How Churches Spend their Money

5 National Insights on Budget Priorities

3
11259

By Brant Henshaw | Treasurer and Director of Administrative Services

Local church volunteers often call and ask how their spending “fits” in with the average church budget. This is a great question that reveals a healthy desire to be good stewards of the gifts we receive.

Christianity Today recently published the results of a survey of 2,200 churches from around the country. They discovered that churches with less than 200 in weekly worship attendance had an average budget of $219,370 with a median of $173,370. For those with 200-499 worshippers, an average budget of $675,290 and a median of $628,720 was reported.

The top five key findings from the survey are as follows:

1. People are by far the largest single expense

On average 47% of a local church budget goes toward paying pastors and staff. In churches with less than 200 people in weekly attendance, this number is slightly lower at 45%. Congregations in the mid-tier of 200-499 spent 48% on personnel. Breaking down this information further reveals that full-time pastors are, by and far, the largest portion accounting for nearly 50% of personnel costs. Within the personnel budget, full-time pastoral expense accounts for:

  • 28% for base salaries
  • 9% for housing allowances
  • 5% for health insurance
  • 2% for pension/retirement
  • 2% for Social Security and Medicare
  • 2% payroll taxes
  • 1% for life and disability insurance

These percentages are consistent across all church sizes.

2. Property Expenses

Property expenditures, which may include mortgage payments or rent, consistently account for 7% of the budget regardless of church size. When utilities (7%), maintenance and janitorial (5%), property/liability insurance (3%) are tallied together, it totals 22%.  Part of what drives these expenses up is the propensity of churches to open their buildings to outside non-profits at little or no cost making their buildings a community focal point.

3. Program Costs

Program expenses constitute 10% of the surveyed church budgets with children and youth ministries receiving the largest portion at 4%. Adult ministry and worship each garner 2%. Keep in mind that this does not include salaries for workers in these areas.

4. Missions spending

Across all church sizes the survey reveals that approximately 5% of the budget goes toward missions both international and domestic. For United Methodists, this money may also be reflected in a portion of our shared ministry apportionment.

5. Decreases in giving have affected some church budgets

Nearly half of all churches said they contemplated cost cutting measures but only 39% actually took any action. Those that did froze salaries (21%) or cut programs (20%) as the two largest actions by far. Thirty percent of respondents reported that giving was down by 2% or more.

Surveys, and the data they provide, can serve as a good general barometer of what is going on in the larger church community. These results may not resonate perfectly with your church for good reasons. For example, your church may vary significantly in its geographic reach and the demographics of the people you serve can have a significant influence.

If taken with a grain of salt, such information can still provide some sense of appropriateness with regards to your local church spending. My hope is that these figures can serve you and be a part of a conversation with your finance team.

Have a great Advent season!

3 COMMENTS

  1. Great article! One of the most helpful things I’ve ever received from a Conference Treasurer, and they have always been pretty helpful. Cudos.

  2. Good job on this report, Brant. It is clear and concise Should be helpful to budget planners and Staff Parish Teams. Gerrie Van Voorhis

Leave a Reply