Making a Combined Ministry Budget and Budget Shortfalls

Yesterday, I received a very legitimate question that is worth spending a few minutes answering. The question was, “What happens if BBC or BBA doesn’t make budget?”

First, let me define what we mean by budget. Budget is what we have projected to bring in as income and what we are projecting to spend. When we say we are not meeting budget, we mean that we are not receiving all that we projected, but we only spend based on what is brought in.

Now, let’s discuss how BBC determines its budget. The 2008 budget of $1.4 million for projected church income was determined by examining the giving for the last six months of 2007. Based on the assumption that church members were giving on a monthly basis, a six month glide path of continued giving made the 1.4 budget very attainable. We had no idea, and quite frankly were shocked, that in the opening month of 2008 members would withhold tithes and offering to the tune of $50,000. This was quite a surprise and we had to immediately make substantial adjustments in our spending. With giving that averaged around $125,000 a month for the last six months of 2007, a reduction of $50,000 is about 40 percent of one month. It indicates that 2 out of 5 of our faithful givers either gave nothing or substantially reduced their normal tithe in January. February was also lower than normal. No one knows why this happened because the giving did bounce back to its proper amount by March, but this reduction has made it hard to catch up.

My family, has been tithing for the past 20+ years with a consistent month to month income. The idea of skipping months or not giving to catch up on bills or take a vacation has never been an option. According to Malachi 3, the tithe is the Lord’s. I don’t ever want to be guilty of robbing the Lord. I believe that God blesses people’s lives according to their faithfulness to His plan of economy, and the tithe is the debt I owe.

Giving financially is one of the clearest and most distinct acts of worship that I can do to show my love for God.

Now with regard to the Academy’s projected income budget: it is based on projected student attendance. We have done the analysis to determine that XXX number of students bring in approximately $Y,YYY amount of revenue in the form of tuition, fees, and other costs. We then estimate the growth we expect to experience and budget accordingly.

Second, let’s discuss “What happens if BBC or BBA doesn’t make budget?” The answer depends upon how much of a budget shortfall either experiences. The collective budget of the entire ministry reflects a certain amount of money for visionary projects and desires for growth. Let me explain what I mean by that.

Our budget was built in such a way that if both BBC and BBA met the 2008 projected income, we would be able to make some significant improvements to the campus. For example, in the Academy I have expressed a belief that there is a strong need to equip all the rooms with projectors connected to the teacher’s computers so that PowerPoint and other audio visual presentations can be shown to the entire class. The administration believes this project is very important and will significantly enhance each teacher’s ability to effectively communicate knowledge and thus improve the learning of the students. Other ideas include a media center full of books and a weight room full of a lot of different apparatus to aid in strength training. We also have a desire to equip the building with wireless Internet so that students can bring in laptops and do research during their study halls from any classroom in the high school. Obviously all of these initiatives cost money, and if we were to make budget in the Academy we would be able to move forward on some of these projects. If we miss budget by a small amount, then we aren’t able to do all the projects.

On the church side of the campus, we also have special projects that will have to be delayed until we meet or exceed budget. These projects include:

• Finishing the choir room renovation with foldable desk chairs and flat screens for the choir to read the words of the songs they are practicing and teachers to use PowerPoint. This multipurpose room will also be a great place for lecture type instruction for classes as large as forty-five students.
• Replacing the main HVAC unit for the auditorium. This is a very important need as it is getting nearly unbearable on about 8 Summer Sunday evening services.
• Renovating the bathrooms in the preschool and office wings of the church. These bathrooms have never been remodeled since they were originally built well over 25 years ago.
• Replacing the carpet in the auditorium and redesigning the platform.
• Equipping the auditorium with a new sound system to increase our ability to clearly hear the choir and speakers.

In both the school and church aspects of the ministry, we are meeting projected income sufficient to pay our bills, support our missionaries, give to special missionary projects, give to benevolence needs of people in and outside the congregation, execute special ministry events, and maintain the cleanliness, functionality, and appearance of the campus. To some degree, we are continuing to make campus improvements such as the painting of several rooms, some new carpet, and the initial choir room renovation.

Our practice has always been not to spend what we don’t have. If the income is down, then we automatically reduce spending. Just because we established a budget of $1.4 million does not mean that we spend $1.4 if we are only on track to receive $1.3. We reduce our spending so that we only expense what has come in. We are exceptionally mindful when we don’t make projected giving and income, and we are committed to staying within budget as much as possible. In some areas, it is exceptionally difficult. For example, when an HVAC unit goes down it must be replaced. Our rooms are not designed to be able to use an alternative cooling method. In my house, I could open a sufficient number of windows to get a cross breeze and use ceiling fans to make it for a few weeks, but in the church and school this isn’t the case. Sometimes a freezer or a computer server will go down. These are pieces of equipment that are critical to the ministry. We depend upon our computers to pay bills, record tithe and offerings, research, and communicate. Today our computers are just as important as the phone system. In these situations, we may exceed the budget in a particular line item, but we are committed to keeping within the total budget as close as possible and to not spend any monies that we do not have on hand. To the glory of God, we have not had to access our sinking fund or strategic reserve account and are committed to preserving the value of these accounts as good stewards of what God has provided through faithful Christians.

Finally, we want to be transparent about the finances of this ministry. If at any time you have a question about the way the finances are being handled, please don’t hesitate to ask.

1 comment:

  1. Russell Earl Kelly, PHDOctober 22, 2008 at 6:23 PM

    Also according to Malachi 3 you will not get behind in your bills becasue you are receiving overflowingd blessings. Therefore tithing does not work. In order to claim to blessings from tithing you must observe all 613 commandments of the law per Galatisns 3:10/Deuteronomy 27:26.

    NT giving is freewill, sacrificial, generous, joyful, not by commandment or percentage and motivated by love for God and man.

    Many can and should give more than 10% per 2nd Cor 8:12-15 but that does not mean that a curse is on those who cannot per 1 Tim 5:8.

    Russell Earl Kelly, PHD