Wednesday, August 15, 2018
1. What percentage of your operating budget is funded through recurring and predictable sources of income?
Ideally, a church’s ongoing operating expenses should be covered by recurring and predictable sources of income, such as pledges and offerings, program and facility fees, fundraisers, and the percentage of rental income not directed to support your capital budget. If your church relies too much on nonrecurring or unpredictable sources of income, such as large, one-time gifts or bequests, to cover routine, ongoing expenses, it’s cause for concern because that will draw down an endowment at too high a rate.It’s typical for middle-aged and older givers to be more generous to the church. But if the percentage of giving coming from those age 70 or older grows larger each year, it represents a point of vulnerability.
2. How well are you estimating revenue and expenses?
Look at your financial history, going back three to five years. What is the amount of income you budgeted compared to your actual income? What did you budget for expenses, and what did you actually spend? Is there typically a deficit or a surplus? Are you overestimating income? Or underestimating expenses? This exercise will help you gauge the accuracy of your budgeting assumptions.
3. What percentage of your giving comes from pledges?
Not all churches rely on pledging, of course. But if you do, you’ll want to calculate what percentage of your total giving comes from pledges. If you discover, for example, that the amount is typically 80 percent, this gives a basis to estimate your total giving in future years based on the amount pledged. It also can reveal trends. For example, are people continuing to give, even if fewer are pledging?
4. How are people giving?
The high point of check writing came in 1995. Today, only about 50 percent of financial transactions come from cash and checks, and it’s getting lower all the time. Determine what percentage of giving to your church comes from cash and checks and what percentage comes from other means of giving. Are you giving people the options they typically use to conduct their financial transactions? For some, the check they write for church is the only check they write all week.
5. How much of giving comes from persons age 70 or older?
It’s typical for middle-aged and older givers to be more generous to the church. But if the percentage of giving that comes from those age 70 or older grows larger each year, it represents a point of vulnerability. So, it’s important to know this statistic. Even if you don’t know everyone’s exact age, you can make an educated guess.
6. Is any expense category threatening sustainability?
Has one component of your budget become so disproportionate that it jeopardizes the church’s future? You’ll want to examine three things: your debt, which is often a problem for newer churches; your pastoral compensation, which can be overly burdensome for smaller congregations; and your facility costs, particularly if your congregation has older, expansive facilities that no longer fit the size of the congregation.
7. Are you deferring maintenance?
One common way for congregations to balance budgets in challenging times is to defer maintenance. Consider what should ideally be spent each year to fund at least a minimal level of ongoing capital renewal and replacement needs in categories such as safety, accessibility, heating and cooling, roofs, painting, technology upgrades, and renovations. If you are consistently budgeting less than is needed for capital renewal, you are risking greater expense down the road. And even if you can’t fund everything right away, it’s helpful to know the demands for the funds you do have.
8. Is your endowment or permanent fund invested to maintain its value?
There is a tendency to think it’s best for churches to invest endowment funds in such a way that the principal is guaranteed and to spend only the interest. But if you do this, the value of the fund will be declining each year by the rate of inflation. Even if the dollar amount remains the same, you can’t do as much with that amount of money as you could do when it was given. Examine the percentage of stocks and bonds in your fund and get advice on how to balance your investments to allow enough total return growth in the fund (with interest, dividends, and appreciation) to keep up with inflation so you can have a reasonable spending rate for ministry each year (perhaps 4 or 5 percent) while also replacing the cost of inflation. By doing that, you can maintain the purchasing power of the endowment.
9. Do you have a reserve fund, and how is it used?
Some churches are so concerned with preparing for a rainy day that they amass large reserve funds while neglecting current ministry needs. Other churches depend on reserve funds to cover chronic deficits or mask imprecise budgeting. It’s important that a reserve fund is governed by a policy stipulating what money goes into a reserve fund and how a reserve fund is to be used. Churches need to have a goal for their reserve fund such as three or six months of operating expenses. If the fund reaches that level, additional funds may go for other purposes until the reserve fund needs to be replenished.
The Lewis Center video tool kit Protect, Sustain, Grow: Best Practices for Handling Your Church’s Money provides more information on using these questions to review your congregation’s financial sustainability.
