While the main focus of Church Financing Center.com is to assist churches looking to build or make improvements to their facilities, I thought it would be a good idea to post some information that pertains to the general, daily finances of the church. It’s important for a church to understand these basic aspects and to develop a solid financial foundation to accommodate regular day to day activities before attempting to finance a new project.
Check out all of the tips and facts below from an article by the North Indiana Conference of the United Methodist Church:
- Typical churches require a budget 1,000 times their average weekly worship attendance in order to fully fund their ministries. Or, their weekly gifts are at least $20 times the average weekly worship attendance.
- Total compensation for staff may be 50-60% of a small church’s total budget but 40-45% in a larger church.
- Between 5 and 10% of the total budget should be spent on outreach and evangelism.
- No more than 20-25% of a church’s total expenditures should be for debt retirement.
- It’s not wise to give more than 35% of your budget to missions; it will begin to limit your future ministry and growth.
- It’s best to raise 50% of funds needed for building projects before beginning construction (25% if land is already paid for).
- Having an offering drop box in a church’s lobby can increase donations.
- Sometimes the cost for a special part of the vision, such as hiring an additional staff person, can be seen as a mission outreach and thus, at least for a few years, be funded out of the church’s mission budget. Or in the case of a building expansion, the funds could come through a capital campaign.
- Expect additional program staff’s salaries to be paid through new giving units within 6-18 months.
- A church usually will raise far more money in a capital campaign if it uses a professional fund raising company.
- A church’s pledge drive should always come before the budget is formulated