Questions for Reflection
- When do you plan your yearly budget?
- Who is part of the bugeting conversation?
- Can you relate to the story coming out of the ECFA report? If so, how?
- What is your mindset as you approach your budget for the year?
Comprehensive data and big trends matter when we seek to make sense of faith-based giving. In this issue of Insights, Bill Enright reflects on the findings of significant data sources. The State of Giving 2018 from the Evangelical Council for Financial Accountability (ECFA) may be the best study pointing to what is occurring in large Christian congregations. The Philanthropy Outlook 2019 & 2020 may be one of the best predictors of the future trends in charitable giving overall. Yet, Dr. Enright makes clear that having the information means nothing without your own proper planning. In our forthcoming NSCEP findings, we examine not only what is received and spent by congregations, but also how it is managed. How do congregations talk about money? Who is involved in these conversations? Is it the pastor, a finance committee, or the entire community? Careful planning and ongoing dialogue about the role of resources in the life of a faith community are vital to make sense of what is happening in our own contexts.
It’s the beginning of the year and my mind travels back to the time when I was a pastor. Early January found me sitting down with Susan, our church business administrator, to finalize our budget. We had an array of data available to guide our decision making. We knew who had pledged for the new year and had a record of their giving history; whether or not they met, exceeded or failed to meet their yearly pledge. We had information on the giving patterns of those who did not pledge but regularly contributed. We charted our Sunday offerings by the week keeping a five year record as to weekly and monthly income. We did the same with expenses which meant that we knew what bills – denominational dues, utilities, insurance etc. – were due when. After reviewing all the data we created a realistic, usually conservative, budget based on our expected month-to-month income and expenses. Careful planning alerted us as to when it was time to loosen or tighten our fiscal belt as we lived through the yearly giving cycle.
Last month, the State of Giving 2018 report of the Evangelical Council for Financial Accountability (ECFA) caught me by surprise with data underscoring both the importance as well as the challenge of building a prudent budget. ECFA is a highly respected organization serving the world of evangelical nonprofits including larger evangelical congregations. To qualify for membership and receive the coveted ECFA Seal of Approval congregations must meet seven standards of fiscal accountability and transparency.
What surprised me in the ECFA report? The significant fluctuation as to the cash income many congregations receive from year to year. For example, while congregations with budgets of less than $1 million experienced a modest 1.8% increase in giving from 2016-2017, from 2015-2016 they were blessed with a 10% giving increase. Sadly, those same churches experienced a 5% decrease in giving in the five years from 2012-2017. Meanwhile mega-churches, congregations with budgets ranging from $25 to $50 million, witnessed an 8.8% giving increase from 2016-2017 following a meager 0.6% increase in giving from 2015-2016. Ironically, the good news is that overall giving to congregations increased 8.8% from 2016-2017, the strongest in three years. And I'm reminded of the story of Joseph and his wisdom regarding lean and fat year budgeting. In planning this year’s budget take the long-view and let the giving history of your congregation be your guide.
In a word, what does 2019 portend for you as you finalize your budget? Caution! Socially, politically and economically we are wading into uncharted waters. The wild and nearly daily gyrations of the stock market coupled with the unknown effect of the new tax code on charitable giving counsel prudence. The Philanthropy Outlook 2019 & 2020 recently painted three potential scenarios in describing the complex environment shaping giving horizon: an Uneven Growth Scenario, a Flat Growth Scenario, an Economic Downturn Scenario.
Faith and hope are cherished Christian virtues but budgets based on these virtues alone brings to mind the story Jesus told of a foolish man who built a house on a sand dune.
Amidst the social and economic uncertainties of life, a budget based on faith and hope usually collapses like a house of cards. My friend Tim Seiler, currently Rosso Fellow in Philanthropic Fundraising at the Lilly Family School of Philanthropy at Indiana University puts it well: “Failing to plan is planning to fail.” A wise owl budget is built to navigate the dynamics of the charitable giving landscape with calmness, if not aplomb.
by Rafia Khader, Program Manager
Do our actions really matter if God is all-powerful? As a person of faith who believes that nothing happens unless God wills it to be, this notion can be stultifying.
And in difficult situations, like creating a budget for your organization, it can lead to inaction.
I have worked at religious non-profits where budgets were either haphazardly created in the last minute to get approval from the board or were never updated after an event to reflect actual costs. As an administrator, I often found myself in situations where I was not sure if I could make a particular decision for an event I was organizing. Was it budgeted? Did we even have a real budget? Because of the lack of accurate budgeting and lofty projections year after year, at one time I even worried that I may lose my job because I was not sure if the organization was even in the position to pay me. This is not something any administrator should be worrying about.
But allow me to go back in time for a bit.
There was a man in 7th century Arabia that was not sure whether he should tie his camel or leave his camel untied and just put his faith in God. He went to the Prophet Muhammad (peace be upon him) and asked him what he should do. The Prophet replied, “Tie her and trust in Allah.”
The camel for most of us in the present day is but a metaphor. Yes, we should have faith in God that He will provide us aplenty. But that alone will not do. God also asks us to do the work that is necessary in order to get the results that we desire, ahead of time. I think the order of the directive is important. Do the work, to the best of your ability, and then leave the rest to God.
The work of budgeting can be frustrating, confusing and make you even feel helpless if you go about this process without careful analysis of your own organization’s past or the current economic climate. But riding into a new fiscal year without a plan at all would be akin to leaving your camel untethered in the midst of a sandstorm.
Budgets tell a story; what story is your budget telling your congregation? One way to expand your story is turning numbers into meaningful words. Our friends at Center for Faith and Giving have excellent resources to help you build a narrative budget.
On April 11, best-selling author and world-wide speaker, Lynne Twist, will join us for our 16th Annual Thomas H. Lake Lecture. The event will take place at Indiana Landmarks with the lecture at 6 pm and an open reception and book signing to follow.