Budgeting, including Budgeting, including Narrative BudgetsNarrative Budgets

Central Atlantic Conference Central Atlantic Conference

September 9, 2006September 9, 2006Bob ZieglerBob Ziegler

A QuizA Quiz1. Budgets are 1. Budgets are (select all that (select all that apply:apply:• A listing of all sources of revenue and A listing of all sources of revenue and

all types of expendituresall types of expenditures• A way to authorize the expenditure A way to authorize the expenditure

of fundsof funds• A meaningless exercise since who A meaningless exercise since who

can predict with any certainty the can predict with any certainty the congregations giving and what congregations giving and what expenses will be?expenses will be?

A QuizA Quiz1. Budgets are 1. Budgets are (select all that (select all that apply:apply:• A way to engage the congregation, A way to engage the congregation,

getting them to understand, identify with getting them to understand, identify with and support particular missionsand support particular missions

• Something that changes little from year Something that changes little from year to year – “Use last year and add/cut 5%”to year – “Use last year and add/cut 5%”

• A way to really get committees, councils, A way to really get committees, councils, consistories, etc. dreaming about what consistories, etc. dreaming about what “could be”, if only there were funds to ….“could be”, if only there were funds to ….

A QuizA Quiz1. Budgets are 1. Budgets are (select all that (select all that apply:apply:• Something that only a few people in Something that only a few people in

the congregation know aboutthe congregation know about

A quiz:A quiz:2. Other questions about 2. Other questions about budgetingbudgeting• Does your congregation have a Does your congregation have a

budget?budget?

• If so, do you find it to be a useful If so, do you find it to be a useful tool, or is it just tradition that one is tool, or is it just tradition that one is preparedprepared

A congregational budget can A congregational budget can be:be:

• Important in determining whether Important in determining whether the programs and missions can be the programs and missions can be fundedfunded

• A useful tool to communicate the A useful tool to communicate the mission and vision of the mission and vision of the congregationcongregation

Types of budgetsTypes of budgets

•Line itemLine item

•NarrativeNarrative

•HybridHybrid

Line item budgetsLine item budgets

20022002 20032003 20042004 20052005

ReceiptsReceipts

EnvelopesEnvelopes $100,00$100,0000

$110,00$110,0000

$110,000$110,000 $115,000$115,000

PlatePlate $3,000$3,000

$3,400$3,400

$3,500$3,500 $3,500$3,500

EtcEtc

Line item budgets:Line item budgets:

• Are traditionalAre traditional

• Fail to convey much excitementFail to convey much excitement

• Fail to provide a sense of the mission Fail to provide a sense of the mission behind the numbersbehind the numbers

• Still need to be created, whether or Still need to be created, whether or not a narrative budget is being not a narrative budget is being createdcreated

Creating a line item budgetCreating a line item budget

• Obtain as much involvement of the Obtain as much involvement of the congregational leaders as possible – congregational leaders as possible – it should not be viewed as “the it should not be viewed as “the budget committee’s budget”budget committee’s budget”

• Include a level of detail that will allow Include a level of detail that will allow for measuring actual against budget for measuring actual against budget – useful for building next year’s – useful for building next year’s budgetbudget

Creating a line item budgetCreating a line item budget

• Consider two budgets – one that can Consider two budgets – one that can be a challenge budget that would be a challenge budget that would include the congregation’s dreams, include the congregation’s dreams, one that is more bare bonesone that is more bare bones

• Don’t finalize the budget until there Don’t finalize the budget until there is an indication of the revenue that is an indication of the revenue that will be collectedwill be collected

Implementing Implementing Narrative Budgeting Narrative Budgeting in your Congregationin your Congregation

Based on a presentation byBased on a presentation byStewardship and Financial Development Stewardship and Financial Development

CommitteeCommitteeAnglican Diocese of NiagaraAnglican Diocese of Niagara

The Reverend David M. PontingThe Reverend David M. PontingUsed by PermissionUsed by Permission

What is Narrative What is Narrative Budgeting? Budgeting? • It is the sacred story of the congregation’s It is the sacred story of the congregation’s

ministry ministry

• One of the most important ways we can One of the most important ways we can effect on-going stewardship educationeffect on-going stewardship education

