Chris Miller, President of Miller Management, is the host of this week’s episode. He is joined by his colleague, Ashley Hurlbert, the Accounting & Payroll Coordinator at Miller Management and a treasurer at her local church.
September is all about cooler weather, pumpkin everything, and budget planning! Wait, what was that last one? Yep, you heard us correctly, for fiscal year-end clients, fall is the time to start setting those budgets for the upcoming calendar year. Last week talked about aligning your budget to your Mission & Vision, and this week focuses on goal setting within your budget.
For more LATC podcasts devoted to the topic of Budgeting, start here.
Short- vs Long-term Goals
A short-term goal often doesn’t create a lot of strain on the budget – like repainting a room in your church. An intermediate goal may be to expand part of your buidling; which would require saving up for a few years. Whereas a long-term goal could be: we need a bigger buidling! This goal obviously would require the most time and budgeting resources.
Within ministries there could also be goals. For instance, with small groups your three goals could be: start small groups in your church, train more leaders to create more groups, and have enough groups that everyone in the church could attend. Those would each require different amounts of resources and planning.
All goals – no matter their length – should point back towards the church’s mission and vision; and also be SMART goals.
S = specific; tangible and definable
M = measurable; be able to tell if we are getting closer or farther away from the goal
A = attainable; something realistic or within your scope
R = relavent; be in line with the church’s mission & vision
T = time bound; when it starts and when we want to achieve the goal
Preparing for the Budget
In our interview with Ashley, she said in mid-to-late November is when their church’s administrative board (those people who make the financial decisions and approve spending), along with leadership Pastors (admin Pastor & senior Pastor) come together to discuss the past budget, current income, and their wishes for the upcoming year.
Some costs are going to be fixed (salary, utilities, etc.) and some are going to vary the most (different ministries). Generally, the team starts with the projected income, then looks at what they would like to do. Then they see if the math works for that. That’s when discussions come into play on what they want to do first.
This year for their church, their big goals were focused on rebranding and outreach. So more than normal budget dollars went into those endeavors than previous years. But as the leadership group met and discussed where they wanted their church to be in the next year (keeping with their mission & vision) the budgetary decision were made based on those short-term and long-term goals.
Some of the building projects the church wanted to do this year, just weren’t in the budget. But were part of their goals, so they ended up throwing a fund-raiser to help offset their costs to help make that happen.
The years when the goals were very focused and attainable were much more likely to help drive the budget and set the team up for success. Getting down into the weeds of goals in your ministry sometimes can help with the budget process, but there are some that don’t want to be bogged down with those details. Having that backup documentation can help the decision makers have confidence in their approvals for that budget line.
We don’t encourage you to get too micro-managed, where every dollar is accounted for; but also be careful on approving a giant slush-fund because you don’t want too many details. Having some of those goals and objectives – whether they are short, medium, or long-term – can help us manage success. When those goals are written down, at the end of the year we have something to compare to the budget; to see results. Remember those SMART goals from before?
Obstacles to the budget can come from ministry leaders that aren’t sure what they want their budget to be, yet. Maybe they are too new to their area, or the church doesn’t have a good idea of revenue, yet. When your revenue and goals don’t mesh, that can be challenging, our guest says.
What Pastors Need to Know
Pastors need to know that there is a lot that goes into the budget. History can be a good indicator, whether we like that or not. Having the Pastor involved in putting the budget together is helpful for them to see what goes into the decisions. The people that put the budget together do care about the people and the ministries of the church. They aren’t trying to keep things from people either, they are trying to do what is best for the church overall. Like Ashley says: there is almost always a good heart behind every financial decision.
Sometimes there could be tension between the administration and the leadership of the church. The pastor is sometimes more visionary and the board creating the budget is more focused on the actual numbers. But hopefully we use the giftings on both sides to create the budget. We need vision and forward motion, but we have to do it in a sustainable matter.
Now, before the budget is finalized, is a great time to create those goals. For the church overall and for specific ministries. By putting just a few goals down, you may surprise yourself how many you can accomplish in just one year.
Join us next week as we continue our budgeting basics with MM staff, discussing Revenue with Stacey Keenan.
Special thanks to our guest, Ashley Hurlbert, and our masters of all things Podcasting, Chris and Lauren Miller, for this second episode in our Budget Basics series.