Is margin part of your annual minsitry budget planning? If it’s not, there are some factors to consider when leaving margin out of your planning. In his book, Sticky Teams, Larry Osborne goes into depth on the subject and shares what he’s learned over the years.
In the “Talking about Money” chapter, Larry refers to ministries that scrutinize expenses, but fail to plan where the money comes from as “flying blind”. If this is you, take heart. There are some hard lessons he learned that you can glean from.
“It doesn’t take lots of money to build a great ministry and a healthy team. But it’s hard do either one when margins are so tight that there’s no wiggle room, income projections are based on assumptions rather than facts, and key donors are unknown and unappreciated.” –Larry Osborne
In order to avoid flying blind, here are five of the most significant lessons from Larry that will foster margin when building your ministry budget.
1. Plan on a Savings Account
A savings account is not just good personal and business finance, it’s also good ministry finance. The book of Proverbs puts it this way: “In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.”
“When we fail to build a margin into the budget or lack the discipline to store up some savings, it practically guarantees that we will have some sort of financial crisis every year and a long history of missed opportunities.” –Larry Osborne
According to Larry, there are two main reasons to build a savings into your ministry budget: opportunity and crisis. Planning for margin in your budget will give you the flexibility to move when the Holy Spirit presents a ministry opportunity or when an unexpected crisis occurs.
2. Understand the Facts, Don’t make Assumptions
“Imagine a business planning and forecasting without knowing who its key customers are, what they buy, or how much they spend. Or imagine a missionary who has no idea who her supporters are. Again, the same principles apply for ministry planning.” –Larry Osborne
Understanding the facts about who you are serving, what they are giving, and how they contribute will be a great indicator of how to move forward in the coming year, and keep you from flying blind.
3. View the Next Year with Donors in Mind
Giving patterns change year to year based on people’s lives. While there’s really no way to forecast how people will give, there will be times of flux that you can anticipate.
“When the economy or a personal setback negatively impacts a key donor (or when one moves away), it obviously has a major impact on the budget. Yet churches that fly blind in terms of where their money comes from have no way of knowing this until the budget starts to resemble a sinkhole.” –Larry Osborne
Keeping a pulse on the local economy and the effects it has on the congregation will prevent surprises, and will also inform how your ministry will respond.
4. Know Whose Truly Committed
“A final value of knowing where the money comes from is that it smokes out board members, staff members, and leaders who complain about the ministry without being committed to the ministry.
I can’t tell you how many times I’ve talked to a pastor who, upon receiving full access, discovered that his biggest problem board members or staff members had given zero to the ministry, sometimes for years.” –Larry Osborne
This is a tough pill to swallow, but this is also part of knowing the facts of what’s happening in your ministry. While hearing the concerns of our congregation is important, knowing their true committment level may help you take criticism with a grain of salt.
5. Thank Your Donors
What’s worse than not knowing who your donors are? Not thanking the donors you have. That doesn’t have to mean extravagant gifts or public praise. It does mean that when a ministry acknowledges significant contributions, donors not only see the fruits of their labor at work, they also gain a sense of ownership.
By putting these principles into practice, we’re no longer flying blind. We’ve stopped making decisions based on educated guesses when the facts are readily available. And as a result, we have a more informed board, a better paid staff, grateful donors, and a far healthier congregation. –Larry Osborne
If you’re in need of ideas, there are ways to say thank you in this post.
These lessons were not learned overnight, but over years of growing a church. Hopefully these lessons can help you craft a ministry that is stronger and healthier sooner.
Question: Is there a new lesson you haven’t considered when planning your budget?