The Church Budget and General Fund: A Guide

the importance of church general funding and budgeting

Church Growth Services has been exclusively helping churches develop generosity for about 60 years. With experience in business development and 25 years of pastoral ministry, Mike Stadelmayer, VP of Client Relations with Church Growth Services, has written the following guide for a church budget and general fund.

The Truth: Ministry Costs Money

The general fund is at the heart of the local church ministry. However, for many church leaders, it is a nuisance or necessary evil. It’s often a nuisance because leaders want to focus on ministry and not on the church budget.

But, let’s be honest: ministry costs money. Most churches are led by paid pastors and staff who make the day-to-day ministries happen. This means the church has to have the financial means to support those staff positions and ministries. 

While a church budget should fund staff payroll, facilities, etc., it should, more importantly, reflect the vision and ministry of the church. The general fund should be a Ministry Action Plan (MAP), which mirrors the values and vision of the church. Staff, ministries, and facilities are all affected by the money available in the general fund and are made possible by the generosity of the congregation.  

Yet, the once stable funds used for general ministry are becoming somewhat less stable. The charitable giving trends from boomers to millennials and Gen X, Gen Z, or even Gen Y are changing. Church attendance is down, and even the most regular attenders are attending less often. The budgeting process that may have been fairly routine, even if it was a pain, has now become more important than ever. 

According to national survey results in April 2020 from State of the Plate, 65% of churches have experienced a downturn in giving. Additionally, 31% of them are down more than 30%. This is a significant decrease in funding and can be stressful on church boards and ministries.  

There are two primary ways of handling a potential church budget shortfall: reduce expenses and/or increase general fund giving. 

Reduce Expenses

Churches across America may need to re-evaluate their budgets to see how to survive the shortage in funding and to respond to new ministry opportunities in their communities. While churches create annual budgets, they aren’t necessarily accustomed to scaling back their budget as that may be requried this season. 

Begin by analyzing your revised income projections, considering the season we are in. Be realistic. Consider your level of cash reserves. How long can you make payroll and meet essential obligations under current giving levels? 

Additionally, consider doing a cash flow analysis. While most church budgets are established for a 12-month period in equal amounts, the reality is your giving and expenses do not flow equally over that time period. Analyze the change in monthly cash flow. Then determine if your cash reserves are adequate to cover any deficit (Note: Expenses like VBS, Summer Camps, Special Events, and Easter promotions often occur annually, but they are not equally distributed throughout the year).

In reviewing your expenses there are four general categories to consider: recurring operational expenses, ministry expenses, staff expenses, zero-based budgeting. Each category should be addressed when going through the process of budget evaluation. 

Recurring Operational Expenses

The primary recurring operational expense is likely your mortgage or rent.  If you are carrying debt on your facilities, you should contact your bank. Interest rates fluctuate, and you may be able to refinance at a lower rate. Do your research so you're familiar with loan options before you talk to your lender: forbearance, deferral, and interest-only payments. In addition, you should review all your merchant fees, insurance, and recurring subscriptions for services.

Other significant recurring expenses include utility costs ($1-$1.50/SF annually), janitorial expenses, general maintenance, and capital reserve savings. Do not neglect these 4 areas.  If you cut any of these expenses without reducing your facility footprint, you will be setting your church up for serious issues in the future with deferred maintenance.

Ministry Expenses

Consider going through your ministry expenses line item by line item. Freeze all new purchases. One approach that distributes the hardship of reductions across the board is a percentage-based reduction of 5% or 10% across all ministries. This is the easiest but may not be the best approach.

A better strategy may be to trim all non-essential ministry expenses. This exercise is probably overdue anyway. High impact ministries should stay; however, some ineffective ministries may need to be eliminated. What was once non-negotiable is now on the table. Use this opportunity to really prioritize existing ministries and put yourself in a position to consider new ministries that are emerging. 

Staff Expenses

Staff expenses are usually the largest, but most difficult, expenditure to cut.  Start by requesting voluntary pay reductions. Some families may not depend heavily on the income and might value or be willing to take some time off. A second option is across the board percentage pay cuts where all participate in the cuts.

As a last resort, it may be necessary to eliminate some ministry or support positions.  We don’t want to discount the pain and difficulty of such decisions, but sometimes it is the only way that the ministry can continue.   Politicians say, never let a crisis go to waste. God is present in every crisis and responds in love, grace, and compassion. 

Zero Based Budgeting

Go through the entire church budget with a zero-based budgeting approach, which could radically reduce expenses and focus resources on key ministries. While not commonly used, the current shift in our culture along with the potential crisis many churches are facing may create receptivity to this approach. This can also provide an opportunity to better align the budget to new and necessary strategic priorities.

Here is a free e-book on developing a general fund budget for more information.

Increase in General Fund Giving

The second strategy is to increase general fund giving. Below are two primary ways of raising additional funds. 

Discipleship for Generosity

Develop a discipleship process in the area of stewardship. Discipleship is important to the life of the church. Churches want to fulfill the great commission and take seriously Jesus’ command to go and make disciples of all nations. However, if we’re honest, most churches have no comprehensive discipleship process for financial stewardship. If they do anything at all, it may be a sermon or two on tithing and offering a class like Financial Peace University. 

Find Alternative Funding Sources

As the culture shifts and governments get less friendly towards the local church, finding alternative funding sources may become a necessity. For churches to not only survive but thrive in the future, leaders must learn to leverage assets, bless the community, empower entrepreneurs, and create multiple streams of income to effectively fund missions.

God’s church is alive and well and prepared to rise-up during times of crisis and change. As you consider how your church needs to respond during a season of change and transition, be a beacon of calm and peace for people living in anxiety and fear. You don’t have to “go it alone” in making these tough choices. 

Here is a free e-book on generosity discipleship process.

For more information, you can contact Mike at or learn more at