Your budget shows you limits, and could be an opportunity for grace

February 7, 2011

The pledge letters were sent, and they've reaped what they can. Another stewardship season has come and gone, and in nearly every congregation some combination of finance committees, vestries and parish annual meetings has hammered out an operating budget.

Budgets aren't fun. The frustration is that we often try to fund last year's priorities (or the budget we had 10 years ago, or 30 years ago) with this year's money. Budgets aren't visionary, either. Now, we've got to carry out in the day-to-day operations what we said in our pledge letter we'd do and what we sense God is calling us to be. This isn't easy work.

A good starting point, I think, is the honest one -- let's admit that church operating budgets show the limitations of church operations. And church operations are not the same as Christian ministry. If we approached our finances this way, a lot of things would turn out differently. At St. George's in Valley Lee, Maryland -- the congregation I serve as rector -- things are turning out differently. To position ourselves to be a robust 21st century church, our parish leadership determined that we need to distinguish between institutional operations and Christian ministry.

Operations and ministry are essential, but not the same. Interestingly enough, the congregation's pledge drive and centralized budget speak primarily to the folks who enjoy institutional operations -- the steady presence, the buildings, the personnel. Stewardship sermons don't motivate deeper gratitude from the people who want to see more lives touched in Jesus' Name. (Haven't you noticed that people give more to specific causes? Even your regular pledging members seem to have a good deal more money and energy leftover than that which they put in the offering basket.)

Just look at your congregation's total income from last year, and I'll suspect that the numbers point to their inherent limitations. Approximately 10 percent of St. George's 2010 income came from restricted funds; 20 percent from the church's investment fund; and another 10 percent from fundraisers throughout the year. Put this picture together and something's off -- barely 60 percent of the money we think is required to run the church is raised when we're actually doing ministry in Jesus' Name (pledging, plate giving, ministry offerings) whereas 40 percent is either non-realized cash or earned by doing fundraisers that have, as a significant byproduct, the sheer likelihood of burning out your key lay ministers. This is not a healthy model.

What if the entire equation were changed? What if budgeting and financial analysis was a spiritual discipline, designed to have us determine what God is calling us to do in the year ahead instead of perpetuating the same system, year after year? What if we "freed up" fundraisers and put them in service of ministry? In order to do this, St. George's created several new budget-making principles.

First, we created a very lean centralized operational budget. The funding sources for this budget are reliable and predictable avenues of giving: pledge payments, plate giving and assorted miscellaneous offerings such as memorial gifts. It's easy to get a realistic and conservative estimate of this number based on previous budget cycles.

Second, we focused that trimmed-down budget on the church's baseline operations. It's actually a fun exercise for a congregation's leadership to determine what areas are "essential baseline operations" and which line-items are, in fact, unnecessary, redundant, or can raise their own money, so to speak. One example of the initial success of this budgeting strategy: in 2010, our church's operational budget had more than 180 line items; in 2011, there are 55. The congregation that tries to do and fund every little thing will be the congregation that funds nothing well.

Third, we unleashed fundraisers and let their energy go to doing ministry. If a ministry group or committee wants to raise money, they seek input from the parish leadership, go forward with their event, and spend the proceeds as they said they would. This also puts the fun back in fundraising. I've found that people are willing to give more money and put in more energy if they know that the purpose is not to pay the electric bill. Under our old budget strategy, for instance, we could barely squeak out $3,000 for outreach ministries; now, with this decentralized system in place, our outreach committee has already raised well over $6,000.

Fourth, in order to account for all of this, we established restricted funds on the asset sheet. Those moneys can only be used for their original ministry purpose, and the ministry group who had the passion to raise the money gets to spend it. When the money is gone, the committee or ministry group needs to raise more or, otherwise, dissolve as a group. Nothing is permanent. And because the vestry is the only body that can create and dismantle restricted funds, this builds additional checks and balances. The vestry, then, has parental oversight responsibility, keeping their eyes on the potential of burnout and miscommunication.

Fifth, we worked on effective communication between our vestry, finance committee, committees and ministry groups. This is a decentralized model of the church, and it's hard to go from a very centralized system to its complete opposite. That's why I spend a lot of my time insisting that committees write minutes of their meetings, and that vestry communicates its vision to the ministry groups. The success of this budget strategy now lies in whether relationships in the congregation are built on trust, transparency, and mutual accountability.

Sixth, and finally, we invited the fundraiser group to tithe (give 10 percent) of their net earnings to the centralized operating budget of the congregation. Not only does this cover the necessary overhead costs (lights, heating, cooling) but also instills goodwill between the vestry, which looks at the whole picture of the congregation, and the ministry groups, who are in service to particular desires and hopes.

I'm writing this after more than six months of presenting, refining, reforming and editing this strategy with the parish leadership, and it's only a month into using this new budget tool. It's not perfect, and we don't even know yet where the imperfections are. It'll be revised and reshaped, I'm sure. But that, in itself, is the point -- our entire Episcopal system must become more nimble if we want to breathe life back into this institution I dearly love as well as unleash energy around new desires, new joys, new hurts and hungers that call forth our attention to ministry. Who knows where it'll lead us, but I'm not all that worried. The Body of Christ was never measured on an Excel spreadsheet. And people who take His Body seriously are always willing to begin the journey forward.

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