Budgeting, including Narrative Budgets Central Atlantic Conference September 9, 2006 Bob Ziegler

A Quiz 1. Budgets are (select all that apply: A listing of all sources of revenue and all types of expenditures A listing of all sources of revenue and all types of expenditures A way to authorize the expenditure of funds A way to authorize the expenditure of funds A meaningless exercise since who can predict with any certainty the congregations giving and what expenses will be? A meaningless exercise since who can predict with any certainty the congregations giving and what expenses will be?

A Quiz 1. Budgets are (select all that apply: A way to engage the congregation, getting them to understand, identify with and support particular missions A way to engage the congregation, getting them to understand, identify with and support particular missions Something that changes little from year to year – “Use last year and add/cut 5%” Something that changes little from year to year – “Use last year and add/cut 5%” A way to really get committees, councils, consistories, etc. dreaming about what “could be”, if only there were funds to …. A way to really get committees, councils, consistories, etc. dreaming about what “could be”, if only there were funds to ….

A Quiz 1. Budgets are (select all that apply: Something that only a few people in the congregation know about Something that only a few people in the congregation know about

A quiz: 2. Other questions about budgeting Does your congregation have a budget? Does your congregation have a budget? If so, do you find it to be a useful tool, or is it just tradition that one is prepared If so, do you find it to be a useful tool, or is it just tradition that one is prepared

A congregational budget can be: Important in determining whether the programs and missions can be funded Important in determining whether the programs and missions can be funded A useful tool to communicate the mission and vision of the congregation A useful tool to communicate the mission and vision of the congregation

Types of budgets Line item Line item Narrative Narrative Hybrid Hybrid

Line item budgets Receipts Envelopes$100,000$110,000$110,000$115,000 Plate $3,000 $3,000 $3,400 $3,400 $3,500 $3,500 Etc

Line item budgets: Are traditional Are traditional Fail to convey much excitement Fail to convey much excitement Fail to provide a sense of the mission behind the numbers Fail to provide a sense of the mission behind the numbers Still need to be created, whether or not a narrative budget is being created Still need to be created, whether or not a narrative budget is being created

Creating a line item budget Obtain as much involvement of the congregational leaders as possible – it should not be viewed as “the budget committee’s budget” Obtain as much involvement of the congregational leaders as possible – it should not be viewed as “the budget committee’s budget” Include a level of detail that will allow for measuring actual against budget – useful for building next year’s budget Include a level of detail that will allow for measuring actual against budget – useful for building next year’s budget

Creating a line item budget Consider two budgets – one that can be a challenge budget that would include the congregation’s dreams, one that is more bare bones Consider two budgets – one that can be a challenge budget that would include the congregation’s dreams, one that is more bare bones Don’t finalize the budget until there is an indication of the revenue that will be collected Don’t finalize the budget until there is an indication of the revenue that will be collected

Implementing Narrative Budgeting in your Congregation Based on a presentation by Stewardship and Financial Development Committee Anglican Diocese of Niagara The Reverend David M. Ponting Used by Permission

What is Narrative Budgeting? It is the sacred story of the congregation’s ministry It is the sacred story of the congregation’s ministry One of the most important ways we can effect on-going stewardship education One of the most important ways we can effect on-going stewardship education Narrative Budgeting is an essential element in educating your congregation about how their money is being utilized to support the ministry of the congregation Narrative Budgeting is an essential element in educating your congregation about how their money is being utilized to support the ministry of the congregation

An important insight is the backbone of Narrative Budgeting… Donors don’t give their money TO the church… …they give THROUGH the church to touch the lives of other people Donors give generously when they feel their money is having an impact

Sacred story… Much of Scripture is the sacred story of God’s care for the people of God. ie. Exodus 16 and Manna from heaven. Much of Scripture is the sacred story of God’s care for the people of God. ie. Exodus 16 and Manna from heaven. Just as individuals have sacred stories of God’s providential care for them… Just as individuals have sacred stories of God’s providential care for them… …a narrative budget is the sacred story of your congregation’s ministry and how your members are giving through their congregation to touch the lives of other people …a narrative budget is the sacred story of your congregation’s ministry and how your members are giving through their congregation to touch the lives of other people

We have a theological starting point… …and that starting point is that we are NOT a secular institution. …and that starting point is that we are NOT a secular institution. Our faith calls us to view the deployment of money much differently than secular institutions Our faith calls us to view the deployment of money much differently than secular institutions

We must overcome years of faulty theology …and begin to view money from the perspective of a faith community rather than a secular perspective …and begin to view money from the perspective of a faith community rather than a secular perspective This has a serious implication… This has a serious implication…

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

A new way of thinking Line item budgets are an accounting tool Line item budgets are an accounting tool Narrative budgets are an educational and visioning tool Narrative budgets are an educational and visioning tool We need both but we must be more intentional in how we use both We need both but we must be more intentional in how we use both

Line item budgets have limitations They do not show how money is being invested in ministry They do not show how money is being invested in ministry They do not show how volunteer time and talent are impacting congregational life They do not show how volunteer time and talent are impacting congregational life Worst of all – they do not inspire! Worst of all – they do not inspire!

