WELCOME How to Build and Use a Be0er Budget Whos here? Churches - - PowerPoint PPT Presentation

WELCOME How ¡to ¡Build ¡and ¡Use a ¡Be0er ¡Budget

Who’s ¡here?

• Churches
• Schools
• Mission sending agencies
• Other ministry organizations

What ¡we’ll ¡discuss:

• Why and how to build a better budget
• Who should be involved in budgeting
• How to monitor and adjust
• How to present budget information for

maximum impact

Our ¡presenters:

Denise Craig Chief Financial Officer Abba’s House Jeremy Moore Ministry Development Officer ECCU Jac La Tour Communications Manager ECCU

Why ¡budgeting ¡ma?ers:

• Provides a clear path from money to

mission

• Helps refine priorities
• Ensures everyone is headed in the same

direction

Start ¡here:

• Know where you are.

– Financially AND culturally

• Lead with vision.

– Your core team must know and understand your mission.

• Timing: Now!

– Process should begin in September and be ready for presentation to donors by December 1.

Building and Implementing Monitoring and Changing Presentation to Donors and Updates

The Better Budgeting Stool

Budgeting ¡expenses:

• Zero-based budgeting: Start new every

year

– Discourages “sacred cows” – Encourages measuring every request against the current vision and ministry goals – Avoids blanket across-the-board cuts or increases http://www.ecfa.org/content/Zero-Based-Budgeting

Building ¡a ¡be?er ¡budget:

What to include:

• Missions
• Denominational fees
• Ministry departments

(youth, singles, etc.)

• Marketing
• Ancillary expenses (supplies, conferences)
• Facilities (mortgage, utilities)
• Personnel (W-2,1099, benefits)
• Savings

Budgeting ¡revenue:

• Past results
• Trends
• General economic conditions
• Challenge your donor base
• Take pledges to fund budget
• Planned changes (adding tenant, charging

for services, etc.)

Who ¡builds ¡it?

• Start and end with key staff (CFO, XP)
• Capable and empowered finance

committee

• All staff have input
• Congregational buy-in

Monitoring

• Frequently and consistently

– To be sure you’re able to meet unplanned challenges or seize potential opportunities

• Watch closely and often

– Build in consistent practices to monitor results

• Make changes when justified

What ¡to ¡monitor:

Building and Implementing

Monitoring and Changing

Presentation to Donors and Updates

The Better Budgeting Stool

Outside ¡conditions:

• National economic disruptions
• Changes at other ministries
• Regulatory environment
• Donor confidence

Financial ¡ratios:

• To compare to averages

(staff %, facilities %)

• Loan compliance (DCR, DSR, liquidity)
• Track progress and improvement
• Compare with peer group through

NACBA, ECCU Financial Forums, etc.

Importance ¡of ¡cash:

• Support cash flow shortages in low giving

months (summer)

• Ability to meet unplanned needs
• Take advantage of potential opportunities
• Shift from survival focus to mission focus!

Advanced ¡budgeting:

• Cash flow modeling

– Forecasting actual revenue inflows and expense outflows for high and low points to ensure adequate cash

• Yield optimization

– Ensuring optimal cash and highest return on assets by parking reserves in higher yielding funds (based on timing of need and short- vs. long-term investments)

• Fixed asset replacement

– Building separate reserve fund to replace items as they become

• bsolete (roof, HVAC, etc.)

Donor ¡presentation:

• Help your donors connect their money to

the ministry’s mission.

• Share stories.
• Keep informed.
• Provide updates on

progress and impact

• Communicate changes

e.g., www.longhollow.com/files/compelled_ministry_plan.pdf

Why ¡it ¡ma?ers?

• Connect money to mission
• Better prepare for unexpected
• pportunities
• Ensure that everyone is headed in the

same direction

Additional ¡resources:

• NACBA www.nacba.net
• CLA www.christianleadershipalliance.org
• CapinCrouse www.capincrouse.com/nfp_insights/
• ECFA www.ecfa.org
• ECCU www.eccu.org/resources
• @eccu and @jeremymoore

Thank ¡you!

If you have any questions or want to partner with an ECCU ministry development

• fficer, please contact us at 800.288.4846
• r solutions@eccu.org.