Designated Funds
- Definition: The major ministry areas should have at least half their annual budget in a fund designated for their ministry. These major ministry areas are: Worship & Music, Care & Fellowship, Discipleship & Education, and Missions & Outreach.
- Results:
- Minimum: At least one-fourth of the annual budget for the major ministry areas
- Maximum: No more than the entire annual budget
- Consequences:
- Ministries should and must rely on their budget to accomplish the main tasks entrusted to them. If a church isn’t budgeting appropriately, then the church is setting the minister up for failure.
- Ministries should also have a designated fund from which they can use occasional funds to do things they didn’t budget for because they weren’t aware of these opportunities when the budget was requested.
- Ministers must never do aggressive fundraising for their designated funds because that can undermine gifts to the budget.
Now What? So What?
- Compare your church’s financial ratios to the optimum range for each ratio.
- Develop a 2-3 year plan to bring your ratios in line with best financial practices.
Lead On!