• Narrative Budgeting is an essential Narrative Budgeting is an essential element in educating your congregation element in educating your congregation about how their money is being utilized to about how their money is being utilized to support the ministry of the congregationsupport the ministry of the congregation

An important insight is the An important insight is the backbone of Narrative backbone of Narrative

Budgeting… Budgeting…

Donors don’t give their Donors don’t give their money money TOTO the church… the church…

……they give they give THROUGHTHROUGH the the church to touch the lives of church to touch the lives of

other peopleother people

Donors give generously when Donors give generously when they feel their money is they feel their money is

having an impacthaving an impact

Sacred story… Sacred story…

• Much of Scripture is the sacred story of God’s Much of Scripture is the sacred story of God’s care for the people of God. ie. Exodus 16 and care for the people of God. ie. Exodus 16 and Manna from heaven.Manna from heaven.

• Just as individuals have sacred stories of God’s Just as individuals have sacred stories of God’s providential care for them…providential care for them…

• ……a narrative budget is the sacred story of a narrative budget is the sacred story of your congregation’s ministry and how your your congregation’s ministry and how your members are giving through their members are giving through their congregation to touch the lives of other peoplecongregation to touch the lives of other people

We have a theological We have a theological starting point… starting point… • ……and that starting point is that we and that starting point is that we

are NOT a secular institution.are NOT a secular institution.

• Our faith calls us to view the Our faith calls us to view the deployment of money much deployment of money much differently than secular institutionsdifferently than secular institutions

We must overcome years of We must overcome years of faulty theologyfaulty theology• ……and begin to view money from the and begin to view money from the

perspective of a faith community perspective of a faith community rather than a secular perspectiverather than a secular perspective

• This has a serious implication…This has a serious implication…

We need a whole new We need a whole new way of thinking about way of thinking about the line item budget in the line item budget in the local congregation!!the local congregation!!

A new way of thinkingA new way of thinking

•Line item budgets are an Line item budgets are an accountingaccounting tool tool

•Narrative budgets are an Narrative budgets are an educationaleducational and and visioningvisioning tool tool

•We need both but we must be more We need both but we must be more intentional in how we use bothintentional in how we use both

Line item budgets have Line item budgets have limitationslimitations• They do not show how money is They do not show how money is

being invested in ministrybeing invested in ministry

• They do not show how volunteer time They do not show how volunteer time and talent are impacting and talent are impacting congregational lifecongregational life

• Worst of all – they do not inspire!Worst of all – they do not inspire!

The Narrative BudgetThe Narrative Budget

• Clearly shows how money is being Clearly shows how money is being invested in the various components of invested in the various components of congregational lifecongregational life

• Helps donors to re-frame what the Helps donors to re-frame what the congregation is all aboutcongregation is all about

• Inspires donors and helps them see their Inspires donors and helps them see their donations are really making a differencedonations are really making a difference

• Is a proven tool for increasing financial Is a proven tool for increasing financial commitment to the ministry of the commitment to the ministry of the congregationcongregation

The Narrative BudgetThe Narrative Budget

• Recognizes that members are not Recognizes that members are not inspired at the prospect of funding inspired at the prospect of funding administrative costs, postage, heat, administrative costs, postage, heat, water, cleaning supplies, water, cleaning supplies, photocopying, etc.photocopying, etc.

• And helps donors see their And helps donors see their investment in the ministry of the investment in the ministry of the congregation in a different light.congregation in a different light.

The Narrative BudgetThe Narrative Budget

So how does Narrative So how does Narrative Budgeting work?Budgeting work?

Each congregation has Each congregation has several key components of several key components of

ministry…ministry…Your congregation’s ministry Your congregation’s ministry might easily be segmented into might easily be segmented into these six components:these six components:• Pastoral CarePastoral Care• Christian EducationChristian Education• WorshipWorship• Evangelism and HospitalityEvangelism and Hospitality• OutreachOutreach• FellowshipFellowship

All Expenditures can be All Expenditures can be assigned to one of these six assigned to one of these six

areas!areas!

