Budget Module Part 2

Questions for Individual Reflection/Group Discussion: (20-30 minutes)

What is the budget process in your congregation like? Who puts it together, what input do they solicit? Who do they share it with?

Budgets fulfill practical needs and considerations; questions to consider are how to improve your church’s budgeting process. Also, Jim Elrod suggests answering these five questions, in the affirmative!

• Is the budget calendar clear to all stakeholders?
• Have all stakeholders been provided with opportunities to provide input?
• Have prior years budgeted vs. actual results been factored into the projections?
• Has the proposed budget been stress tested against possible adverse events?
• Does the proposed budget achieve financial equilibrium and advance the mission?
• How do these questions resonate in your setting? Who are the critical people in your setting to be engaging these questions with?

Questions for Individual Reflection/Group Discussion: (10-15 minutes)

Jim Elrod says that financial equilibrium is not the same as financial sustainability and is the primary reason that 91% of churches use a budget. Budgets also have what is called great “marginal utility” giving the church leadership many ways to use the budget to help make decisions and manage programs throughout the year.

• What has been your exposure to the use of your church’s budget, if it has one? In your experience, how have conversations about the budget helped or hindered your church to fulfill its mission?

Questions for Individual Reflection/Group Discussion: (5-10 minutes)

Incremental budgeting, which is a budgeting method most churches use, does not take into account missional goals, since it builds on the de facto costs and income from previous years. Newer missional goals have to be grafted onto the conversation of incremental budgeting, and if not done carefully a gap can grow between the church’s budget and its mission.

• Are you aware of gaps between your congregation’s missional goals and the existing budget? Who can you talk with in your congregation’s leadership about the gap you see?

 Questions for Individual Reflection/Group Discussion: (15-20 minutes)

Improving the budgeting process can be done by: linking budget conversations to mission, starting sooner, creating opportunities for input from more stakeholders, using your financial experts appropriately, and helping to archive success stories.

• As you reflect on these areas, what are some ideas that you can move forward with to improve the budgeting process in your congregation?
• Understanding that success stories need to be shared, where and how would you report “financial fun facts” that leaders may hear about but which do not get widely communicated to the congregation?

Questions for Individual Reflection/Group Discussion: (10-15 minutes)

“Your budget is the first day of your strategic plan…”

• As you reflect on your church’s budget, which line items do you see aligning with your church’s strategic plan? What are the areas that you have questions about? Who are strategic people in your congregation you can talk to about your observations?

Alban Institute at Duke Divinity School – Money and Finance 

Alban Institute at Duke Divinity School – Management