by David Washburn, BGAV treasurer

I am often asked if there’s a good way to effectively allocate expenses within a church budget to maximize ministry and streamline operations. The organization of church budgets is certainly unique to each church, which is why I typically categorize a church’s budget into four broad classifications – Personnel, Properties, Programs, and Partners.  

• Personnel is the total cost, including salaries, benefits, FICA, reimbursable expenses, continuing education, etc. for all church employees and contract workers.  

• Properties is the total cost of operating church facilities, including mortgage payments, utilities, maintenance, equipment, vehicles, insurance, and repairs.  

• Programs are the church’s ministries like youth, worship, benevolence, children, discipleship, communion, baptism, etc.

• Partners are the local, state, national, and international organizations the church partners with for kingdom purposes, such as the local Habitat for Humanity or the state association (BGAV).

Personnel and properties are typically the two areas of the church budget with the highest total cost. They are often referred to as fixed costs, because they are consistent throughout the year and typically cannot be adjusted. When these two categories are somewhere between 60-70% of the total budget, you have 30-40% remaining for programs and partners. This usually provides financial flexibility for the church to invest in its ministries and partners, carrying out its vision. Of course, the lower the percentage for personnel and properties, the more ministry investment can be made.

When personnel and properties start approaching 80% of total expenditures, the church often finds it much more difficult to carry out its mission, with far less financial flexibility to respond to the ministry needs of the congregation and community. Fixed costs become a danger zone for ministry effectiveness.

Church budgets are organized in any number of ways, which is the beauty of the dearly held value of church autonomy. I encourage you to look at your church budget by grouping your expenditures into these four categories to see how you’re doing. I believe you’ll find it informative and insightful as you and your church seek to improve your kingdom effectiveness.  

David Washburn can be reached at david.washburn@bgav.org.

‍