Building a 2021 Budget
December, for many congregations, is the month budget building takes place. It always seems to be a mix of science, engineering, and quantum physics combined with prognostication, finger crossing, a little magic, and of course faith. In the end, after some hand wringing and a bit of calculator smoke, financial teams arrive at a forecast for the coming year. When the balance is struck, there is fiscal responsibility and creative imagination in perfect tension. When the scales tip too far one way or the other, there is either a mindset of scarcity that sees only limitations; or pie-in-sky wishful thinking that can have devastating consequences as the year progresses and hoped for resources never materialize.
Add a global pandemic into the formula and this process seems to go from hard to impossible as we look to 2021. To be honest, none of us can no more predict what December of 2021 is going to look like than we can guess tonight’s winning lottery numbers. So, should we just abandon the whole budgeting thing altogether, placing it on the trash-heap of everything else that used to be “normal” before 2020; or should we plod away throwing darts at a target shrouded in the darkness of the unknown?
To do it the way we have always done it before might leave us under-estimating the generosity and commitment of our people and cutting important ministries in the wake of our low expectations. It is also possible that we might not guess right on the health and potential strength of the economy and “overshoot” our income targets. What should we do to be both responsible and faithful?
The good news is that it is okay to say we just can’t accurately forecast too deeply into next year. The better news is that we don’t have to. Yes, it is nice to wrap things up in neat, traditional packages of 12 months, 52 weeks, and 365 days – but it is not required. Consider trying to look only 3 months ahead instead of 12. Create a “rolling budget” for 2021 that will be adjusted for the next quarter based on the previous quarter. Use the best skills and tools available to forecast by looking at a 3-5 year history of year-to-date “real” numbers and create an average for each month of the coming quarter. Then, apply the current COVID context by adjusting those numbers by the percentage of gain or loss at year-end 2020. Use your 2021 pledge cards (if you do estimates of giving) to forecast the “unpledged” income. If pledges went up, calculate that percentage and adjust accordingly. Do the same if 2021 pledges were flat or showed an over-all decrease. Also, be sure to adjust for deaths and attrition – numbers your financial secretary or bookkeeper should be able to share with you. It is still a “best guess”, but that is true in any year we build a budget and include an estimate of anticipated income.
For those who are struggling with the loss of rental income and other fees, don’t be afraid to reach out to those who would use your space if Covid-19 restrictions were not in place. If they pay for the space, talk to them about the reality of where you are financially and how you both want to a have a space for them when they return. Can they make a contribution as a sign of partnership or gratitude for the reduced cost they normally pay for this space? Perhaps you can work out a discount for “paying in advance” that would secure some income for now, even if at a reduced rate for later.
For those who use the space for free, ask for a donation as a sign of mutual support, explaining your current needs and your desire for things to return to “normal” as soon as possible. The worst they can say is no. When we did a building campaign years ago in a church I pastored, we asked both renters who paid for space and ministry partners who had space for free to consider making a pledge to help fund the program. Many did, and while not large in dollars, it expressed a relationship and sense of partnership that was in many ways of greater value than the dollars themselves. Your relationships here may payoff in generous responses.
Finally, are there community foundations or key philanthropists in your city/county who you know have a passion or strong interest in the services you provide the community? They may be willing to assist you financially in order to keep those ministries active and supporting the people they care about. An inquiry may result in a gift, or a lead to pursue that has the potential of support. You have to take initiative and do some leg work, but there are dividends for this kind of investment.
All of this depends on two important factors. First, the ability to make a case for your ministry and mission that inspires and is compelling; and second, the quality of your relationships. If your renters are just that – a transactional relationship, then don’t expect a high level of generosity. If, on the other hand, you have fostered a sense of partnership and mutual investment, you may be pleasantly surprised.
The reality is that “normal” as we may have defined it in February of 2020 is not coming back. What matters now is how we adapt to the disruption and embrace the opportunity that this change means for ministry going forward. Be willing to fail – even spectacularly so – in the effort to find what works. We have each other to learn from and God will go with us into the future wherever it leads.