When we first started New Day, among other things, I was contemplating this question “How will we spend the money that God entrusts us with?” In the realm of personal finance I knew of recommended percentages for the various categories within your budget, but I knew of no such resource for church finance until I came across a book called Money Matters in Church: A Practical Guide for Leaders by Aubrey Malphurs and Steve Stroope. In this book the authors give you four main categories of spending as well as recommended percentages for each category. Here’s the categories:
1. Personnel should be between 45-55% depending on the size of your church. This includes staff, salaries and benefits. The smaller you are the more you will usually have to spend on personnel. The larger you are the less you can spend. I know of some very large churches that have been able to reduce the amount spent in personnel to around 35%. A church will really have to tap into the power of volunteers to get their percentage that low.
2. Facilities should be between 15-20%. This includes rent or your mortgage and utilities if you have your own building. As a church that is portable at the time of this writing we have to rent office space from our landlord in West Springfield, adult meeting space and on-site storage from the Basketball Hall of Fame as well as kids meeting space from Max’s Tavern in Springfield, and an additional storage unit from The Store House in Agawam. All these expenses come out of facilities.
3. Missions should be 10%. At New Day we use this 10% for what we refer to as 1) local missions, 2) foreign missions and 3) Christian higher education.
4. Programming should be between 15-20%. This includes everything that does not fall under Personnel, Facilities or Missions. This typically includes kids ministry, youth ministry, your small groups ministry, your worship arts ministry as well as all the expenses associated with each department.
If you want to know why I have found these four allocations and recommended percentages absolutely invaluable, click here.