Related Resources:
- Protect, Sustain, Grow: Best Practices for Handling Your Church’s MoneyVideo Tool Kit
- Congregational Giving Profile Video Tool Kit
- Building and Funding Your Capital Budget Video Tool Kit
- Monitoring Key Indicators of Congregational Health by Joseph E. Arnold
- Budgets Finances Funding Metrics Stewardship
About Author
Missouri Pastor Jim Hoffman discusses how a five-step process for evaluating and testing possible new initiatives can help churches develop and implement ideas in a more thorough and systematic manner.
Have you wondered why your congregation continues to struggle despite the many proposals for new or improved ministry? Many congregations regularly generate new ideas for new program initiatives, new ways to increase worship attendance, and more streamlined administrative processes. But too often, these ideas never get off the ground.Executing a vision or plan can be a refreshing and invigorating process. It simply takes the right environment and process.
The problem is that a good idea alone cannot solve a problem. It must be put into action. The crisis isn’t a lack of inspired ideas but rather a crisis of execution. Few churches possess the tools needed to execute a simple plan, let alone a five-year vision for the congregation. Figuring out how clergy and laity can work together to more effectively execute ideas can help your congregation take the next step toward fruitfulness. Executing a vision or plan can be refreshing and invigorating. It simply takes the right environment and process.
Begin by gathering the right team. You need people who understand the challenge or opportunity and are willing to invest in it heart and soul. The team should bring a range of expertise and experience relevant to the issue. But, then, what do you do?
I’ve found some intriguing ideas in a book that describes a five-day marathon planning process for businesses, Sprint: How to Solve Big Problems and Test New Ideas in Just 5 Days by Jake Knapp, John Zeratsky, and Braden Kowitz of Google Ventures. Don’t get thrown by the five-day marathon! That’s not realistic for churches. However, the steps the authors outline can be very useful for church innovation.
1. Identify the challenge.
The presenting dilemma or opportunity needs to be defined clearly. What needs addressing? How would you know if you are successful? Or, in the language of biblical fruitfulness, what is the harvest you are seeking from your efforts?
2. Develop options.
Don’t latch onto one idea at the beginning. Sketch out multiple possibilities to accomplish the end result that you have identified.
3. Decide on the best alternative.
Of all the ideas developed, which one has the most potential for success? Which one is most likely to accomplish the goal? This decision requires engaging the alternatives in a deep way to assess the strengths and weaknesses of each.
4. Prototype.
This is where the process is very different from normal church planning. When we decide on the best alternative, we normally recommend it for approval and then begin. In the Sprint method, we are still a long way from implementing anything.
We usually think of prototyping in terms of a new product. “Let’s make one and see how people like it,” someone might say. That’s hard to do with most ministry ideas, but it’s not impossible. What you are looking for at this point is some way to test out your preferred alternative. You may be able to develop a reasonable “prototype” to test, but, in any case, you need to find some way to test the concept beyond just telling people about it.
5. Test.
If you are exploring a second worship service, why not try it for four Sundays during Advent? If you are considering adding a contemporary worship service, why not ask those you see as the target audience to visit contemporary worship services at other churches and share their thoughts? If you are considering a new way of asking for stewardship pledges, why not try it first with the church leadership a couple of months before the normal stewardship commitment season? Even if you cannot try out something, you can arrange conversations with a range of people in your church and with people from other churches who have tried your idea. And, whenever possible, begin something new in such a way that changes can be made if it does not work or needs modifications.
This model requires that you engage with persons for whom the plans are designed and get their feedback and ideas. Their involvement should enable you to execute an idea with a much greater likelihood of success and to avoid wasting precious time, energy, and resources on misguided directions.
The principal reason I am excited about this model is because I believe it has the potential to empower us to see a way through a crisis, especially the crisis of executing God’s vision for all our congregations. In our churches we pray that God reveals an inspired idea that intersects with a known need in each local community. God is seeking after new people and the Holy Spirit is willing to empower new ways for God’s will to be accomplished in this world. It is time for us to get after it and be smart about how we execute God’s inspired ideas. by adapting insights from this book, especially what is written about testing a plan with people who will be using it, your congregation can execute inspired ideas more effectively. The goal is to move from the idea to something concrete that will work effectively. My congregation and I have been helped by using this model’s five-step process.
