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November 11, 2009

Church Budgets: How Much for Staff, Buildings, and Ministry?

An executive pastor suggests a different analysis of expenses.

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Paul Clark, one of Your Church's contributing editors, wrote an interesting post this week on his blog. Paul is an executive pastor who at one time spent several years in a managerial role with General Electric. His business background gives him an interesting perspective on how churches operate.

This week, Paul challenges three common questions often asked among church administrators: What percentage of a church's budget should go toward personnel expenses? Facilities? Ministries?

He writes:

"Those are great questions, but they are a bit narrow in their scope. The reality is that a church budget is a reflection of the overall strategy and focus of the church in a given calendar year. That focus can change from year to year and consequently, the budget percentages will change accordingly."

Paul then illustrates what he means, making the case for projecting expenses further into the future to truly understand overall budget ramifications.

Earlier this year, Your Church did a comprehensive survey with church leaders regarding church budget priorities.

The average breakdown in expenses for church operating budgets, based on responses from 1,168 church leaders:

- 38% toward salaries and wages
- 12% toward buildings/facilities
- 8% toward utilities
- 7% toward ministries and support

Our survey participants mostly hail from small- to mid-sized churches; organizations like NACBA and Leadership Network, both of which typically survey larger churches, report salaries and wages, on average, take up 45% to 50% of church operating budgets.

Like Paul asks, how does your church assess these expenses, and how those expenses reflect--or don't reflect--the church's direction now and in the future? Is an analysis like Paul proposes more instructive for current and future church budget planning?

Related Tags: administrators, Budget, budgets, business administrators, church budgets, church buildings, compensation, executive pastors, facility, finance, ministry, planning, salaries, staff

Comments

Executive pastor what is that? 38%-50% not bad for those who say they love the Lord.

With regard to the cynical comment by jerome.
40% of a church's budget whose annual income is $75k and whose parsonage expenses account for approx 30% of the "package' ...A pastor with a family of 2 kids or more IS living by faith. "Real" compensation is "Medicaid level" for health care purposes. Neither the pastor or the church are left with much budgetary wiggle room.

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