ECCU Blog

In between decking the halls and planning your Christmas Eve service, this time of year brings one additional task for many ministries: Finalizing your budget. Here are a few quick tips to simplify your budgeting process—and keep you in the holiday spirit—as you crunch the numbers:

• Get the right people involved. Planning and financial management often divide rather than unite far too many ministries. Use your budgeting process to align your ministry to what is truly mission central. Staff, leadership, and board members should participate in any phase of the budgeting process that affects the line items they are responsible for.
• Remember you’re on the same team. Tug-of-war is all too familiar between those planning the programs and those managing the finances. Program planners and fiscal managers speak different languages, have different priorities, and may not be aware of the importance of the other’s approach to the budget process. Program staff and financial staff should work with the leadership and board to develop budgets which truly reflect organizational priorities and act as a guide for spending and decision making.
• Draw a picture. While it may be clear to executive leaders or the finance staff, your financial structure is often mysterious to other ministry leaders and board members. Creating a visual representation of the financial structure, similar to an organizational chart, provides clarity and understanding for the entire organization. (This is especially true when there are donor-restricted funds which must be accounted for separately.) When preparing this picture, make sure you identify the individual who is responsible for each area. Then you can begin to work with those individuals on the budget for their area. Follow this link to see an example of what this might look like.
• Avoid information overload. Once you have established your organizational financial structure and identified the responsible individuals, you can prepare a budget package for each person involved. This package should be appropriate for their role in the organization. For example, the program director responsible for your children’s program would not need budget information related to the office, at least in most cases. Don’t overload your staff, but give them access to enough information to do a thorough job working through the budget process.

Here’s to keeping your holidays—and your budgeting—happy.

I owe you an explanation.

Remember the recent court case where three former World Vision employees sued the organization for discrimination based on their religious preferences? The case caught the attention of ministries everywhere, and for good reason. The implications are significant.

I posted a couple months back that ECCU was partnering with the Christian Leadership Alliance and Rothgerber, Johnson & Lyons law firm to host a seminar exploring these implications for our ministry members. (See blog posts on September 29 and October 6.)

Sure enough, the event has come and gone—and attendees are still talking about the information gleaned. Hence, my desire to follow up.

Here’s a brief explanation of the most vital takeaways from this event:

• The mixed opinions by the three-judge panel in the World Vision decision make it even more important that religious organizations clarify their religious origins, religious purposes, and religious activities. (See October 6 post for more details on the decisions reached by the three judges involved in this case.)
• Clarifying these issues should involve  all organizational and employment documents, including articles and bylaws, employee handbooks, employment agreements and contracts, job descriptions, and applications, to name a few.
• Churches or religious organizations with any international component should consider the laws that impact international transactions and activities and ensure that they have attended to these requirements before conducting ministries abroad.
• Many states are passing regulations or statutes that have the effect of requiring religious organization employers to provide benefits contrary to their beliefs.  Such laws require employers to be more scrupulous in reviewing their insurance plans, benefits, and strategies so they can manage their ministry consistent with their values.

Do you have any other helpful resources that address this issue? Post a comment and share them with our readers.

I have always been a saver. Even as a child, I tucked away my allowance for a rainy day (making me quite popular when my siblings needed a loan). Recently, though, I read about a family who adopted a baby from China. The Lord laid it on their hearts to adopt, but they did not know where the money would come from. Then it dawned on them that they had a nice cushion of “emergency” funds set aside. What greater emergency is there than saving the life of a child, they reasoned. They stopped saving and started spending—whatever it took to bring that little girl home.

So it is with spending versus saving—and it’s not cut and dry for ministries, either. There is undoubtedly merit to saving. It prepares us for the unexpected and allows us to cover larger expenses when they pop up.

Take, for example, Clayton Valley Church of Concord, CA. “We intentionally set aside money to prepare for major replacement costs,” says Leonard Tilton, treasurer. “We’ve also set up a contingency fund to help cover emergencies.” And it’s paid off. “For a while the church did not have a pastor, but giving remained the same. Rather than spending the surplus, we opted to save it. That money is now getting us by while we are in a season of transition with our new pastor,” says Tilton.

But spending seems to have a place, too. One church in Washington reasons that “God has provided the funding, and He will continue to provide.” As money comes in, it is immediately put toward ministry use. Opportunities are not missed while money is safely sitting in a savings account.

Then there is the rationale that saving allows for spending (like in the example of the adoption). Twin Cities Church in Grass Valley, CA can attest to this. “By investing in savings and unrestricted cash reserves, we are able to give to special projects or needs when we want to give. Constraining ourselves too tight financially would take away those choices,” says accounting director Karen Allen.

Even for savers, there are seasons of spending. For years, Twin Cities built up their cash reserves. In 2010, they opted to use a large portion of those reserves to make improvements to their parking lot. But 2011 will be another year of saving, intentionally rebuilding their reserves.

For Clayton Valley Church, the current economy is the “rainy day” they’ve been saving for. Because of the transition to a growing congregation, they are using all the money that comes in toward immediate ministry needs, plus dipping into their savings. “Giving is growing, but so are expenses. The time is coming when we will need to make significant budget cuts if we want to be intentional about saving again,” says Tilton.

What is your ministry’s approach to spending versus saving? If you’re a saver, what kinds of “rainy days” have tapped into your reserves?