If you’ve been in church leadership for long, you likely won’t have trouble imagining this scene. You’ve probably lived it at some point.
You’re moderating an annual church membership meeting. You think you’re prepared with a well-crafted, prayed-through budget. You’re sure there will be questions and a few concerns shared, but you’re ready for whatever comes your way.
Then, suddenly, everything goes off the rails. Questions start flying everywhere.
- Why are we spending so much on staff salaries and cutting back on ministry expenses?
- Where is the specific breakdown of spending? The budget you’ve given us is vague. Are you hiding something?
- Why are we spending so much on technology costs? Are we seeing any value in those expenditures?
- Who are these outside contractors you’ve included in the budget? Why does a church need to hire consultants?
And now, your once smooth budget meeting has turned into a war zone. It didn’t have to be like this, though. It’s likely the problem began long before you planned for the meeting. Your problem was your process. It simply wasn’t transparent enough.
Tim Keller once said, “In the church, we have to deliberately let ourselves be transparent and accountable to others. We’re a family.”
Transparent budgeting isn’t just a financial obligation for your church, it’s critical to building trust both inside and outside of your church family.
Understanding Transparent Budgeting
Transparent budgeting is a commitment to share openly all aspects of a church’s financial future, from income to spending, with the people who need that information to make informed decisions. It’s about ensuring that every financial decision your church makes aligns with your church’s previously agreed upon mission, vision, and values—and painstakingly showing how it does so.
Trust in public institutions has been declining for years, and churches are not immune to this trend. A recent report by Barna, titled “The Trust Factor,” highlights how trust issues particularly affect younger generations. While churches still rank among the more trusted institutions, a growing number of Gen Z and Millennials (about 18 percent) express a complete lack of trust in them. The report identifies several key factors related to transparency, such as responsible resource use and clear communication, as essential for building trust across all generations.
The bottom line is this: increasing transparency will build trust among your congregants and likely help to grow giving over the long haul.
Transparency also helps you build an environment where all the key stakeholders in your congregation — lay leaders, staff, members—have the information they need to make informed decisions.
Sure, increasing transparency in your budgeting process comes with risks. You may face more criticism, and it may require more work (at least at the outset).
But the trade-offs far outweigh those risks. You’ll still have tough conversations even after your process becomes more transparent, but this approach leads to an environment where trust grows and better decisions are made.
Key Components of Transparent Budgeting
There isn’t a one-size-fits all approach to transparent budgeting for churches. Congregations will do it a bit differently because their contexts are different.
But here are a few key components of a transparent budget.
- Detailed reporting: A transparent budget needs to break down all income sources and expenditures, including staff salaries, ministry programs, and operational costs.
- Regular updates: Pick an update cadence for each group of stakeholders in your congregation, from your leadership to church members. Whether you give updates monthly, quarterly, or consistently, communicate the cadence and be consistent in delivering the updates in that time span.
- Be clear: Make sure everyone can understand your church’s financial data by using simple language, visuals, and summaries. If you’re not sure if it makes sense, ask your friends, neighbors, etc., to take a look and see if they’re confused. Consider hosting a public forum (before the budget vote) to provide further clarity on the budget decisions.
- Offer varying levels of transparency: While it might seem contradictory at first, transparency doesn’t mean disclosing everything to everyone. Instead, it’s about consistently providing the right information to the right people so that they can make informed decisions. For example, a finance committee might require a detailed breakdown of every expense, while the general membership might only need a summary. In fact, sharing too much information can backfire, causing confusion instead of the intended clarity.
Remember, transparent budgeting is about building trust by keeping the people in your church informed in a way that empowers them to get involved and support the work of your church family.
Practical Tips for Getting Started with Transparent Budgeting
Like just about anything else in church work, getting started with transparent budgeting can be the most daunting part of the effort.
Start small.
These three ideas will get you started.
- Share basic financial updates regularly. Work toward a more detailed financial update but start today with a regular cadence of communicating to different stakeholders about your church’s finances. See what questions people have and adjust your communication for the next time.
- Encourage questions. Let people know you’re open to hearing from them about questions they might have about your church’s financial plan. Consider providing a place where people can ask those questions anonymously.
- Simplify your budget presentation. Reduce the amount of financial jargon you use in describing your budget. Include some simple graphs and charts to be even clearer about the decisions you’re making.
- Leverage technology. Use tech tools to help you develop easy-to-understand reports. Tools, like Realm, let you create clear, compelling reports in just a few simple taps.
Transparency isn’t something you need to do all at once. Depending on where you’re at right now and the staff support you have, it’ll likely take some time.
Tennis great Arthur Ashe once said, “Start where you are. Use what you have. Do what you can.” Ashe wasn’t talking about church budgets when he shared that, but it’s good advice for anyone trying to get a handle on transparency in church finances.
To learn more about building the kind of church budget that will grow with your church (not stand its way), check out free guide: Budgeting Today for Tomorrow’s Church Growth.
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