The Narrative Budget Clearly shows how money is being invested in the various components of congregational life Clearly shows how money is being invested in the various components of congregational life Helps donors to re-frame what the congregation is all about Helps donors to re-frame what the congregation is all about Inspires donors and helps them see their donations are really making a difference Inspires donors and helps them see their donations are really making a difference Is a proven tool for increasing financial commitment to the ministry of the congregation Is a proven tool for increasing financial commitment to the ministry of the congregation

The Narrative Budget Recognizes that members are not inspired at the prospect of funding administrative costs, postage, heat, water, cleaning supplies, photocopying, etc. Recognizes that members are not inspired at the prospect of funding administrative costs, postage, heat, water, cleaning supplies, photocopying, etc. And helps donors see their investment in the ministry of the congregation in a different light. And helps donors see their investment in the ministry of the congregation in a different light.

The Narrative Budget So how does Narrative Budgeting work?

Each congregation has several key components of ministry… Your congregation’s ministry might easily be segmented into these six components: Pastoral Care Pastoral Care Christian Education Christian Education Worship Worship Evangelism and Hospitality Evangelism and Hospitality Outreach Outreach Fellowship Fellowship

All Expenditures can be assigned to one of these six areas! Pastoral Care Pastoral Care Christian Education Christian Education Worship Worship Evangelism and Hospitality Evangelism and Hospitality Outreach Outreach Fellowship Fellowship

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

Notice what categories are NOT included in a Narrative Budget Pastoral Care Pastoral Care Christian Education Christian Education Worship Worship Evangelism and Hospitality Evangelism and Hospitality Outreach Outreach Fellowship Fellowship Do you see ADMINISTRATION or SALARIES categories on this list??

If you use ADMINISTRATION or SALARIES as a category in your Narrative Budget You will be defeating the entire purpose of Narrative Budgeting!!! You will be defeating the entire purpose of Narrative Budgeting!!! Please - Don’t go there! Please - Don’t go there!

A small team can put together your Narrative Budget Start by getting your full time staff to track how they spend their time for a month. They can also review their day planners for the previous month Start by getting your full time staff to track how they spend their time for a month. They can also review their day planners for the previous month Allocate their time among the six areas of ministry Allocate their time among the six areas of ministry Treat that as directional for how other expenditures in the line item budget should be allocated among the six areas of ministry Treat that as directional for how other expenditures in the line item budget should be allocated among the six areas of ministry Some line items in your budget will be easy to allocate (Sunday school supplies to Christian education for example) Some line items in your budget will be easy to allocate (Sunday school supplies to Christian education for example)

So after a month of diarizing by the full time staff you will have an allocation formula For example the Pastor might spend 15% of his/her time on Christian Education; 10% on Outreach; 30% on Worship and Worship preparation; 10% on In-reach and Fellowship; and 15% on Evangelism and Hospitality and the remaining 20% on Pastoral Care For example the Pastor might spend 15% of his/her time on Christian Education; 10% on Outreach; 30% on Worship and Worship preparation; 10% on In-reach and Fellowship; and 15% on Evangelism and Hospitality and the remaining 20% on Pastoral Care We then take this formula and use it as a blueprint for line items that are difficult to allocate We then take this formula and use it as a blueprint for line items that are difficult to allocate

Don’t get caught in a trap Many congregations implementing Narrative Budgeting for the first time miss a big point – they get too caught up on delivering accuracy and don’t give themselves permission to treat the Narrative Budget as directional. Many congregations implementing Narrative Budgeting for the first time miss a big point – they get too caught up on delivering accuracy and don’t give themselves permission to treat the Narrative Budget as directional. Its not that we deliberately try to be inaccurate. We try to be as accurate as possible but we also recognize that, as an educational tool, helping reframe minds and getting donors to think about how their donation is used is more important than accuracy Its not that we deliberately try to be inaccurate. We try to be as accurate as possible but we also recognize that, as an educational tool, helping reframe minds and getting donors to think about how their donation is used is more important than accuracy

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

Sample line items in a parish budget…

…are allocated via the six categories of ministry

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

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

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

The net takeaway we want donors to have is this: 14 cents of every dollar I give goes to Pastoral Care 14 cents of every dollar I give goes to Pastoral Care 34 cents of every dollar I give goes to Outreach 34 cents of every dollar I give goes to Outreach etc. etc.

