*** DEBUG START ***
*** DEBUG END ***

Why does a church need a budget?

20 December 2013

We have such a minimal amount of income at our church, why do we need to write up a budget?

EVEN if a church is so on its uppers that it decides to spend nothing, the PCC will still have diocesan quota, insurances, repairs, and any utilities as its responsibilities. And there are churches where as much as 90 per cent of income seems to become swallowed by such necessities.

A budget allows you to prioritise and plan your spending. Types of spending by the church may be broken down into "Essential", "Important", and "Desirable".

Under "Essential" you could put insurance, maintenance, and utilities. Maintenance can be a small budget if you keep up to date, but items ignored can become monsters later. Utilities must be paid, as you have normally used the supplies by the time the bill comes, although you could break the expected costs into monthly allowances rather than face a large winter-quarter liability.

Your diocesan quota is on the border between "Essential" and "Important"; in a short-term crisis, you may be able to negotiate change. In the long term, if we want trained clergy, we will have to face this realistically.

Fire and security alarms and other such items may be "Important", as are any contracts on boilers and lifts. Anything under "Desirable" could, in hard times, be left out without a disaster happening. Candles, flowers, and service sheets are examples.

But the budget that lays out all these items over the year can help you to ensure that you do not spend all your cash when it comes in, when in fact you will need to accumulate cash to pay the annual insurance, or the quarterly electricity bill. Cash in the bank is not an accurate guide to your funds, as you will have already committed income towards future expenditure.

Having a budget helps you to assess your spending to ensure that it is in line with your values as a church rather than a recurrent demand that you fear.

Many people who avoid budgets do so because they feel that they cannot predict income. In that case, the church should not undertake any activity for which payment comes after the event. Power is an example: if you want to spend hand-to-mouth as income comes in, then having a pay-as-you-go meter would be logical, but utterly impractical. It is better to use the pattern of the previous year's income as a model for how money will be received next year, and make plans accordingly.

If predicted income cannot meet predicted costs, then you have nearly a year to deal with the issue. A really good stewardship programme, such as "The Responsibility Is Ours", in Southwark, can help members become more realistic, consistent, and predictable in their giving. My own, inner-city church chose to go from one jumble sale each year to ten, and went into the black on the budget, and later in the treasurer's report. Some enjoyable summer event fund-raising can lift spirits as well as the bank balance.

But, ultimately, we have to have a diocesan-wide and nationwide conversation and financial planning, as there must be more models of financial planning which will enable more churches to plan annual budgets that have some surplus of income over expenditure rather than the opposite.

Send issues and questions to maggie-durran@virginmedia.com.

Letters to the editor

Letters for publication should be sent to letters@churchtimes.co.uk.

Letters should be exclusive to the Church Times, and include a full postal address. Your name and address will appear alongside your letter.

The Church Times Podcast

Interviews and news analysis from the Church Times team. Listen to this week’s episode online

Welcome to the Church Times

​To explore the Church Times website fully, please sign in or subscribe.

Non-subscribers can read four articles for free each month. (You will need to register.)