Church budget freedom may sound like an oxymoron, but it is not! Read on.

Money discussions are not always the most positive of conversations. When talking about finances, have you ever heard a married couple talking about a budget and say with enthusiasm, “Guess what, we have $100 more dollars in our budget this month spend!!! YAY.”

More often is the case, what happens? There is a fight.

• “We have spent too much this month!”
• “How could you put that on the credit card?”
• “We are never going to catch up.”
• “We can’t afford this!”
• “Even though we budgeted $100, we can’t really spend it!”

Although this may sound counterintuitive, budgets are actually about offering people and organizations freedom to make financial decisions. Yes, budgeting is about making limits clear, but it is also about enabling the church to allocate resources to the highest priority areas and accomplish pastoral goals.

Let’s use the example of expenses. Budget freedom comes from knowing how much you have available to spend on a specific category (liturgical supplies, CCD books, vacation bible school), and then knowing that the money is, in fact, available to be spent.

Here is the key point – When a budget is created with the truth in mind – meaning being honest with how much you estimate that you really, truly have available to spend and being realistic about how much you really, truly expect to receive – the budget becomes a tool and not a penalty stick.

Why put together a budget if you really don’t want to spend the amount you have budgeted?

Some then argue, “BUT, what about saving money?” Great question!

If you want to save money, no need to always worry about it!  Instead of hoping that the money you have budgeted for a given category is not actually spent – budget a new expense line item called – Transfer to Savings. This way, you have specified an amount of money for each month, that you have budgeted AND where you can feel great about spending the full amount.

Budget development cannot be about wishful thinking or hopeless estimating – it must be about the truth.  Then, and only then, does the budget become a management tool, instead of a painful, anxiety-producing process and plan used to manage finances.

Free your mind and heart – change the conversation from constraint to freedom!

Read more about church budget freedom in our book: Parish Finance: Best Practices in Church Management.

Tip 1 is brought to you by the Church Finance 30/30 Series – Check back to the blog as I reveal my thirty favorite quick tips on the topics ministers struggle with most. We’ll discuss budgeting, financial decision-making, safeguarding assets, and facilities management.

There is powerful research that concludes that collaboration in fact yields results. James Surowiecki epic work, Wisdom of the Crowds, was groundbreaking in summarizing research that strongly supported the principle that “No one of us is smarter than all of us.”

One example in the book, that I found particularly useful in helping me understand the benefits achieved through collaboration, comes from the television game show, Who Wants to Be a Millionaire, hosted by Regis Philbin.

During the show, contestants worked through trivia questions in their attempt to win $1,000,000. As a fun twist, if the contestant faced difficulty with answering a question, they had three options available. They were only allowed to use each option once, throughout their time on the show. The options included:

1. 50-50 – The computer eliminates two of the incorrect answers, giving the contestant a fifty-fifty chance at the right response
2. Phone-a-Friend – Prior to the show, contestants singled out someone they could call for help who they considered one of the smartest people they knew
3. Poll the Audience – The studio audience would cast votes by computer

From the results* of the show, Surowiecki writes:

“Everything we think we know about intelligence suggests that the smart individual would offer the most help. And, in fact, the ‘experts’ did okay, offering the right answer – under pressure – almost 65% of the time. But they paled in comparison to the audiences. Those random crowds of people with nothing better to do on a weekday afternoon and sit in a TV studio picked the right answer 91% of the time…” (Wisdom of the Crowds, 2004, Page 4)

Tip 4: Collaboration is the glue of insightful leadership, shared-accountability, and results

What does this have to do with church budgeting? The show is just the fun example of the benfits of collaboration. But, collaborative budget processes and operational management does prove time and time again to yield results.

A budget that is developed by one or two people does nothing to build a broader spirit of shared accountability across the church. Many leaders feel they may lose control when they bring others into the budget process. However, management research proves that involvement by a team in financial matters, specifically people responsible for the finances of a particular area, will more likely lead to better results.

Why?

If someone is involved in the budget process, and they feel as if they have had the opportunity to offer feedback and input, they’re more likely to “own” and “buy-in” to what has been created. Without participation in the process, resentment builds and can ultimately lead staff to consciously, or unconsciously, undermine what has been created.

Collaboration paired with open communication is where the budget will help church managers achieve the greatest potential of their organization.

Read more tips from Church Finance 30/30 – 30 Tips in 30 Days!

*Note: Surowiecki admits that this experiment would not stand scientific scrutiny. However, other examples in the book, would, in fact, support such an inquiry.