What’s the Budget For Anyway? Part Two

Giving Speaks is pleased to present part two of the featured What’s the Budget For Anyway article for congregation leaders by K. Peter Henrickson*

How do we get the Vision Thing?

The annual stewardship drive and the interlaced process of determining what services will be provided starts with asking members to focus on their gratitude for the community relationship they have.  Then they should be asked what they want additionally in that experience.  It leads to a consideration that they can enhance their lives through an expansive selflessness into the collective enterprise of their religious community.  When everyone can do that there is a shared vision.

The process of creating a vision that is more than a year or two away is one of the most difficult tasks facing church leadership — ministers, boards, and committees.  While we might appreciate the notion of having a widely shared vision, none of us know very well how to temporarily set aside the problems facing us now in order to focus on the future.  If one of our committees has a long term plan, we do not know how to support it.  We worry about being dictatorial over the specific proposals that someone doesn’t like; or, we get caught in a never-ending process of seeking complete consensus before committing the congregation to one course or another.  Finally, once committed, we are too easily persuaded to revisit the issue three years later because the congregation is “different now.”  I do not know any easy way to change the entrenched attitudes which tell us to focus on the present.

Nonetheless, I know that whatever vision is adopted by a congregation becomes so only because of the leadership.  Such work is not done unless led by those who are the Board, the committee chairs, the ministers and the stalwarts of the annual stewardship drive.  Vision simply does not happen if the leadership waits for it to arise from the pews.

Here is a process that may help the leadership in your church get started:

  • Ten months before the beginning of the next fiscal year, the board should discuss the context within which they want the budget prepared.  The Board should set forth its own notion of expected growth patterns over the next few years, expected trends in giving, and other matters that could impact on the resources available or the demand for additional services.  The board then communicates these planning parameters to the committees and staff.
  • At least six months prior to the new fiscal year the staff and the heads of the major committees get together for general brainstorming.  Each gets an opportunity (and has a responsibility) to say what changes they hope for over the next five years.  This discussion is an opportunity for synergies to be explored and complementary program operations to be articulated.
  • Ideally, four months prior to the new fiscal year the committee heads and staff get together a second time to share their specific budget ideas, including a three-year program projection.
  • About three months prior to the new year the finance team prepares a “base budget” designed to carry on operations only as we currently know them.  This base budget is usually slightly larger than the current budget by the amount of uncontrollable inflationary adjustments.
  • At the same time, the finance people prepare a listing of all the programmatic ideas they have received and their assessment of related costs.  The board places these incremental additive items into three groupings:  necessary, meaning those items which sustain the ministry and the staff without fundamental changes; important, meaning those items which will advance the ministry and improve the way we are doing things now; and needed improvements, meaning those items which will advance our current ministry in important ways but can be deferred without jeopardy or can be financed through special sources.  A dollar cost is assigned for each item and a dollar cost for each grouping is determined.
  •  These general priority groupings give the leadership and the members a focus for what the current budget drive needs to garner to achieve the program goals.    During the budget drive members can know that, for example:

“Uncontrollable increases will push our budget 1% higher while bringing no change to what we do now.  What we see as necessary additions are going to increase the base budget by about 2%.  Other important improvements to what we do now will cost 5% additional.  And the needed improvements which are the first two big steps on our three-year plan can cost as much as another 3%.  The dollar total on all these is in the range of $25,-$30,000.”

  • After the completion of the budget drive the Finance Committee can make a reasonably accurate assessment of where the current year spending will end and how much will come in during the next year.  Based on these two key pieces of information, it is fairly easy for the Board to determine whether they are focusing their decisions about the next year on the necessary, the important, or the needed improvements list — and to quickly agree to a final budget to put before the congregation.

In a few days we will post Peter’s thoughts on how to present the budget priorities and spending plan so that they are both comprehensive and comprehensible….

*K. Peter Henrickson lives in Vancouver, WA has served the Unitarian Universalist Association (UUA) and its Pacific Northwest District for over 30 years.  Peter served two separate terms as district treasurer for a total of 15 years.  During that period, he began consulting with congregations on general financial management issues.  With the learnings from those consulting jobs, Peter put together several presentations for both district meetings and the Unitarian Universalist Association’s General Assembly.  And the material from those workshops grew into a book, Church Financial Management, which is now available through Amazon.   Peter has served on the Board of Eliot Institute and was Treasurer for a total of about ten years and has served as the UUA’s District Compensation Consultant since 2005.  Peter can be contact directly at:   kphenrickson@gmail.com    (360) 608-8571