We tell the story of the individual slices of the congregation ministry pie There is a narrative for Outreach, a narrative for Evangelism, a narrative for Pastoral Care, etc. There is a narrative for Outreach, a narrative for Evangelism, a narrative for Pastoral Care, etc. We funnel the story from the macro story to the micro story We funnel the story from the macro story to the micro story

The Pastoral Care narrative might look something like this: The ministry of Pastoral Care at St. Paul’s involves the following services: The ministry of Pastoral Care at St. Paul’s involves the following services: –taking of home communion to three local nursing homes each month – on call at two local funeral homes and follow up with the mourners from 30 funerals in 2003 –frequent visiting at three local hospitals to care for parishioners recovering from illness or surgery

More pastoral care ministries counselling services to couples and individuals in marital crisis counselling services to couples and individuals in marital crisis care of students in crisis due to stress- related pressures of school care of students in crisis due to stress- related pressures of school self help group set up to care for unemployed in the area self help group set up to care for unemployed in the area bereaved families support group bereaved families support group etc. etc.

We tell the stories of the real people touched by our ministry Tell a few stories for each category of ministry Tell a few stories for each category of ministry Donors begin to get a better sense of the impact the ministry of the parish is having on peoples’ lives Donors begin to get a better sense of the impact the ministry of the parish is having on peoples’ lives Experience shows they become inspired and take a much greater ownership of the many ministries of the parish Experience shows they become inspired and take a much greater ownership of the many ministries of the parish

There are many ways we can use to get the story out Consistory reports Consistory reports Church newsletter Church newsletter Bulletin inserts Bulletin inserts Church website Church website Fall Stewardship mailings Fall Stewardship mailings Narrative Budgeting booklets Narrative Budgeting booklets Personal contact Personal contact Include in intercessory prayers Include in intercessory prayers

Use Sunday worship to tell the sacred stories Put a bulletin insert out each week for six weeks highlighting a different category of ministry Put a bulletin insert out each week for six weeks highlighting a different category of ministry Pray for that ministry Pray for that ministry Tell a specific story of a person being touched by that ministry Tell a specific story of a person being touched by that ministry

Adding Time and Talent You can do special charts that illustrate volunteer hours against the six categories of ministry You can do special charts that illustrate volunteer hours against the six categories of ministry Parishioners get a sense of how vital and vibrant the local parish is when looked at in the context of volunteer time Parishioners get a sense of how vital and vibrant the local parish is when looked at in the context of volunteer time This also demonstrates how members are providing assistance in ways that may be of interest to other members. This also demonstrates how members are providing assistance in ways that may be of interest to other members.

Let’s look at one aspect of Volunteer time Sunday Morning Worship Sunday Morning Worship –Altar guild – two people X 2 hours= 4 hours –Choir – ten member X 2 hours of worship and two hours of practice time = 40 hours –Nursery school volunteers, lay readers, liturgist, 10 X 1.5 hours = 15 hours –Almost 70 hours of volunteer time in one week X 44 weeks =3,080 hours of volunteer time in Sunday morning worship alone

In an average size congregation When you factor in all ministries, we estimate that 10,000 – 15,000 volunteer hours per year are accumulated That’s a significant impact on any local community!!

Narrative Budgeting is an Evolving Process Each year you will get better at it as you add stories and volunteer time and talent Each year you will get better at it as you add stories and volunteer time and talent It improves with each cycle It improves with each cycle People will begin to think of the funding of the ministry of the parish in a new way People will begin to think of the funding of the ministry of the parish in a new way

A Word about Annual Meetings We must change how we view money and ministry Long before the next year’s annual meeting, you will have begun a job of education and awareness around the Narrative Budget

It is strongly recommended… …that you leave the line item budget in the parish office at your annual congregational business meeting. Take only the Narrative Budget to your annual meeting

You can still make the line item budget available …tell the left brain accountant types in the congregation that there are five copies of the completed line item budget available in the parish office to be signed out by anyone interested. You are not compromising transparency. As a faith-based organization be determined in your desire to talk about money and ministry in a new way. Don’t vacillate and fall back on the line item budget for decision-making.

Make a leadership decision to leave the line item budget out of your next Annual Meeting …Then have the church council affirm the leaders’ decision. That way you can tell the members at the annual meeting the consistory voted in favor of talking only about the Narrative Budget at the annual meeting and the leaders aren’t standing alone in making this decision

Maybe in your congregation… …The annual meeting will no longer be viewed as the annual BUSINESS meeting of the congregation, but will become THE ANNUAL MISSION AND MINISTRY MEETING

You may actually find… …members get excited and start looking forward to your annual meeting!!

As donors are engaged by the efforts we make to show them… …their money is having an impact on the lives of people in need

Questions???