•Pastoral CarePastoral Care•Christian EducationChristian Education• WorshipWorship•Evangelism and HospitalityEvangelism and Hospitality•OutreachOutreach•FellowshipFellowship

Experience shows Six Experience shows Six Categories seems to be Categories seems to be

OptimumOptimum

This means you will have to make some This means you will have to make some decisions about what categories are right decisions about what categories are right for your congregation.for your congregation.•Some congregations like a youth Some congregations like a youth ministry category. It may be better ministry category. It may be better to fit both Youth Ministry and to fit both Youth Ministry and Stewardship Education into the Stewardship Education into the ‘Christian Education’ segment‘Christian Education’ segment•However, you could put Youth However, you could put Youth Ministry in the ‘Outreach’ or Ministry in the ‘Outreach’ or ‘Evangelism’ categories if that makes ‘Evangelism’ categories if that makes more sense for your congregation.more sense for your congregation.

Notice what categories are Notice what categories are NOT included in a NOT included in a Narrative BudgetNarrative Budget

•Pastoral CarePastoral Care•Christian EducationChristian Education• WorshipWorship•Evangelism and HospitalityEvangelism and Hospitality•OutreachOutreach•FellowshipFellowship

Do you see Do you see ADMINISTRATIONADMINISTRATION or or SALARIESSALARIES categories on this list?? categories on this list??

If you use ADMINISTRATION or If you use ADMINISTRATION or SALARIES as a category in your SALARIES as a category in your Narrative BudgetNarrative Budget

• You will be defeating the entire You will be defeating the entire purpose of Narrative Budgeting!!!purpose of Narrative Budgeting!!!

• Please - Don’t go there!Please - Don’t go there!

A small team can put A small team can put together your Narrative together your Narrative BudgetBudget• Start by getting your full time staff to track Start by getting your full time staff to track

how they spend their time for a month. They how they spend their time for a month. They can also review their day planners for the can also review their day planners for the previous monthprevious month

• Allocate their time among the six areas of Allocate their time among the six areas of ministryministry

• Treat that as directional for how other Treat that as directional for how other expenditures in the line item budget should expenditures in the line item budget should be allocated among the six areas of ministrybe allocated among the six areas of ministry

• Some line items in your budget will be easy to Some line items in your budget will be easy to allocate (Sunday school supplies to Christian allocate (Sunday school supplies to Christian education for example)education for example)

So after a month of diarizing So after a month of diarizing by the full time staff you will by the full time staff you will have an allocation formulahave an allocation formula• For example the Pastor might spend For example the Pastor might spend

15% of his/her time on Christian 15% of his/her time on Christian Education; 10% on Outreach; 30% on Education; 10% on Outreach; 30% on Worship and Worship preparation; 10% Worship and Worship preparation; 10% on In-reach and Fellowship; and 15% on In-reach and Fellowship; and 15% on Evangelism and Hospitality and the on Evangelism and Hospitality and the remaining 20% on Pastoral Careremaining 20% on Pastoral Care

• We then take this formula and use it as We then take this formula and use it as a blueprint for line items that are a blueprint for line items that are difficult to allocatedifficult to allocate

Don’t get caught in a trapDon’t get caught in a trap

• Many congregations implementing Narrative Many congregations implementing Narrative Budgeting for the first time miss a big point – Budgeting for the first time miss a big point – they get too caught up on delivering accuracy they get too caught up on delivering accuracy and don’t give themselves permission to treat and don’t give themselves permission to treat the Narrative Budget as directional.the Narrative Budget as directional.

• Its not that we deliberately try to be inaccurate. Its not that we deliberately try to be inaccurate. We try to be as accurate as possible but we We try to be as accurate as possible but we also recognize that, as an educational tool, also recognize that, as an educational tool, helping reframe minds and getting donors to helping reframe minds and getting donors to think about how their donation is used is more think about how their donation is used is more important than accuracyimportant than accuracy

Here’s what you will have Here’s what you will have when you are done your first when you are done your first

Narrative Budget…Narrative Budget…

Sample line items in a parish Sample line items in a parish budget…budget…

PROPERTY ActualPUC (Light, Heat & Water) 7,983.00$ Telephone 821.00$ Insurance 1,620.00$ Maintenance & Supplies 6,854.00$

……are allocated via the six are allocated via the six categories of ministrycategories of ministry

Actual Outreach WorshipPROPERTYPUC (Light, Heat, & Water) 7,983$ 2,794$ 798$ Telephone 821$ 164$ 164$ Insurance 1,620$ 567$ 162$ Maintenance & Supplies 6,854$ 2,399$ 685$

These calculations are fed into a These calculations are fed into a software spreadsheet to produce the software spreadsheet to produce the following pie chart:following pie chart:

St. Paul's Investment in Ministries in 2004

$47,673

$18,415$21,078

$19,506

$11,869

$23,412Outreach

Christian Educ.

