When church planting or growing a church, your organization is likely spending every dollar on ministry, stretching to make ends meet. ![]() ![]() Most lenders will require a church to have a reserve fund that will sustain a church during a downturn in the economy. The funds that you set aside are often considered to be a “building fund.” Your church leadership must understand that not only do you need to have cash set aside for capital improvements or purchase, but the church must also have cash set aside for at least six months of reserves for the ministry to run. With that money in the bank, the church would not have missed this opportunity. Had this church set aside the extra $10,000+ per month that a healthy church would have, they would have saved $480,000+ over four years. The result was that the owner was not willing to get into a seller-financed deal. Their facilities bucket was less than 3.5 percent of the budget, and everything else went to staffing and ministries. This church had a strong income of well over $500,000 per year. In the end, the seller could not reconcile the church’s financial position and would not finance the deal. However, the seller reviewed the church finances as a banker would. The owner was willing to offer seller finance. ” I encouraged him to increase his facility expense by paying the church building fund a consistent amount every month over and above the $1,500 they spent for their Sunday rent.įast-forward four years the perfect building, a building this church prayed for, became available. The pastor explained that their mindset was “ every dollar in, every dollar out. During that time, they were able to use a great location for $1,500 per month.Įarly on, I met with this church and explained that the market area was expensive and recommended they save cash for a future lease or a building purchase. Looking at the three buckets above, it is important to point out that you can surpass the suggested percentage in one bucket and make the other two work, but if you go too high in two buckets, then the remaining bucket will suffer. Programming may also include supporting other ministries or church plants that are important to your church. As you reach into the community, events and curriculum for your church will cost money. Programming – This is the ministries you offer.Again, if you can reduce the staffing expense, then you may be able to allocate a little more for your facilities. Many people will use a number closer to 33 percent, but that will tend to put more pressure on your budget. Facilities – A healthy target is 25 percent of your budget.If you can keep staffing low, then you can better invest in the ministry programs and the location you secure. Early on when planting a church, you may intentionally keep this cost low by being bi-vocational, and by using volunteers as opposed to paid staff. ![]()
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