We give our ministries guidance in their budget and financial planning.
The budgeting process for the churches of North Point Ministries starts in August and concludes in December. As a result of our age and size, we start by evaluating historical income and expenses and then establishing budget parameters for the coming year based on trends and growth at the campus and departmental levels.
We project income for the year using income from the past year(s), and we modify the projection based on whether we’re opening any new facilities.
Salaries and Benefits Budget
After projecting income, we project salary and benefits costs for the upcoming year using assumptions for changes in benefits costs and potential cost of living wage increases.
Programming Expenses Budget
As mentioned above, our current budgeting method is to use historical departmental budgets and actual spending to predict what dollars will be needed in the coming year. Most ministry areas are driven by attendance, so if we think attendance will grow, we’ll allow more budget dollars to be requested for that ministry area. Children’s programming is an example of this because additional supplies, volunteers, and staff may be necessary as the number of children increases.
We always target, or budget for, an overall organizational margin (savings or net income) when creating an annual budget. The margin dollar amount helps guide the overall budget conversation at the organizational level. Having a target margin helps us provide clarity around where we need to be when the budgeting process is finalized. The margin is used for paying down debt, funding capital needs, or funding new initiatives not covered in the operating budget.
Tools That Facilitate the Budgeting Process
At the beginning of the budgeting process, we utilize the collaborative benefits of Google spreadsheets to house spreadsheets containing annual budgets at the campus and departmental levels (one spreadsheet per campus). Once annual departmental budgets have been approved, we use a web-based budgeting tool, written in-house, to give department directors a mechanism to spread their budgets on a monthly and line-item basis. The Finance department prepopulates the budgeting tool based on actual spending in the past 12 months and then makes the tool available to the staff (in case spreads need to be adjusted). After approximately two weeks, we close the tool and use the final spreads to populate our accounting software.
The budgeting process concludes with the approval of our Stewardship Team and the final approval of our Elder Board in December.