Posted in Executive Pastor

Why You Should Waste Church Resources

©ImagePixel/ Dollar Photo Club

It’s hard to walk away from something that’s taken a significant investment of time and resources. But I’m learning in my position as executive pastor (and it’s likely applicable for other ministry leadership positions), the investment of time into things that never see the light of day is actually me doing my job effectively.

I assume all leaders are frustrated by sunk costs. But, as ministry leaders, should we not embrace them? Or at least embrace the process which often leads to them?

Last year, I was significantly involved in two minister searches for our church. Each process took more than four months. It included countless calls, flying to their homes, and flying them to our church. I’d count up the hours I spent in this process, but it might make me nauseous. When we got down to the last stage of selection, it was determined the match wasn’t best. All the work invested tempted me to pull the trigger anyway… “I can’t walk away from this, I have too much invested.” But we knew something wasn’t right. We didn’t feel this was what God had for us, or for the candidate. It was hard for all involved, but I’m confident the time and resources of the selection process helped us avoid the wrong hire.

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This Is Not My Favorite Thing To Do

©Mat Hayward / Dollar Photo Club

We all have tasks we don’t like in our life. Or, as I teach my kids to say about foods they don’t like — “it’s not my favorite.”

I did a ministry task this week I didn’t like. What about you? What church or ministry task don’t you like?

My task: determining closure of offices, and cancellation of ministry opportunities and Sunday services due to inclement weather.

Three days of ice and sub-20 degree temps is a big deal in middle Tennessee. Did I mention a closure meant closing our doors to our wonderful ministry partner, Room in the Inn, a housing option for the homeless in our city? Shutting down the offices is one thing, but shutting down ministry is another. Also, did I mention it was the cancellation of Sunday services at our highest attended campus?

There was a lot at stake: homeless individuals needing shelter, eager volunteers, lost work, safety, liability, financial losses… I grew up in southern Arizona – I’m not equipped to make these decisions.

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Creating A Church Personnel Budget

Whether the personnel portion of your church’s budget is $50,000, $500,000 or 5,000,000, it should have at its core, some common elements.

If you’re involved in putting together your church’s personnel budget, here are key components and tactical steps you need to include (you can see it graphically here).

Step 1

Know and show your personnel budget number for the current year (ex. $300,000).

Step 2

Show any changes you’ve made to the budgeted amount throughout the current year (ex. you made a new hire and paid them $5,000 more than you had budgeted for the position. And you increased custodial hours from PT to FT, adding $18,000). You’ve then added $23,000 mid-year dollars to your personnel budget.

Step 3

This gives you your “Revised 2014 budget” (in example, $323,000).

Step 4

Estimate your insurance costs for new year. An insurance broker can often anticipate increased costs based on what they’re seeing in the market. They can provide you the percentage increase for your plan before actual increases are determined (an estimate is usually available in late summer). For the sake of example, let’s show your needed reserve for insurance to be $13,000. (Obviously, if you’re church does not offer heath insurance, you can skip this step.)

Step 5

Determine your anticipated merit raise figure. While I don’t affirm the idea of a pre-determined % increase for everyone, and instead, prefer a merit increase that ties into a performance management system, you can still have a percentage as the average increase.

So let’s assume that on average, you want to be able to provide a 3% merit increase. You’ll do the math to add 3% to the base salary portion of your personnel budget (remember to add in the impact of merit on retirement benefits if you provide for them).

Step 6

Show any anticipated next year personnel hires. Or if you’re reducing your staff, you’d show that reduced number (shown here as the “2015 Staffing Model”).

Step 7

Add these steps together. To arrive at your next year’s personnel budget figure, you’d begin with your “revised current year budget,” add “health insurance,” add merit raise dollar figure, and add any new hires (or reduce any eliminations) to get to your total proposed next year’s personnel budget.

Here’s an example of how to show these steps in a personnel budget document.

The personnel part of a church budget is typically a large percentage of a church’s budget, if not a majority of the budget. So you’ll need to justify it by having a well thought out procedure and explanation.

Having this prepared budget will help you as you take the budget to your church’s decision makers. For other suggestions for presenting an overall compelling church budget, see this previous post.

Happy budgeting.

 

 

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