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, the by the same name., and
To expand on some of the issues and considerations of church budgeting, ECFA’s Michael Martin recently sat down for awith 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:
- 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.
- 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.
- 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.
- 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.
To listen to the.
Also be sure to check out, 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,. The webinar is free for ECFA member churches as well as those who have joined the free ChurchEXCEL community.