1.5% Rule for Building Maintenance Budgets

Maintaining church buildings is expensive. And every year presents known and unknown expenses. Here’s a rule of thumb for determining how much to budget: put into the annual budget 1.5% of the replacement value of your buildings. If your buildings are valued at $5 million, your budget should be $75,000; if $10 million, then $150,000. That amount allows you to keep up with the ever-expanding needs of a church building and maybe tackle some long-term projects in phases.


This is in addition to the cost of labor, utilities, insurance, routine contracts (like fire and burglar alarm monitoring or pest control), or other building expenses within your control. This 1.5% is for those building maintenance items which pop up from year to year (sometimes from day-to-day) and for on-going minor building improvements (i.e., replacing ceiling tiles, painting rooms, small carpet or limited asbestos abatement projects, etc.).


Here’s a comparison: if your home is valued at $200,000 then you should set aside $3,000 each year (1.5% of $200K). Some years you’ll only replace a carpet or a toilet but every so often you’ll replace the roof or the A/C unit. Over time, you’ll spend $3,000 each year on your home. The same is true for church buildings. To budget less than 1.5% means an increasing list of deferred maintenance items which always costs more than routine maintenance.


Use this blog to educate your Stewardship or Finance Committee/Team about how much they should budget for the building. Though they may think 1.5% is too high, when you apply this to their own home, they’ll immediately get the analogy. Finding that money from one year to the next may be tough, but over a period of a few years the Finance Committee can steadily increase the maintenance budget till it is the necessary 1.5%.


Lead On!