Churches are usually associated with charitable works and not supposed to be gaining profits like a business. The church is a spiritual place of worship, but it is also an organization at the end of the day. One that needs funds for the services provided and, at the same time, gives a fixed salary to the employees in the church. This is why a church budget is necessary to deal with this concern.
A church budget is an estimation of expenses over some time regarding the clergy’s needs and spendings. The church uses it to manage the money they have acquired through donations by the faithful and funds issued to them. Preparing a monthly church budget helps in allocating standard costs towards the payouts and helps decide whether to spend a certain amount for a particular project or activity.
As of 2019, around 23% of Americans attend church every week in comparison to others who attend frequently or never, according to a recent study by Statista. Whether your church is full of active parishioners or not, it is still essential to have a church budget prepared. That way, you can all be financially efficient with the funds you have.
To account for all of your spendings, one way to make an effective church budget is to separate them based on categories. Some examples you can put as categories can be for salaries, facilities, income, and offerings. This will help you remember what to focus your budget on and make sure you are spending your funds the right way.
Whether for a proposed activity, a meeting, or a ceremonial presentation, it is crucial to allocate your church’s funds for each of them. That is another way you can make use of your church budget. You can use a checklist format to take note of this so that it is all written down in an organized way.
Just like financial statements and reports, you need to write and create your church budget to make everyone understand its allocation. Use the proper terms and use a format that will help anyone from the church know where the money is going. You may even use an infographic to help illustrate the budget if you want to.
To make an accurate church budget, take the time to look into the numbers when you are writing down the allocated funds. Look through every list and see if you get the numbers right. Sometimes you might get a digit wrong or put the wrong amount of money in the wrong section. This could result in problems that you could avoid in the first place. That is why it is crucial to double-check the numbers.
Like all organizations, a church also requires a budget to help manage their day-to-day needs and meet its annual obligations.
Despite being a nonprofit organization, generally speaking, a church makes its income by various donations. It either comes from parishioners or charity organizations. This enables them to meet their day-to-day needs like food and other necessities.
While a pastor has the right to sign checks regarding the church’s account, a whole finance committee is in charge of handling the church’s budget. That way, it can be efficiently monitored. They have their accounting department this way.
Without a church budget, this creates a chaotic situation resulting in the deficiency of funds due to inefficient spending on basic requirements. Hence it has become mandatory to formulate a church budget. If you are a part of a church, make sure that the place can spend its money the right way, using it to guide and help people, which is their main purpose.