Think twice about passing a deficit budget

Progressively bigger stacks of coins grow plant shoots.
 on April 1, 2020

I want to share some personal thoughts with parish leaders about the idea of presenting a deficit budget at vestry time. I can appreciate that this article will be read after-the-fact for most parishes, but the message is no less important and compelling for future years. Aside from the initial sentiment that deficit budgets should be avoided at all costs, there is a fundamental stewardship concern that arises from this situation.

If the steward of a household lacked the resources to sustain operations or maintenance of the property, they would essentially have two choices: find additional sources of revenue to supplement existing income or reduce costs. In the case of a parish, it would mean asking for more from the congregation, renting out space or reducing program and/or personnel costs.

Some parishes are in an enviable position, having prudently put aside funds for a rainy day. Inevitably, parishes encounter years where giving is reduced, or anticipated revenue is not realized. In such cases, reserve funds are invaluable. Of course, the big concern is when parishes are consistently drawing down these reserves, to the point where they are extinguished entirely. Without consideration of future needs, parishes operate at their own peril.

Why not plan for a balanced budget and take the necessary steps to ensure that objective is fulfilled? This approach indicates to me that a charitable organization has a plan in place to fulfill its ministry and demonstrate to donors that their gifts will be used as intended.

I mention “charitable organization” for a reason. Each church is, in fact, a charity. And a charity maintains the confidence of donors when it lives within its means. If a charity is not in the habit of spending funds in a responsible and restrained manner, it may find that it undermines its trust relationship with the very people it depends on for its security.

It is important to realize that the churchwardens and clergy are trustees of present temporal resources. Just as we relied on previous generations to sustain and grow ministry, so to must we position ourselves so that future generations can expect at least the same from us. And the last thing we want to do is tie the hands of next year’s budget team who are forced to pay for last year’s expenses going forward.

One final thought. We have all heard of the demographic changes that are taking place among faith communities and the apparent fiscal uncertainty facing many congregations. We are older and fewer in number. Some parishes are growing, but most are not. With this in mind, we would do well to live within our means.

We can’t presume that a flood of new congregants will give at levels equal to our most faithful and generous givers. Such generosity takes years to mature, as you well know. We would do well to cultivate the gifts we currently have, without presuming what we “might” have. We would also do well to consistently message our congregants on the importance of good stewardship and proportionate giving.


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