Related Resources:
Have you wondered why your congregation continues to struggle despite the many proposals for new or improved ministry? Many congregations regularly generate new ideas for new program initiatives, new ways to increase worship attendance, and more streamlined administrative processes. But too often, these ideas never get off the ground.Executing a vision or plan can be a refreshing and invigorating process. It simply takes the right environment and process.
The problem is that a good idea alone cannot solve a problem. It must be put into action. The crisis isn’t a lack of inspired ideas but rather a crisis of execution. Few churches possess the tools needed to execute a simple plan, let alone a five-year vision for the congregation. Figuring out how clergy and laity can work together to more effectively execute ideas can help your congregation take the next step toward fruitfulness. Executing a vision or plan can be refreshing and invigorating. It simply takes the right environment and process.
Begin by gathering the right team. You need people who understand the challenge or opportunity and are willing to invest in it heart and soul. The team should bring a range of expertise and experience relevant to the issue. But, then, what do you do?
I’ve found some intriguing ideas in a book that describes a five-day marathon planning process for businesses, Sprint: How to Solve Big Problems and Test New Ideas in Just 5 Days by Jake Knapp, John Zeratsky, and Braden Kowitz of Google Ventures. Don’t get thrown by the five-day marathon! That’s not realistic for churches. However, the steps the authors outline can be very useful for church innovation.
1. Identify the challenge.
The presenting dilemma or opportunity needs to be defined clearly. What needs addressing? How would you know if you are successful? Or, in the language of biblical fruitfulness, what is the harvest you are seeking from your efforts?
2. Develop options.
Don’t latch onto one idea at the beginning. Sketch out multiple possibilities to accomplish the end result that you have identified.
3. Decide on the best alternative.
Of all the ideas developed, which one has the most potential for success? Which one is most likely to accomplish the goal? This decision requires engaging the alternatives in a deep way to assess the strengths and weaknesses of each.
4. Prototype.
This is where the process is very different from normal church planning. When we decide on the best alternative, we normally recommend it for approval and then begin. In the Sprint method, we are still a long way from implementing anything.
We usually think of prototyping in terms of a new product. “Let’s make one and see how people like it,” someone might say. That’s hard to do with most ministry ideas, but it’s not impossible. What you are looking for at this point is some way to test out your preferred alternative. You may be able to develop a reasonable “prototype” to test, but, in any case, you need to find some way to test the concept beyond just telling people about it.
5. Test.
If you are exploring a second worship service, why not try it for four Sundays during Advent? If you are considering adding a contemporary worship service, why not ask those you see as the target audience to visit contemporary worship services at other churches and share their thoughts? If you are considering a new way of asking for stewardship pledges, why not try it first with the church leadership a couple of months before the normal stewardship commitment season? Even if you cannot try out something, you can arrange conversations with a range of people in your church and with people from other churches who have tried your idea. And, whenever possible, begin something new in such a way that changes can be made if it does not work or needs modifications.
This model requires that you engage with persons for whom the plans are designed and get their feedback and ideas. Their involvement should enable you to execute an idea with a much greater likelihood of success and to avoid wasting precious time, energy, and resources on misguided directions.
The principal reason I am excited about this model is because I believe it has the potential to empower us to see a way through a crisis, especially the crisis of executing God’s vision for all our congregations. In our churches we pray that God reveals an inspired idea that intersects with a known need in each local community. God is seeking after new people and the Holy Spirit is willing to empower new ways for God’s will to be accomplished in this world. It is time for us to get after it and be smart about how we execute God’s inspired ideas. by adapting insights from this book, especially what is written about testing a plan with people who will be using it, your congregation can execute inspired ideas more effectively. The goal is to move from the idea to something concrete that will work effectively. My congregation and I have been helped by using this model’s five-step process.
Related Resources:
- Discovering God’s Future for Your Church Video Tool Kit
- Use Trial Periods for New Ideas by Lovett H. Weems, Jr.
