budgeting 101 for ministry organizations 8.13.12 final · microsoft powerpoint - budgeting 101 for...
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WELCOME
Budgeting 101 for Ministry
Organizations
August 16, 2012
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Who’s here?
75% Churches
5% Christian schools and
mission sending agencies
20% Other ministry organizations
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How to participate:
• Open and close your panel
• Submit text questions
• Questions will be addressed at the end of today’s session
• Everyone will receive an email with a link to view a recorded version of today’s session
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Our presenters:
Mark Jones
VP and Senior Banking Consultant
ECCU
Vonna Laue
Audit Partner
CapinCrouse LLP
Ingrid Robinson
Founder/CEO
Lenshaw Financial Services
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Agenda:
• Aligning budget to strategy
• Budgeting approaches
• Before you get started
• Budget preparation and approval process
• We have a budget. What now?
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Overview of budgeting
key principles:
• The budget must be based on a sound
and clearly defined strategic plan.
• The budgeting process must involve
extensive collaboration.
• The approved budget must be monitored
on an ongoing basis.
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Developing a strategic budget:
• Review mission, vision, and values:
– What is your 5-year plan?
– What are your key objectives and outcomes?
• Determine (forecast) income.
• Determine allocation by program/area.
• Communicate allocation.
• Set up contingency (reserve) funds.
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Budgeting process:
• Budgeting types:
– Zero-based
– Incremental
• Budgeting approaches:
– Top-down
– Bottom-up
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Budgeting—before we start:
• Align your ministry financial structure to
your mission/vision:
– Can you tie back your budget/reporting to
what is most important to your organization?
• Review your mission/vision.
• Create a budget/reporting structure that shows
how you are accomplishing your mission/vision.
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Our Vision…to build joy-filled communities of faith whose very existence inspires every individual to live R3.
What is R3?
It is the balanced, abundant Christian Life, made up of three key [r]elationships:
� [r1] A deepening relationship with God
� [r2] A life-changing relationship with other believers
� [r3] An engaging relationship with those yet to believe
Worship Community Outreach
Operations
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Entire Ministry
Community
Sam
Outreach
Sally
Local
Adult Care
Karen
Adult Groups
Drew
Operations
Keith
Facilities
Jim
Foreign
Worship
Bill
Students
David
Children
Janet
Finance
Mark
Office
General Operation
Todd
Restricted Funds
Todd
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Budgeting—before we start:
• Review chart of accounts setup:
– Keep it simple:
• Use general categories.
– Make it meaningful to your organization.
– Utilize department/program structure:
• Class functionality in QuickBooks
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Budgeting—before we start:
• Budgeting spreadsheet:
– Align spreadsheet with your financial structure:
• Budget for each department/program area.
• Roll up departments/ministry areas to entire
organization.
• Show prior year totals for comparison.
• Sample spreadsheet
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Budget preparation:
• Preparing a draft:– Involve department/ministry leaders:
• Justify their budget
• Align budget with strategic objectives
– Merge department budgets (refer to sample).
– Determine budget gap (projected revenue vs. expenses).
– Discuss and determine revisions.
– Spread the amounts by month.
– Prepare additional budgets for surplus and shortfall.
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Budget approval:
• Who is involved?
– Leadership
– Finance committee
– Full board
– Congregation (if required)
• What information do you present?
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We have a budget. What now?
• Monitoring
– Implement into your accounting software.
– Monthly reporting:• Department/ministry leaders
• Leadership team
• Board and/or committee
• Others (e.g., congregation)
– Accountability
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Questions?
Mark Jones
VP and Senior Banking Consultant
ECCU
Vonna Laue
Audit Partner
CapinCrouse LLP
Ingrid Robinson
Founder/CEO
Lenshaw Financial Services
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Resources:
• Examples of budgeting spreadsheets, chart of accounts, class listings, and organizational financial structure
• Budgeting Checklist
• White papers like How to Budget in a Changing Economy and Cash Reserves: How Much Is Enough
• Budgeting books, websites, and online resources
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Upcoming webinar:
• Advanced Budgeting:
– Date: Thursday, August 23, 2012
– Time: 10:00 – 11:00 a.m. (PT)
– To register visit:
www3.gotomeeting.com/register/692040454
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Upcoming events:
• 2012 Financial Seminar for Churches and
Nonprofits
– Locations/dates: Denver (10/2), Fort Worth
(10/3), Dallas (10/4)
• 2012 Financial Forum for Ministries
– Locations/dates: San Diego (11/6), Livermore
(11/7), Brea (11/8), Denver (12/4)
For more information, visit:
www.eccu.org/resources/events/
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Thank you!
If you have questions or would like to speak
with an ECCU ministry development
officer, please contact us at 800.288.4846