The Church budget is our mission and ministry in numbers.
The annual church budget is a vital piece of planning and a key responsibility of the PCC. The budget is not just a tool for controlling expenditure, it is your church's mission expressed in numbers.
It is straight forward to prepare a basic budget, although its purpose can be said to be far from simple. At worst a church budget will do no more than recreate yesterday for today and it will not be very appealing. Alternatively, a budget that captures a vision for the future can help to generate congregational giving that is connected to the church's mission. A good budget shows the priorities of your church and lays out the financial targets for the coming year: how much is needed to fulfil our mission and ministry?
Creating your budget
For a PCC the budget is a prediction, a 'best, informed guess', as to how much money the church might receive in donations and fees, along with how much money the church is likely to spend to fulfil its plans for ministry in the congregation and the wider community within the coming year.
The starting point for each year's budget will be the accounts from the immediately previous years, usually, in summary, form - a good summary to use is your annual Return of Parish Finance document. Simply entering the accounts from previous years into the provided templates will provide a 'first pass' or 'stand still' budget.
Fortunately, the Gospel isn't about 'standing still' and so to complete your budget, the costs of (and expected income from) any new mission initiatives or community projects will also need to be added to the budget templates and the mathematical predictions sense-checked. We offer two budgeting templates to help parishes.
A Simple Budget
The simple budget template uses only two previous years to make its predictions. As next year's budget is often created near the end of the (unfinished) current year, normally these two years would be the last full completed year's accounts and the best guess for the current unfinished year's accounts. This simple budget is ideal as a starting point for churches that have never budgeted before or are not confident working with numbers. It is available as an Excel spreadsheet from the Giving in Grace website.
Least Squares Budget
This sounds more complex than it is! The Least Squares Budget template uses three previous [complete] years to make a mathematical prediction, on a straight-line basis, what the future might look like. In this prediction the previous years do not all have to be consecutive; they just need to be fairly typical for your church. In addition, the prediction year does not have to be the immediately following year. The template contains detailed guidance on entering data into the Excel spreadsheet.
Links
Giving in Grace
Simple Church Budget
Uses three historical years
Least Squares Budget template
Contacts
For guidance in creating your Church's Budget, contact Cath or Gordon.
t: 0151 705 2180
cath.gaskell@liverpool.anglican.org
gordon.fath@liverpool.anglican.org