budget
Budgeting is one of the most important administrative functions of the church. Unfortunately, a lot of churches get it wrong.
For most churches the goal to start and end the year with a “balanced” budget. A “balanced” budget is one where money in (income) equals money out (expenses) by the end of the fiscal year. In fact, many churches are not only afraid of having a loss (expenses > income), but churches are equally afraid of having a profit (income > expenses). In Church Finance: The Church Leader’s Guide to Financial Operations, Michael Batts says,
“many churches operate under the belief that there is something improper about generating a positive bottom line - that is, a surplus of revenues over expenses. In fact, in many churches, a desireable budget is a “balanced budget.” While operating a balanced budget may seem like an admirable goal, it simply means that the church expesnts to incur expenses equal to its revenues. The term “balanced budget” sounds attractive because the term has a positive connotation (what’s the alternative - an “imbalanced budget?” That doesn’t sound like a good thing!). But, if the church’s budget is prepared on a bash basis and the church has a “balanced budget,” the church is essentially saying that it plans to spend every nickel of revenue that it brings in, with little or no room for error” (8).
The desire for a balanced budget is driven by the organization’s ‘tax-exempt’ status. As defined by the IRS section 501(c)(3), churches and nonprofit organizations are exempt from taxes (income tax, real-estate tax, sales tax, etc.) because they provide a value to society through their activities.
But here’s the problem: church leaders have misunderstood ‘nonprofit’ and ‘tax-exempt’. The IRS does not say tax-exempt organizations (including churches) need to have a “balanced” budget and cannot make a profit; it simply states that “none of its earnings may inure to any private shareholder or individual.” While balancing the budget may be a good theory, many church leaders focus too much effort trying to balance the budget that they miss opportunities for ministry. As J. Clif Christopher says in Not Your Parents Offering Plate, “[the church is] not in the business to balance budgets or manage money. [The church is] in business to change lives for the sake of the gospel of Jesus Christ” (13).
There’s an important paradigm shift for church leaders: for businesses and other organizations, a budget is merely a plan of how the organization plans to spend its money. For the church, the budget is ministry.
In Budgeting for a Healthy Church, Jamie Dunlop says “budget conversations are ministry conversations” (22). Dunlop notes that, “if church budgeting were simply a matter of stewarding physical resources, a committee of administratively minded church members would be the ideal leadership team….But church budgeting is about faithfulness to God. Rather than delineating between “physical” and “spiritual” areas of administration, the New Testament views spiritual and physical affairs of the church as comprised of one integrated ministry” (37). Dunlop continues, “understanding God’s goal for your church’s budget is found in Jesus’s parable of the talents in Matthew 25.” (23). However, I would take Dunlop’s argument one step further, because the Parable of the Talents (Matthew 25:14-30) is right next to the Parable of the Sheep and the Goats (Matthew 25:31-46).
In describing the Kingdom of God in the Parable of the Talents, Jesus says the Kingdom of God is like a man who entrusts his wealth to his servants before going on a journey. The first two servants “put the money to work” and earned money while the last servant “dug a hole in the ground and hid his master’s money.” When the master returned, he commended the first two servants saying, “well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness” and he rebuked the last servant saying, “You wicked, lazy servant!…whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them. And throw that worthless servant outside, into the darkness, where there will be weeping and gnashing of teeth.’”
This parable is commonly used to emphasize accountability. The lesson is something like, “as church leaders, we are accountable for the budget; therefore, we need to be good stewards of the resources we’ve been given.” While this is true, Dunlop observes how the parable is not about how the talents were used, rather the expectations and faithfulness (or lack thereof) of the servants and how faithfulness requires taking risks (i.e., putting the money to work means investing, which may not always be profitable). Additionally, when viewed with the Parable of the Sheep and the Goats take on a deeper meaning about faith and what it means to be a good steward.
In the Parable of the Sheep and the Goats, Jesus describes the Kingdom of God and says when the Son of Man comes in glory, He will separate the sheep and the goats. The sheep will be rewarded with God’s inheritance as Jesus famously says, “For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in, I needed clothes and you clothed me, I was sick and you looked after me, I was in prison and you came to visit me…Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me’ while the goats are cursed as Jesus says, “For I was hungry and you gave me nothing to eat, I was thirsty and you gave me nothing to drink, I was a stranger and you did not invite me in, I needed clothes and you did not clothe me, I was sick and in prison and you did not look after me… ‘Truly I tell you, whatever you did not do for one of the least of these, you did not do for me.’”
While there is a tendency to view these parables independently, when viewed together, these parables teach one important lesson: ministry is more important than a balanced budget.
Budgeting is about more than allocating resources and “balancing” income and expenses; there is ministry and there are people behind every dollar the church receives and spends. Ultimately, being a good steward and being a good church leader is about serving people not balancing the budget. As church leaders, when we operate out of fear or when we fail to recognize ministry opportunities to which God has called us, we are at risk of being the last servant or the goats. Being a church leader is about recognizing the work God is doing and being in touch with the Holy Spirit enough to know when to “break” the budget.
References
Church Finance: The Church Leader’s Guide to Financial Operations by Michael Batts
