Church Planting Budget Tip: Understand the Cost

Doug Foltz —  June 13, 2013

by Doug Foltz

Just recently, we were working with a church planter who was falling behind financially. His answer to the problem is one I’ve heard a hundred times: “I’ll just fundraise more.”  Another common one is, “I’ll get the church to give more.” The problem with these answers is that there is some truth in them. You do need to fundraise more and get the church to give more. But many times, that’s not going to get the whole job done.

It’s common practice to think of offering in terms of dollars per head. You take the total offering and divide it by the number of people in attendance. This is a great way to calculate the local offering for a new church. Most new churches will range from $8 a head to $15 a head. The variables are:

  1. Location: If you’re reaching lower-income people, you’re likely to be on the low end of the spectrum.
  2. Spiritual maturity: If you’re reaching unchurched people, you’re likely to be on the low end of the spectrum.

This same calculation is helpful to understand the costs. Look at the last few months of your budget. How much have you spent on average? Divide this number by four (the number of weeks in a month) and then divide again by the average attendance.This will give you the cost per head.

Here’s an example: Trendy Church Plant is averaging 102 people on Sunday morning. The offering over the past four Sundays has been $1,892, $674, $1,043 and $952 for a total of $4,561. That works out to $11 per head of offering. The expenses for the past three months have averaged $12,679. That works out to $31.08 a head to run the church. To break even in the budget, income must be increased by $20 a head or almost tripled.  

Breaking down the cost this way is beneficial because it helps you to see how much your giving needs to grow in the current environment to be self-supportive. The smaller numbers are easier to wrap your head around and paint a much more realistic picture. From this scenario, its easy to see that increasing the giving won’t be the only answer to the problem. You’ll likely have to fundraise outside support and cut costs to financially right the ship.

Four things to know about calculating the cost per head.

  1. This number helps you to see over time the real cost of doing ministry. Congregations grow and shrink as well as the budget. Calculating cost per head will help you see a trend line in your spending.
  2. Cost per head can help you evaluate the effectiveness of a program or staff hire. If you increase the spending, the hope is that this will increase the attendance. Calculating the cost per head over time allows you to see not only if the attendance went up, but also if the overall cost of ministry increased or decreased with the change.
  3. Sustainability is the No. 1 financial goal of a church plant. Calculating the cost per head and offering per head will help you see how close you’re getting to the goal.
  4. The smaller number helps keep you from being deceived. Church planters are visionaries, not detailed budget guys. Tell a church planter they’re $10,000 short, and they’ll quickly see ways to raise funds. Tell them that the offering  has to be tripled by each person attending, and they understand better the dire situation.

Big thanks to David Limiero for teaching me this! You can follow David on Twitter @davidlimiero. He posts lots of useful information for church planters and pastors and is one of the smartest guys I know.

 

Doug FoltzDoug Foltz has 15-plus years of church planting experience with 50 new churches and works with planters to clarify and implement their vision to chart out a path toward realizing the God-sized dream of making disciples through church planting.

This post appeared at: 10 Tips to a Better Church Planting Budget: Understand the Cost

Doug Foltz

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