10 Ways For Churches to Save Budget Dollars

Church leaders are burdened with being good stewards of God’s money and managing church resources is every bit as challenging as any other organization. The economic downturn has taken its toll on churches all across America and they are looking for ways to cut spending while attempting to maintain their mission and charitable work.

10 Ways for a Church to Save Budget Dollars

1. Budget Toward the Vision

An important first step with any church budget is ensuring that it supports the mission of the church. This requires having a plan and a strategy that is funded by church finances. Keeping budget dollars allocated to church strategy ensures that dollars are only spent on those things that contribute to achieving objectives that support the mission. Charter a budget oversight committee that is responsible for ensuring that budgeted dollars are spent on those things that further the mission of the organization. For example if a department is overspending their supply budget by $1000/month and that goes unchallenged for a 12 month budget cycle, it could mean the difference in $12,000 for the year! One of the most important ways to reduce church spending is to have a budget and an oversight body watching how dollars are spent.

2. Manage Employee Performance

Eliminate time wasted on employees performing tasks that don’t add value to the organization which can help to optimize performance and minimize the number of FTEs needed for paid labor. Increase employee productivity by helping them stay focused on what is most important to achieving church strategy by learning to manage employee performance.

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3. Process Improvement

Churches need to be continually looking at internal systems and processes to ensure they are maximizing resources. This includes looking at how work is performed, how church is organized and finding ways to improve. FOCUS PDCA is a great tool to use when trying to improve internal processes. For example, I worked with a children’s ministry that found a way to save money by automating their check in process. By investing a few dollars in some hardware and software they saved by eliminating wasted time manually inputting attendance data week after week.

4. Have an Internal Auditing Process

Those who have responsibility for church finances need to have a clear understanding of how dollars are spent and an assurance that money is being spent appropriately. Auditing of invoices and receipts is important to ensuring that spending is only on those items that are supported by budget and policy. For example, if there are policies and spending limits for travel, audits should be performed on expense reports to ensure spending per day complies with internal policies.

5. Get Rid of the Credit Cards

This is a controversial statement I know but a quick way to curb spending is to minimize the use of credit cards. Credit cards are required to make online purchases, but limiting credit card usage to the person who has responsibility for the purchasing function can be a quick way to reduce spending. So what about other church employees who need a credit card to conduct church business

There are two ways to address this, the first is to have them submit a request for a cash advance to purchase an item ahead of time and be required to submit receipts with an expense report to demonstrate the dollars were spent only on those items that were requested. The second approach is to ask them to use their personal credit card and submit their receipts for reimbursement. This approach gives them assurance that the spending will be reviewed and most people aren’t going to take the chance of not getting reimbursed for unauthorized spending.

I know a few of you are probably screaming about now but try it for a year and see if it doesn’t make a huge difference in unauthorized and impulse spending. Think about it, do you spend more of your personal money if you use cash or plastic? Same principle.

6. Outsource Opportunities

Outsourcing unrelated business services has become a major cost savings for many organizations over the last few decades. Take a good hard look at those internal functions, that are not ministry related, that could probably be done less expensively if outsourced. For example, a church I worked with decided to outsource the custodial services because it was less expensive than paying the salary and benefits of a full-time employee. In addition, the burden of covering the position if the employee did not show up for work was on the outplacement company. It was a win-win for both.

7. Maximize Volunteer Labor

Volunteers are one of the best resources churches have and maximizing that free labor by providing a well run volunteer program is an important way to reduce church budgets and save ministry dollars. If volunteers are given opportunities to help and have an organized and structured process to work in, they feel fulfilled for their efforts and the church saves money. It is well worth the time to create a well run volunteer program.

8. Maximize Electronic Media

Technology can be a great way to save dollars and using a church website to save budget dollars is a great approach. Things like the weekly bulletin, weekly message podcasts, email blasts to replace paper and postage for large mailings, are all ways to save printing and postage expenses.

9. Educate Employees on Spending

Spend some time educating staff on the church budget and how spending impacts the bottom line and the services the church is able to provide. For example, a church I worked with did an audit on spending and found that costs for courier services were really high. I gathered the employees who used those services and shared with them how much the costs were and they were apologetically surprised at the costs the ministry incurred. At the session we brainstormed ways for reducing the need and frequency for courier services and noticed a 75% drop in courier spending over the next few months. Most employees are sensitive to church spending but sometimes need to be made aware of costs.

10. Ask Volunteers and Employees to Identify Waste

As with most things in management, if you want to find the solution to a problem, ask those who are closest to the process. Employees facilitate the process for volunteers to do the work and those two groups are so close to the process that they can easily identify waste. Gather a group and do a brainstorm session on how to reduce waste across the church campus and you’ll be amazed at what useful information you will uncover.

God provides churches with resources and it is the responsibility of those managing those dollars to be good stewards. Being aware of spending and looking for ways to conserve resources, and ensure dollars spent are solely on those things that are mission focused, is the best way to be good stewards of the money God provides a church body.

What are some more ways to effectively manage the church’s budget and save money? Leave a comment below!

The article is a guest post from Patricia from Smart Church Management. She has created an online course to help churches be more effective with their staff and she provides church consulting services to help churches fulfill their call by managing the resources God has given them.