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: Jac La Tour Jeremy Moore Denise Craig Communications Ministry Development Chief Financial Manager Officer Officer ECCU ECCU Abba’s House
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: The Better • Know where you are. Budgeting Stool – 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 Presentation Building and for presentation to donors to Donors and Implementing Updates by December 1. Monitoring and Changing
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: The Better Budgeting Stool Presentation Building and to Donors and Implementing Updates Monitoring and Changing
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 obsolete (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 opportunities • 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 officer, please contact us at 800.288.4846 or solutions@eccu.org .
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