Sermon  •  Submitted   •  Presented
0 ratings


I want to welcome each of you, your churches, your Discover Campuses. I pray that your tier two experiences propels you into all that God has for you, your calling, your ministry and leadership.
Today we are discussing budget. Now before you completely check out, I want you to view this topic with great importance. Jesus talked about money and possessions frequently. Stewardship of God’s kingdom resources is important.
According to March 2022 article by Christian Today says,
“1 in 3 churches will be victims of embezzlement, but 27% won’t report the crime. Because churches trust people to do the right thing, members often have a hard time believing they have been victimized — even after a church employee has been convicted of embezzlement and sent to prison”
Stewardship and financial management matter! They matter to God, they better matter to you.
Before we go any further with the nuts and bolts of budget management, I want to share with you a quick joke:
A pastor explained to his congregation that the church was in need of some extra money, so he asked them to consider being more than generous, offering whoever gave the most money the chance to pick three hymns.
After the offering plates were passed about the church, the pastor glanced down and noticed that someone had graciously offered up a total of $1,000. He was so excited that he immediately shared his joy with his congregation and said he’d like to personally thank the person who placed the money in the plate.
A very quiet, elderly, saintly lady in the back of the church shyly raised her hand. The pastor asked her to come to the front, so she slowly she made her way towards him.
The pastor told her how wonderful it was that she gave so much, and in thanks he asked her to pick out three hymns. Her eyes brightened as she looked over the congregation. She pointed to the three most handsome men in the church and said: “I’ll take him and him and him.”

Much of my resources come from leaders.church organization and from Building Leaders.

Guidelines for a Healthy Church Budget

We are going to unpack guidelines for church budget in this teaching.
For years I worked with not for profit organizations, non-profit boards, and churches. One thing I learned. Percentage guidelines for church budgets are helpful, but always need to be fluid in their application.
Every local church is a unique microcosm of God’s Church.
Each church has to prayerfully consider their mission, culture, history and future to determine how the proper allocation of budget dollars should play out.
How is a Budget Different than a Financial Statement?
At the outset, I remind churches that a budget is different than a financial statement.
A budget shows you how you plan to spend your money BEFORE you spend it.
A financial statement shows how you spent your money AFTER you spent it.
There is a big difference. Far too many churches literally do not have a budget. They think because the treasurer, bookkeeper or administrator shows them a monthly financial report that they are good to go. Not even close. Not good!
A wise and discerning pastor/leader will always count the cost before doing anything. In the book Luke 14:28–29 says, “But don’t begin until you count the cost. For who would begin construction of a building without first calculating the cost to see if there is enough money to finish it? Otherwise, you might complete only the foundation before running out of money, and then everyone would laugh at you.”
If you’re going to do something, it is critically important that you sit down in advance and count the cost. Before a church embarks on its calendar or fiscal year it must be diligent in planning expenditures, a budget.
Secondly, as you prepare for the budget season - don’t get caught in the snares when dividing up the money.:
GARY FENTON says that there are at least four traps or unhelpful mindsets that Pastors and leaders will fall into:
1. The Line-Item Trap
Someone who places a high priority on evangelism notices the line item for outreach is only half that for music. He concludes, with some disappointment and anger, that the church thinks more of music than saving souls.
Taken in isolation, line items don’t communicate a church’s true feelings about a ministry. You have to dig deeper to measure that. For example, funds for outreach could be scattered throughout the budget, under “administration” and “personnel,” for instance. Outreach could be more important than the line item showed.
2. The Priority-Demands-Money Trap
Leaders may give a ministry more money, thinking they are giving it higher priority. This is wrong because it works on the assumptions that
(a) giving more money is the only way to raise a ministry’s status, and (b) a church has only one budget.
Every congregation has at least two budgets. As well as the financial budget, a second and equally important budget is the time budget—the church calendar. Priority may not mean more money but a better time slot.
3. The Easy-Compromise Trap
Budget preparation is one of the most stressful times of the year. Conflicts can escalate into ego wars, with program leaders becoming battalion commanders and members the ground troops.
Say, for example, two ministries each want a ten percent increase, but there is only enough money to give ten percent to one. Solution? Give each five percent, right?
This quick compromise reduces tension, but it betrays the church’s vision. If the church has named a particular ministry for emphasis, then the church’s will has been truncated.
Certainly compromise is necessary, but if everything falls into place without healthy debate, it may mean the priorities of the church have been put aside for the comfort of the leaders.
4. The Meaningless-Motto Trap
Watch out for the words and phrases that bear no relation to reality. “Zero-based budgeting” is one example.
Another is labeling every church expense a “ministry.”
The motto can mean nothing if the church starts charging office supplies to missions in order to balance the
What is the significance of having a budget in a church setting? How does it contribute to effective financial stewardship?
Every church is unique. How should a church consider its individual mission, culture, history, and future when determining budget allocations?
Discuss the difference between a budget and a financial statement. Why is it crucial for churches to have a budget in place before the fiscal year begins?
How does the biblical principle of counting the cost (Luke 14:28) relate to the process of church budgeting? What are the potential consequences of not having a well-thought-out budget?
Discuss the potential implications of falling into a “Budget Snare”, as mentioned in the text. How can misunderstandings arise when evaluating budget allocations based solely on line items?
Second Section:
Healthy Church Budgets are aligned around a strategy.
It is important to develop a strategic plan - where are we going? How are we going to get there? How much is it going to cost? Often times - churches are working without a plan and their budget reflects that too.
Prioritize what you can do in that fiscal year
Align your budget around the mission and strategy
Your calendar must reflect your strategic priorities and budgets are prepared around that.


