds that are budgeted, but not spent are either recouped or lost. The zero-based budget system requires those overseeing the budget to annually review their resource needs. This is one advantage to using this type of budget system. On the contrary, this type of budget system requires an immense amount of time and personnel resources, which can be seen as a significant disadvantage. When utilizing the line item budgeting format, items are continually used each year once the appropriation is initially justified. One of the great advantages to this type of budgeting is that once an expenditure is justified, in most cases, only minor modifications need to be made year-to-year. However, this can also be a weakness because review and evaluation of the line item needs to be maintained and some churches fail to do so appropriately. Another down side to line item budgeting is administrators have the tendency to treat the budget as a whole and not as individual programs or ministries
- It utilizes the positive features of zero based and line item budgeting, while at the same time reducing or eliminating their negative attributes. This system requires each budget unit to evaluate their program and ministry expenditures annually and either sustain, modify, or eliminate the activity. This allows some recurring budget items, such as debt, utilities, salary, and insurance to be carried into the new budget without serious review. The ministry leadership is called to establish a priority for budget items based on the mission or purpose of the church. The significant advantage of ministry action budgeting is that major ministries of the church are usually fully funded for success. Thus, when it is time to make adjustment for budget shortfalls, line items that take less priority are reduced first and sometime eliminated.
- Powers suggests using an eight-step process for the ministry action budget to function properly: analyze ministries, propose ministry actions, evaluate ministry actions, prepare the budget, present the budget to the congregation, promote the budget, report on ministry progress, and finally, review and evaluate the budget. Analyzing and understanding the different types of budgets churches use is beneficial to the process of preparing the budget of a local church.
- A group of church leaders must be organized as a budget committee to orchestrate the development of the budget. Typically, this can be the Church Council or other body of leadership. Most important is the leadership of the church is integrally involved in the process. Depending on the size of a church, those involved in the budget process can include lay leaders, ministry directors, pastors, deacons, finance team, and the board of directors. When it is time to prepare a budget, several pre-budget factors must be taken into consideration.
- Looking at the budget from an aerial view will help leaders see the big picture and allow them to prioritize according to ministry needs or dreams. Prioritizing a budget is based on the organizational or church mission, purpose, or desires. There are three main category budget requests that exist: ongoing budget items, ministry action items, and ministry challenge items. Ongoing budget items require funding regardless of the total budget or economic climate. These items include utilities, salary, benefits, and loan payments. Ministry action describes the resource need for the many ministries and programs of the church or organization.