This is the time of year when we strongly recommend that you prepare a budget for next year. Without exception, organizations that have a budget are better off financially and find themselves better able to weather a crisis (ie: 2020’s pandemic) than those who don’t. As a result of better managing their spending, they also typically have more cash reserves.
While many think that a budget will “restrict” them or be used as a way to dictate how money is spent, in reality, it gives you more freedom to make financial decisions and allows you to better follow a plan – your plan – which is based on your priorities.
As our clients have begun to work on their 2021 budget, they have encountered challenges. Usually, you would start by looking at 2020 expenses. However, this year has been anything but normal. Most churches have reduced expenses in many expense categories as a result of not meeting in person, while costs for cleaning, media, IT and benevolence are higher than a normal year. How do we know how to plan for 2021? How do we project donations as we enter a second year of restricted gatherings?
While it may take more time to work through these questions, the effort will be worth it. Just remember to review actual results to the budget each month. When you start to see areas that are not going as planned, you can react and adjust sooner rather than later – and avoid a crisis down the road.