Exposing Hidden Flaws of the “Vision-Based Budget”

Let’s talk about a sure fire way to create financial pressure and underfund ministry. It is the common practice of “Vision-Based Budgeting.” Now, I am a huge advocate of vision clarity. Vision work is absolutely generosity work. But let me expose this common concept of “Vision Based Budgeting” and the hidden flaws associated with it. Most church leaders do not realize their ultimate goals of financial freedom and expanded ministry impact are rarely met when this path is travelled.

What is Vision Based Budgeting? It is a term commonly used to describe the process church leaders undertake which results in a proposed future church budget exceeding previous year’s giving by an uncomfortably large percentage. I have seen this term used to describe a budget that is anywhere from 5% to 20% above previous year’s giving receipts.

What is the decision making process that leads to Vision Based Budgeting? It typically begins with leadership requesting future budget amounts from ministry department directors. Everyone desires more resources for ministry because more fruit is promised when more support is granted. When the church financial leaders gather all the numbers the total is invariably inflated. Now some hard decisions will need to be made. How do we communicate to people we support them, but can’t fund them to the level of expectation without demoralizing them?

What is the result of Vision Based Budgeting? Because it is so difficult to say no to so many good requests we often lead forward with a total ministry budget number that is larger than we hoped. We preach vision trying to get both people and giving pumped up for the journey. The new budget year begins with financial pressure because giving does not immediately increase to the level of expectation. Additionally, ministry directors now have more money to spend, at least according to the budget on paper, which creates a spending spree. Expenses go up while giving stays the same or even declines a little because the first half of the calendar year can be a lower giving season than the second half of the year.

By the time we get to May the leadership team is invoking a few strategies prior to summer spending on camps, mission trips, and VBS. We might break out the tithing message,  construct a Catch Up or I Love My Church Offering to inject some cash flow. If things do not go well, then a spending freeze will be put in place to allow giving to meet the level of expenses. Thus the net effect of Vision Based Budgeting is often two fold: financial pressure and under-funding the ministries we originally intended to overfund.

How do we remove financial pressure and fund ministry successfully? Consider embarking on a brand new budgeting process. We have much training and content about this at Lifeway Generosity. It will take more words than I have remaining in this blog. However, as a starting point why not create one singular ministry goal for the entire team to rally around for the upcoming year prior to budget planning season? This one singular goal will focus ministry leaders as they plan their budget needs. A budget request must align with advancing the goal and contribute to overall church health. The unifying goal will also create a safe filter for financial leaders to guide expenses. Budgets are approved based on the overall achievement of the one unifying goal together. This will produce confidence in your leadership as they make difficult decisions. 

Guess what? If you articulate the singular unifying goal in an inspiring way to your church, matched by a focused spending plan you might just see both volunteering and giving engagement increase. The net effect is focused spending, a unified team, and an inspired church. Unleash giving today!

Some think the next generation is giving less than generations before them. The reality is they are just giving in different ways. Download our free ebook Next Generation Giving is Here.