As we near the close of Advent on the Christian calendar, Christmas is just around the corner. During this beautiful season of light and hope, we celebrate the Nativity of the Lord and look forward to the possibilities of the new year. For church leaders, it’s also a time of planning and budgeting for their programs which support the community. Ministries both large and small face many of the same quandaries year after year, due to funding uncertainties and rising costs. Read through for some helpful ideas if you are tasked with managing fundraising and budgeting for your church.
Budgeting the Unknown
This most joyful of seasons can be fraught with stress for church leaders and the managers of organizations who count on church funding. Many communities rely on their local church-run food pantry, thrift store, or housing support to help those in need. While many of the costs to run these organizations are known, the sources of funds are not always easily identifiable. In the Christmas season there is an expectation of increased attendance at services, making it a crucial time for fundraising. It’s always important to review budget expenditure carefully. As the old saying goes, “Plan for the worst and hope for the best.”
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Keep in mind that when considering making adjustments in spending, it’s important to keep in mind the long-term effects. Some changes may cost more upfront but have the potential to save a much greater amount over the long term. For example, some older buildings have inefficient HVAC systems that seem expensive to replace, but the savings in power and fuel can make it worthwhile in short order.
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If the church building is owned outright, there may be areas of maintenance where cost can be reduced, though within leased facilities those reductions may not be possible. For example, changing light bulbs to more energy-efficient LED lights may seem trivial - but a small change such as that can add up to impressive savings over time.
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You should regularly review what are considered to be fixed expenses versus variable expenses - there could be hidden savings available simply by changing service providers in some cases. Consider items such as your internet service, phone lines, janitorial, and landscaping costs, to name just a few. Regular bid requests can help keep these bills to a minimum all year long.
Setting Priorities
When budgeting, it’s mandatory to keep the organization’s priorities in mind. For example, if the building used for services is leased rather than owned, or if special additions are needed, leaders might consider setting up a “building” fund. Perhaps the community needs a daycare center or a similar sort of outreach program. Special fundraising efforts can be made, and a targeted amount specified, with the donations collected to be set aside for that particular purpose. It’s recommended to chart the progress of the funding campaign for all to see, both to promote transparency and to continue to encourage further donations that will enable your organization to reach their goal.
Trust, but Always Verify Funds
As stewards of the funds entrusted by the congregation, it’s critical that religious organizations, as much as any other, are careful with the tithes and donations they receive. One of the easiest ways to improve any system responsible for funds is a system of checks and balances in the base organization.
Recordkeeping duties should be kept separate from receiving funds and paying expenses if possible. Keeping accurate records is especially important if parts of the organization apply for federal or local grants for food pantries, childcare centers, etc. These simple practices often encourage the honesty you would expect, particularly when there are audits required, as happens with various government programs.
The specialists at Myrick CPA are available for all areas of budgeting and accounting needs for churches of all sizes. Whether you need an accountant or want professional advice, contact Myrick CPA to make an appointment to discuss the needs of your charitable organization.