The most common question I get as it relates to budgets is, “What percentage of our budget should go to salaries?” Salaries and benefits are almost always the single largest line item in any church’s budget.
The numbers I have seen over the years for total compensation percentage have been in the 30 – 50% range. I provide you three illustrations from Leaders.Church. 
Sometimes it is difficult to reduce compensation but may be necessary when dealing with a tight budget. Also, determining a floor and ceiling for these major categories of budget will be necessary.
If your percentage for total compensation is too low this is an opportunity for the church to improve compensation for staff. However, be careful to not just spend up to some pre-determined percentage just to say you’ve done it. Do not pay people more just to match a percentage figure.

Percentage allocation of a church budget:

Relative to other big bucket items allocated from the church’s general fund (tithe) budget, if you are doing 50% to compensation, I recommend the following for the others:

Illustration A

50% to compensation10% to savings10% to missions15% to building expenses i.e. mortgage, maintenance, custodial, etc.15% to ministries, evangelism, youth, children, etc.
My understanding is it that the Association of Related Churches (ARC) suggests these percentages. Then each budget year you base the annual income budget on 90% of the previous year’s annual income. Any difference you have goes toward your savings. This savings can then be used for capital improvements or advanced ministry.

Illustration B

35% compensation35% building (maintenance and capital improvements)20% ministries10% missions
Another way to allocate money is to do 1/3, 1/3, 1/3. It would look something like this.

Illustration C

33 1/3% compensation33 1/3% ministries33 1/3% building (maintenance and capital improvements)
One of the things not to do is, when you save in one area, do not automatically go spend in another unless you are doing things to position the church financially for future expansion, building, etc. I understand that in our debt-crazed culture, savings is not popular. But I can tell you, whenever you can save for the future, you really need to take advantage of that opportunity.
To the extent that a church’s line item is less than recommended in one area, that allows the church to allocate more in another area. For example, in Illustration A above, if a church has 40% going to total compensation, they may be able to increase allocation 25% to ministries or split the 10% (50%-40%) compensation difference with 5% more going to mortgage pay down and 5% going to ministries.
Smart, growing churches will save unspent dollars to strengthen their capital improvement capacity in the years to come. In other words, in our example above they would take the additional 10% (50%-40%) and either pay down on their mortgage, save or do a combination of both.

When It’s All Said and Done…

The total expenses have to add up to 100%. Too many churches fly by the seat of their pants and spend 105% or 110% of their total income. In doing so, they fall behind in budget and move into more and more debt. This is a dead in the water approach. Do not spend more than you take in.
Whether you use Illustration A, B or C, the point is to land on one of them and stick with it. Any of them can work.  However, wise pastors and church boards regularly re-evaluate to put more and more to savings and increase the ability to expand ministry.
At the end of the day, churches need to be the best in how they budget their financial resources to the mission the Lord has given them for their community.
Churches that think, pray, plan and execute well-thought out budgets see the best results for the Kingdom. Those that do not fall woefully short in being the stewards God has called them to be.
The wise and discerning pastor/leader of God’s church – your church – does all they can to be the best stewards in budgeting His resources.
How important do you think strategic planning is for a church's financial health, as discussed in the text?In your experience, have you been part of a church community with a clear strategic plan, and how did it impact budgeting and decision-making?
What are the common challenges faced by churches in allocating budget percentages, particularly in relation to compensation for staff?
Budget allocation examples of A, B, and C provide different models for budget allocation. Which model resonates with you, and how might it be adjusted to fit the unique needs of a specific church community?
The teaching emphasizes the importance of not spending more than the church takes in. How can churches ensure financial discipline and avoid falling into the trap of overspending?
In what ways can churches use unspent dollars to strengthen their capital improvement capacity, and why is it essential for long-term financial health?
The conclusion highlights the need for churches to be the best stewards of their financial resources. How can church leaders ensure that their budgeting process is thoughtful, prayerful, and well-executed to achieve the best results for the Kingdom?
Related Media
See more
Related Sermons
See more