- Learning to Fail Fast by Lovett H. Weems, Jr.
- Change Congregational Revitalization Leadership Planning and Visioning
About Author
Read more now.
The Right Question:
Leaders do not need answers. Leaders must have the right questions.
Psychologist Gary Klein uses the concept of "premortem" to analyze a potential new endeavor. While "postmortems" begin after death, a "premortem" assumes the worst for the new undertaking. People are asked to imagine that it is a year from now and the project was a total fiasco. It failed miserably. Then they discuss this question:
- Why did it fail?
Learn more and watch an introductory video.
Support the Lewis Center
Leading Ideas is made possible by contributions to the Lewis Center for Church Leadership from readers like you. Thank you.
Donate now.
The Lewis Center asked church members in several states to attend nearby churches as visitors and report on their findings. Many reflect the difficultly churches have in viewing things from the perspective of persons new to their church. The challenge is to think of everything from arrival to departure from the perspective of someone who has never been to your church before. This new perspective will shape signage, the bulletin, the work of greeters, and a host of other things.
Signage
Most visitors found directional signage inadequate. Try this exercise. Have some people do a “drive in and walk through” as if they had never been to the church before. Was it easy to find the church? Is the entrance clear? Is there visitor parking? Are there greeters near where people park? Is it obvious what door to enter for worship? Are there directions to the nursery and restrooms? When you add signage, current members will hardly notice, but newcomers will immediately recognize that you are “expecting them.” It is somewhat like turning the front porch lights on when you know guests will be arriving. The guests immediately feel you are anticipating their arrival.
Culture of Hospitality
While visitors were welcomed upon arrival, usually by the official greeters and the pastor, most were not greeted by those sitting around them. Help members see themselves as the “hosts of Christ.” A good host knows that the most important person is the stranger or the one left alone. Until hospitality becomes a part of the congregational ethos, take steps through additional greeters stationed inside the sanctuary to welcome people, especially newcomers, and then to make sure they are greeted when the service is over and invited to a fellowship time or a study group. Another sign of hospitality is providing guest parking. This is another strong signal that you have new people attending and that you are expecting your guests.
The Worship Service
Visitors found some parts of the service confusing. Many did not grow up in church and are unfamiliar with worship practices. If there is a part of the worship that most members know from memory, then still indicate in the bulletin the page number where people can find it or print the text. Guests will appreciate your thoughtfulness. If people are to stand at a particular time, you can indicate that in the bulletin or by a lifted hand by the worship leader. Simple instructions for communion and other parts of the service can help bring on board those who are new. Walk through the entire service as someone coming to church for the first time. Make it easy for new people to participate and to feel at home.
Congregational Participation
“Liturgy” means “the work of the people.” Visitors report a high energy level among most worship leaders but not so much within the congregations themselves. Music and singing may be one way to increase the engagement of everyone. Choirs need to remember that leading and enhancing congregational singing may be their most important function. If attendance is far below your sanctuary’s seating capacity, some portion might be roped off. Paying special attention to times in the service when engagement is highest will give an opportunity to build upon those times. Reducing time gaps and staying on schedule will help hold people’s attention.
Involvement of Younger People
Many visitors were struck by how few younger people were in worship leadership. Brainstorm various ways of involving people across all ages in worship responsibilities. Having younger people visible in worship will not go unnoticed by current members and new people. Be creative in thinking of many ways younger people can be involved. Begin slowly and build. When you seek to involve new leaders in worship, be attentive to the extra time required for training and coordination.
Download a PDF of this page to share with others.Read now and download free.
Quotable Leadership:
It is dangerous to pretend that we know more than we do about how the future will turn out. (Gary Hamel and Jim Scholes)
Learn more now.
Editor: Dr. Ann A. Michel
Copyright © 2004-2018 Lewis Center for Church Leadership of Wesley Theological Seminary
Connect with the Lewis Center:
Lewis Center for Church Leadership
Wesley Theological Seminary
4500 Massachusetts Avenue Northwest
Washington, D.C. 20016, United States
***
No comments:
Post a Comment