Telling the Mi$$ional $tory
Most everyone loves a good story. Financial reports in churches are often presented as a spread of numbers whose objective is to answer the Big Question "Did we bring in enough to cover our expenses?"
If the answer is "yes," we breathe a sigh of relief and move on to discuss the next church dinner.
If the answer is "no," we start planning out the Big Ask from the pulpit (everyone must give more) or worse we bring out the Big Ax and cut expenses (I've done the math, we can't afford the dog.
Balancing income and expenses is the important leadership task of our financial committee and pastor so that we can assure the funding of ministry is in place. Sure, we must assess the present reality and plan for the future. However, we can uncover a narrative of what God is doing in the congregation as we look at our actuals. We can see areas of growth, areas of concern and we can begin to prayerfully discern God's dream at this time.
In the United Methodist churches, we share a common platform for presenting our yearly giving, membership, expenses and more in the annual statistical report. Consider this: every statistical report tells a missional story. What's yours?
Line-Item Budget vs. Narrative Budget vs. Impact Report
A Line-Item Budget is an accounting method that lists all of what the church anticipates spending and receiving in every category of the churches program and operation. The details are important as leaders can see how much was spent by every ministry area. Line Item Actuals are the report of what is spent to date in these same categories. Often the Church Council will receive and review these at their monthly meetings. An advantage is that figures are clear. A disadvantage is that reports of numbers without explanation can be confusing to read.. and some of us are just too embarresed to ask!
Another problem is that when areas of ministry are presented as line items.. it can seems as if the areas operate autonomously, disconnected from others. For instance, if we look at Administrative Expense and note that "copier rental" has increased, we don't see how that dollar figure is tied to areas of ministry that rely on this resource. Did it increase because we added additional bulletins for a growing worship attendance?
David Ponting former Director of Stewardship and Financial Development in the Anglican tradition, writes that "The traditional line-item budget is a good accounting and planning tool, but narrative budgeting is the best tool I have found to demonstrate how money and time filter through the church to touch the lives of people in need."
View his article The Importance of a Narrative Budget. 10 Sept 2014 Leading Ideas Lewis Center for Church Leadership.
A Narrative Budget names anticipated costs (operational, administrative programatic, staffing, etc) and groups them into categories or key areas of ministry that express the mission. In other words, there is no category called "Administration" rather the administrative line items would be allocated across all the areas of the churches mission.
Baltimore-Washington Conference
Hixson United Methodist Church, Tennessee
2014 Narrative Budget PDF
Step by Step guide with sample "case study" translating line-item into narrative compiled by Missouri United Methodist Foundation
Building a Narrative Budget PDF
An Impact Report, or Annual Report, describes past accomplishments, often through compelling stories, photos, statistics, charts and more. It translates income/expense/statistical data into a story that celebrates the impacting these resources had within their community and in wider connectional mission with the denomination.
According to UMC Reverends Andy Langford and Mark King, "The number one reason people give to their congregation, or any other charity, is because they believe that organization makes a difference. A colorful annual report on your congregation’s ministries and missions will help members and guests feel positive about your church."
View The Pyramid of Christian Generosity: A Congregational Financial Stewardship Strategy PDF
The Gathering (a UMC in Kansas City MO)
View their 2015 Impact Report
The United Methodist Church: General Council on Finance & Administration
View their 2014 Annual Report