Monday, September 24, 2018

Help for Church Budgeting Part 2 - Four Budgeting Buckets You Can't Afford to Overlook


In last week’s blog, we discussed the importance of strategic planning when it comes to church budgeting, and ECFA resources on this topic, including the eBook, 10 Essentials of Church Budgeting, and the upcoming companion webinar by the same name.

To expand on some of the issues and considerations of church budgeting, ECFA’s Michael Martin recently sat down for a podcast with Tim Cool, Chief Solutions Officer of Cool Solutions Group, an organization which works with churches in the areas of facilities management and stewardship of what God has entrusted to us.

After 22 years of working in the church construction industry, Tim became burdened to grasp the concept of “facility stewardship.” Everything we have belongs to God, so what are we doing to steward our facilities? We are going to be held accountable for them, so once the building is built, we need to take care of it.

As Tim has helped churches over the years, he has seen four areas, which he calls the Four Buckets, where money needs to be planned for and then allocated to in order to practice faithful facility stewardship:

  1. Operations -  this includes utility bills, janitorial services, general maintenance, and staffing. The biggest mistake churches make is not planning. As the adage goes, “We don’t plan to fail, we just fail to plan.”

    Another common mistake is when churches don’t look critically at their spending in operational areas. For instance, one church failed to notice that their utility costs were far above the average for a church their size. Once this was noticed, the church realized that they were running their A/C 24 hours a day instead of when it was needed. By making one small adjustment, they were able to save tens of thousands of dollars in operations costs which could then be put into capital reserves.

  2. Deferred Maintenance - this is “all the things that you should have done but you didn’t do already.” In a perfect world, the bucket for deferred maintenance would not exist! The best way to work toward eliminating deferred maintenance is to adequately fund general maintenance and staffing within the operations budget. That way you can keep the building and equipment in good, workable condition until you are ready to replace something, and then it comes out of the capital reserves bucket.

    With the rise in church plants and mergers, Tim sometimes sees scenarios where a church is given a “free building” by another congregation that no longer uses the space, and at first it seems great, but then the church realizes there are millions of dollars in deferred maintenance at stake, and it’s no longer a wise acquisition.

    Tim shares some startling statistics: There are an estimated 350,000+ churches in the U.S., and those churches are believed to account for at least $500 billion in deferred maintenance. This does not send a message of good stewardship to a watching world.

  3. Capital Reserves - Less than 5-6% of churches have adequate capital reserves, and among evangelical churches, the problem is particularly acute. This may be because evangelical churches tend to be very mission-focused, which is a good thing because that is the true call of a church. However, as Tim says, “while a building will never save a soul, we would have a tough time doing church in North America without our buildings.”

    So how much is enough? Tim suggests setting up a program to analyze every component, such as using a free software called Life Cycle Calculator to help calculate costs and timing for replacing facilities and equipment, accounting for inflation. Another rule of thumb: $1-3 per square foot needs to be SAVED annually into a capital reserves fund.

  4. Projects - This includes the exciting things that we like to think of when it comes to facilities - building additions, renovations, etc. Projects are needed for growth, but the other three buckets must be taken into account when considering new projects that will need to be maintained and cared for in the future.

Also be sure to check out Church Facility Management Solutions, a free, online community for those entrusted with facility stewardship. Tim’s eBook, the Four Buckets of Church Facility Budgeting, is available free when you join.

Don’t forget to register for the upcoming ECFA webinar, 10 Essentials of Church Budgeting. The webinar is free for ECFA member churches as well as those who have joined the free ChurchEXCEL community.





Monday, September 17, 2018

Help for Church Budgeting Part 1 - Strategic Planning


A budget is a strategic plan for dispensing available resources to various areas of your ministry. One thing is clear right from the start – there is no single perfect way to do church budgeting.  Yes, nearly all budgets involve electronic spreadsheets or sophisticated software - but budgeting is so much more.

A budget sets priorities for every activity of the church. It reflects your values to ensure that you spend money on the things you believe are most important. It is both a compass and a map to help you achieve the goals of your ministry in a way that is fiscally responsible.