Music & Worship

Pastoral Care

Evangelism

Parish Life

The software also permits the budget to be The software also permits the budget to be expressed in percentages:expressed in percentages:

St. Paul's Investment in Ministries in 2004

Outreach34%

Christian Educ.13%

Music & Worship

15%

Pastoral Care14%

Evangelism8%

Parish Life16%Outreach

Christian Educ.

Music & Worship

Pastoral Care

Evangelism

Parish Life

Or the software lets you look at Or the software lets you look at individual slices of the pie…individual slices of the pie…

Our Investment in Outreach in 2004

Outreach34%

Other Ministries

66%

The net takeaway we want The net takeaway we want donors to have is this:donors to have is this:

• 14 cents of every dollar I give goes 14 cents of every dollar I give goes to Pastoral Careto Pastoral Care

• 34 cents of every dollar I give goes 34 cents of every dollar I give goes to Outreachto Outreach

• etc.etc.

We tell the story of the We tell the story of the individual slices of the individual slices of the

congregation ministry piecongregation ministry pie

• There is a narrative for Outreach, a There is a narrative for Outreach, a narrative for Evangelism, a narrative narrative for Evangelism, a narrative for Pastoral Care, etc.for Pastoral Care, etc.

•We funnel the story from the macro We funnel the story from the macro story to the micro storystory to the micro story

The Pastoral Care narrative might look The Pastoral Care narrative might look something like this:something like this:

• The ministry of Pastoral Care at St. Paul’s The ministry of Pastoral Care at St. Paul’s involves the following services:involves the following services:

– taking of home communion to three local taking of home communion to three local nursing homes each month nursing homes each month

– on call at two local funeral homes and on call at two local funeral homes and follow up with the mourners from 30 follow up with the mourners from 30 funerals in 2003funerals in 2003

– frequent visiting at three local hospitals frequent visiting at three local hospitals to care for parishioners recovering from to care for parishioners recovering from illness or surgeryillness or surgery

More pastoral care ministriesMore pastoral care ministries

• counselling services to couples and counselling services to couples and individuals in marital crisisindividuals in marital crisis

• care of students in crisis due to care of students in crisis due to stress-related pressures of schoolstress-related pressures of school

• self help group set up to care for self help group set up to care for unemployed in the areaunemployed in the area

• bereaved families support groupbereaved families support group• etc.etc.

We tell the stories of the real We tell the stories of the real people touched by our ministrypeople touched by our ministry

• Tell a few stories for each category of Tell a few stories for each category of ministryministry

• Donors begin to get a better sense of Donors begin to get a better sense of the impact the ministry of the parish the impact the ministry of the parish is having on peoples’ livesis having on peoples’ lives

• Experience shows they become Experience shows they become inspired and take a much greater inspired and take a much greater ownership of the many ministries of ownership of the many ministries of the parishthe parish

There are many ways we can There are many ways we can use to get the story outuse to get the story out

• Consistory reportsConsistory reports• Church newsletterChurch newsletter• Bulletin insertsBulletin inserts• Church websiteChurch website• Fall Stewardship mailingsFall Stewardship mailings• Narrative Budgeting bookletsNarrative Budgeting booklets• Personal contactPersonal contact• Include in intercessory prayersInclude in intercessory prayers

Use Sunday worship to tell the Use Sunday worship to tell the sacred storiessacred stories• Put a bulletin insert out each week for six Put a bulletin insert out each week for six

weeks highlighting a different category of weeks highlighting a different category of ministryministry

• Pray for that ministryPray for that ministry

• Tell a specific story of a person being Tell a specific story of a person being touched by that ministry touched by that ministry

Adding Time and TalentAdding Time and Talent

• You can do special charts that You can do special charts that illustrate volunteer hours against the illustrate volunteer hours against the six categories of ministrysix categories of ministry

• Parishioners get a sense of how vital Parishioners get a sense of how vital and vibrant the local parish is when and vibrant the local parish is when looked at in the context of volunteer looked at in the context of volunteer timetime

• This also demonstrates how members This also demonstrates how members are providing assistance in ways that are providing assistance in ways that may be of interest to other members.may be of interest to other members.

