April 5, 2017

Narrative Budgeting

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On today’s Whiteboard Wednesday, Randy Weener, Classis Leader for Great Lakes City Classis, discusses the importance of narrative budgeting for your congregation.

It is important to know that the drivetrain on your car is working. And that everything under the engine is working. But for most of us, our concern is not with the details, but with the car getting us to where we want to go.

The same is true about the annual church budget.

People want to know that someone has given detailed attention to all the line items of a budget. But most congregational members are only interested in whether or not the budget will get their congregation where they need to go, and if the church can afford it. They are not concerned about how much money is going into the cookies after worship on Sunday morning, or what the copyright license costs.

That said, there is a type of narrative budgeting that may be helpful. Rather than doing the budget in a traditional sense (i.e., listing the line item number, line item description, and amount allocated on a spreadsheet), narrative budgeting focuses on the various themes that cover a budget. These themes may include outreach, discipleship, missions, operations, worship, and so on. In narrative budgeting, each theme is listed, along with a corresponding vision statement.

For example, let’s assume that Outreach is a theme. Beneath the theme there is a compelling vision statement that summarizes what the theme is about. For Outreach, the vision statement might be something like, “We believe that God is calling us to make Jesus known in every household within a 2-mile radius of where we worship. Thus, it is necessary for us to meet people where they live before we can expect them to come to where we are.”

After the vision statement, you can provide a list of where the budgeted funds are projected to be used. In our Outreach example, the list might include five block parties, a back-to-school fair, gift certificates, and annual dues for joining the chamber of commerce.

Another area that needs to be encapsulated are staff expenses. Without question, one of the major expenses in a church’s budget is staffing, yet we often isolate staff expenses rather than incorporating staff expenses into the ministry areas in which staff members work. For instance, if a pastor is spending 20% of his time or her time in outreach, then apply 20% of their salary and benefits to the Outreach theme.

Narrative budgeting provides a fuller picture of what is really being spent on each theme. With narrative budgeting, you end up with paragraphs, which will help develop an understanding and compelling budget. It will also enable you to highlight the vision, and to see where money is being allocated.

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