It’s January and my mind travels back to the time when I was a pastor. Early January found me sitting down with Susan, our church business administrator, to finalize our budget. We had an array of data available to guide our decision making. We knew who had pledged for the new year and had a record of their giving history; whether or not they met, exceeded or failed to meet their yearly pledge. We had information on the giving patterns of those who did not pledge but regularly contributed. We charted our Sunday offerings by the week keeping a five year record as to weekly and monthly income. We did the same with expenses which meant that we knew what bills – denominational dues, utilities, insurance etc. – were due when. After reviewing all the data we created a realistic, usually conservative, budget based on our expected month to month income and expenses. Careful planning alerted us as to when it was time to loosen or tighten our fiscal belt as we lived through the yearly giving cycle.
Last month, the State of Giving 2018 report of the Evangelical Council for Financial Accountability (ECFA) caught me by surprise with data underscoring both the importance as well as the challenge of building a prudent budget. ECFA is a highly respected organization serving the world of evangelical nonprofits including larger evangelical congregations. To qualify for membership and receive the coveted ECRF Seal of Approval congregations must meet seven standards of fiscal accountability and transparency.
What surprised me in the ECFA report? The significant fluctuation as to the cash income many congregations receive from year to year. For example, while congregations with budgets of less than $1 million experienced a modest 1.8% increase in giving from 2016-2017, from 2015-2016 they were blessed with a 10% giving increase. Sadly, those same churches experienced a 5% decrease in giving in the five years from 2012-2017. Meanwhile mega-churches, congregations with budgets ranging from $25 to $50 million, witnessed a 8.8% giving increase from 2016-2017 following a meager 0.6% increase in giving from 2015-2016. Ironically, the good news is that overall giving to congregations increased 8.8% from 2016-2017, the strongest in three years.[1]And I’m reminded of the story of Joseph and his wisdom regarding lean and fat year budgeting.[2]In planning this year’s budget take the long-view and let the giving history of your congregation be your guide.
In a word, what does 2019 portend for you as you finalize your budget? Caution! Socially, politically and economically we are wading into uncharted waters. The wild and nearly daily gyrations of the stock market coupled with the unknown effect of the new tax code on charitable giving counsel prudence. Faith and hope are cherished Christian virtues but budgets based on these virtues alone brings to mind the story Jesus told of a foolish man who built a house on a sand dune.[3]Amidst the social and economic uncertainties of life a budget based on faith and hope usually collapses like a house of cards.
My friend Tim Seiler, currently Rosso Fellow in Philanthropic Fundraising at the Lilly Family School of Philanthropy at Indiana University puts it well: “Failing to plan is planning to fail.”[4]
[1]ECFA State of Giving 2018, December 2018.
[2]Genesis 41.
[3]The Gospel According to Matthew: 7:24-27.
[4]First Day Podcast, Lilly Family School of Philanthropy, December 24, 2018.