Let’s look at one aspect of Let’s look at one aspect of Volunteer timeVolunteer time

• Sunday Morning WorshipSunday Morning Worship

– Altar guild – two people X 2 hours= 4 hoursAltar guild – two people X 2 hours= 4 hours– Choir – ten member X 2 hours of worship Choir – ten member X 2 hours of worship

and two hours of practice time = 40 hoursand two hours of practice time = 40 hours– Nursery school volunteers, lay readers, Nursery school volunteers, lay readers,

liturgist, 10 X 1.5 hours = 15 hoursliturgist, 10 X 1.5 hours = 15 hours– Almost 70 hours of volunteer time in one Almost 70 hours of volunteer time in one

week X 44 weeks =3,080 hours of volunteer week X 44 weeks =3,080 hours of volunteer time in Sunday morning worship alone time in Sunday morning worship alone

In an average size In an average size congregationcongregation

When you factor in all ministries, we When you factor in all ministries, we estimate that 10,000 – 15,000 estimate that 10,000 – 15,000 volunteer hours per year are volunteer hours per year are

accumulatedaccumulated

That’s a significant That’s a significant impact on any local impact on any local

community!!community!!

Narrative Budgeting is an Narrative Budgeting is an Evolving ProcessEvolving Process

• Each year you will get better at it as Each year you will get better at it as you add stories and volunteer time you add stories and volunteer time and talentand talent

• It improves with each cycleIt improves with each cycle

• People will begin to think of the People will begin to think of the funding of the ministry of the parish in funding of the ministry of the parish in a new waya new way

A Word about Annual A Word about Annual MeetingsMeetings

We must change how we view money We must change how we view money and ministryand ministry

Long before the next year’s annual Long before the next year’s annual meeting, you will have begun a job of meeting, you will have begun a job of education and awareness around the education and awareness around the

Narrative BudgetNarrative Budget

It is strongly recommended…It is strongly recommended…

……that you leave the line item that you leave the line item budget in the parish office at budget in the parish office at your annual congregational your annual congregational business meeting.business meeting.

Take only the Narrative Budget Take only the Narrative Budget to your annual meetingto your annual meeting

You can still make the line You can still make the line item budget availableitem budget available

……tell the left brain accountant types tell the left brain accountant types in the congregation that there are in the congregation that there are five copies of the completed line item five copies of the completed line item budget available in the parish office budget available in the parish office to be signed out by anyone to be signed out by anyone interested. You are not interested. You are not compromising transparency.compromising transparency.

As a faith-based organization be As a faith-based organization be determined in your desire to talk determined in your desire to talk about money and ministry in a new about money and ministry in a new way. Don’t vacillate and fall back on way. Don’t vacillate and fall back on the line item budget for decision-the line item budget for decision-making.making.

Make a leadership decision to leave Make a leadership decision to leave the line item budget out of your next the line item budget out of your next

Annual MeetingAnnual Meeting

……Then have the church council Then have the church council affirm the leaders’ decision.affirm the leaders’ decision.

That way you can tell the That way you can tell the members at the annual meeting members at the annual meeting the consistory voted in favor of the consistory voted in favor of talking only about the Narrative talking only about the Narrative Budget at the annual meeting Budget at the annual meeting and the leaders aren’t standing and the leaders aren’t standing alone in making this decisionalone in making this decision

Maybe in your congregation…Maybe in your congregation…

……The annual meeting will no The annual meeting will no longer be viewed as the longer be viewed as the annual BUSINESS meeting of annual BUSINESS meeting of the congregation, but will the congregation, but will becomebecome

THE ANNUAL MISSION AND THE ANNUAL MISSION AND MINISTRY MEETINGMINISTRY MEETING

You may actually find…You may actually find…

……members get excited and members get excited and start looking forward to your start looking forward to your annual meeting!!annual meeting!!

As donors are engaged by As donors are engaged by the efforts we make to show the efforts we make to show

them…them…

……their money is having an their money is having an impact on the lives of people in impact on the lives of people in

needneed

Questions???Questions???