It is that time when leaders are reviewing the current year of ministry and beginning to prepare plans for the next. We’re celebrating key wins and milestones achieved while beginning to look forward to the challenges and opportunities ahead.

For every church, there is one thing that is necessary regardless of attendance, location, or staff: Funding.

It takes money to make a ministry move. Everything the church attempts to accomplish costs money – either directly or indirectly.

In Proverbs 21:5, Solomon shares this great wisdom: “The plans of the diligent lead to profit, as surely as haste leads to poverty.” If you want your church to profit, it is important to craft a plan and diligently follow it. This is why it is vital to create a spending and funding plan.

Here are four keys to preparing a great spending and funding plan.

#1 – Start with the funding plan.

Most churches spend very little time focused on creating a funding plan. The income goal is usually calculated over the course of a brief conversation looking at the past few years of giving, the trends, and then deciding whether or not to boost the number a few percentage points. Leaders rush to develop their spending plan based upon this number without any additional thought as to how the giving will be achieved. After all, the budgeting process (spending plan) usually takes a month or longer to be created, reviewed, and approved.

In their haste to move on to develop the spending plan, church leaders race past an incredible opportunity to consider new and better ways to increase giving. Here are a few suggestions to consider including in your church’s funding plan:

  • Money Messages. When will messages about money be delivered over the next year? Notice the emphasis is on the word “money” and not “giving”. While it is important to teach about giving, it is just as vital to teach about debt, saving, investing, the connection between money and the heart, and relationships and money. Your congregation makes money decisions every single day. Make sure you teach God’s Word as it relates to money to ensure they make God-honoring decisions. RECOMMENDATION: Teach about money three to four times each year.
  • Special Offerings. Will your church have any special offerings in the upcoming year? Be sure to put them into your funding plan so that they are planned and delivered with excellence. If your church has fifteen special offerings each year, consider eliminating some of them or combining them. In the presence of many special offerings, none of them will be special. RECOMMENDATION: Offer one or two special offerings each year.
  • Offering Moments. How will you make the offering moment a true part of your worship service? Giving is one of the most tangible ways we can express our trust in God. Be intentional about this three-minute portion of your service. Many churches use this moment to celebrate key ministry wins and then share this statement, “We were able to do this because of your faithful giving and generosity. Thank you for giving!” RECOMMENDATION: Identify an “owner” of the offering moment who is responsible for planning it just as you plan the worship songs and the message.
  • Digital Giving Options. Many churches receive more than 70-percent of their giving dollars via digital giving: online, app, or text. This is because they know that a significant portion of their congregation no longer carries cash or checkbooks. In response, the church has developed user-friendly methods of digital giving that takes less than 45 seconds. Meanwhile, the vast majority of churches have no digital giving strategy at all. RECOMMENDATION: Test your church’s digital giving solution and verify that you can easily give in 45 seconds or less. Then set a goal for the percentage of giving dollars you want to receive digitally in the next year.

As you develop a strong funding plan, you can have more confidence in the spending plan you prepare. This leads us to our second key: Prioritize margin.

#2 – Prioritize margin.

Many churches seem to take their non-profit tax status literally. They operate their ministry with zero profit – spending every dollar that is given. This is a particularly stressful way to operate a ministry just as it is for any individual who lives paycheck-to-paycheck. This causes undue stress on the ministry staff as well as leads to constant “special offerings” just to keep the church from default on its obligations.

This can be avoided entirely by prioritizing financial margin in the spending plan. In Proverbs 21:20, Solomon shares additional advice: The wise store up choice food and olive oil, but fools gulp theirs down. Choose to be among the wise who store up! Start by planning for three-percent of all income to be saved. Over time, grow this percentage to between eight and ten-percent. This will lead to financial confidence for both the church leadership and congregation because a church with margin can remain focused on its mission.

#3 – Challenge expenses.

Many expenses in our budgets have been there for a long time and have been unchallenged. Items like insurance policies, subscriptions, cleaning services, and goldfish for the children’s ministry have been there forever without determining if there are better solutions or if they are even necessary! Any insurance policy held for longer than two years should be bid out by obtaining at least three new quotes. If there is an existing mortgage, determine if there are better options available that could either lock in a lower rate for the term of the note or reduce the payoff time.

#4 – Manage cash flow.

Every church has a rhythm of giving. Some months are amazing and we feel like people are really supporting the ministry while other months make pastors wonder if anyone was actually there! This makes it important to manage cash flow on a monthly basis. Ideally, a cash flow plan would be prepared for the upcoming year with a column for each month. The income would be adjusted based upon seasonal giving trends and special offerings. The outgo would be modified to reflect special events and outreach efforts. This allows your church to identify potential cash shortfalls and build additional savings in advance.

This cash flow plan has an added benefit in that it can be a living management document throughout the year. As each month is completed, a new month can be added which allows your leadership team to always be looking twelve months ahead. As new initiatives are agreed upon, their associated costs can be added to the plan. This can, of course, prevent the shock of an unexpected cash shortfall. It is also wonderful when the time arrives to prepare the plan for the next year because you have a cash flow plan already prepared for most of the next year!

By creating a great spending and funding plan for your church, you honor the people who have chosen to give. This will lead to happy givers. Who wouldn’t want a church full of those?

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