As Richard Vargo and Vonna Laue remark in their Essential Guide to Church Finances, “A good budget process means that 11 acts of war can be eliminated because one annual battle is substituted for 12 monthly skirmishes.”1

Budgeting includes evaluating past spending habits and deciding what you are going to do in the future. You must make decisions and establish priorities for all the possible ministries your church may undertake during the coming year. Every aspect of ministry, from salaries and facilities to the senior and youth programs, must be taken into account.

A budget causes a church to decide whether to fund each ministry fully, partially, or not at all. Staffing costs must be considered within those decisions, since some programs carry significant staffing costs while others may be heavily supported by volunteers.

Lastly, and perhaps most importantly, biblical texts provide insight for mapping out budget categories. Galatians is a particularly helpful New Testament letter for budget managers because it was one of Paul’s first letters written at a time when the early church was making financial decisions (c.48-49 AD). In Galatians, budget managers learn to be sure to care for the poor (Galatians 2:8-10), to minister to the needs of those who teach, which in modern terms means pastors and other church staff (Galatians 6:6), and to work toward programs that bless the congregation as well as the larger community (Galatians 6:10).

For nearly two millennia, these areas have been the basic components of church budgets, but building and administrating these budgets is a complex process.

ECFA’s eBook, 10 Essentials of Church Budgeting aims to assist leaders in today’s churches to budget efficiently and effectively, and in accordance with the biblical model.

Click here to download the eBook. (free for ECFA members and ChurchEXCEL subscribers)

Be sure to watch for next week’s blogpost, which will highlight a recent podcast on the topic of Church Budgeting as well.

Lastly, don’t miss our upcoming companion webinar on this subject, 10 Essentials of Church Budgeting, in which ECFA’s Vonna Laue and John Van Drunen will pull insights from the eBook, and also allow time for Q&A. This webinar is FREE for ECFA-certified churches as well as for ChurchEXCEL subscribers. Register here today!




1Richard J. Vargo and Vonna Laue, Essential Guide to Church Finances (Carol Stream, IL: Christianity Today International, 2009), 11.

Monday, September 10, 2018

Top Legal Risks for Churches Today with The Church Attorney, Erika Cole


Operating with integrity and being aware of risks are necessary elements needed to focus on ministry work. In today’s shifting culture, churches face many risks that were not such pressing concerns in the past. In a recent podcast, Erika Cole, also known asThe Church Attorney, offered a few tips for leaders on changes that churches are facing today. Here are some highlights:

Church litigation is a primary concern. There is a shocking amount of litigation involving churches nowadays. It can affect all churches, but especially those with memberships of over 1,000. This significant shift means that churches must be aware of the rapidly changing legal environment.

Social media is something that is now a part of our daily lives, and many churches use it to reach more people than ever before. However, sometimes things can go awry. Such an important and public platform requires policies, careful management, and consideration of legal concerns.

Church mergers are becoming more common for a variety of reasons.

In the face of all these concerns, how should churches respond? Ms. Cole encourages church leaders to be proactive in prayer and pursue new education on these topics. It is important to be informed and up-to-date on these risks and what actions are being made to mitigate them.

In an environment of increasing risk in various forms, encouraging and challenging one another to operate with integrity is imperative.


For FREE updates, resources, and best practices, visit ChurchEXCEL.org.




Tuesday, September 4, 2018

Fraud Checklist - How to Prevent, Detect, and Correct Fraud in Your Church



We hear about church fraud in the news, but we don’t want to consider it as a possibility in our congregation.

To help churches address the issue of potential fraud, ECFA has developed a checklist which includes basic fraud prevention steps as well as a list of behaviors and actions on the part of a member of the finance team that may serve as warnings of a possible fraud environment. The checklist concludes with practical follow-up steps if fraud is suspected.

While this short summary is not meant to be all-inclusive, it will help you assess your current situation and determine if additional precautions or considerations may be necessary to protect your church.

Remember! Most fraud is committed by a faithful, long-serving volunteer or staff member.

View the Fraud Checklist here.