The following is another installment from my friends at MAG Bookkeeping. I just love everything about this wonderful organization. If your church needs bookkeeping or virtual admin assistance, there is no one I recommend more. You can contact MAG’s leaders Bryan and Shannon Miles or Randy Ongie by clicking HERE.
In this post they address one of the most important issues church leaders deal with – How Much Of Your Church Budget Should Go To Staff? Now let’s read their thoughts:
Without question, the biggest expense in your church’s budget is going to be your staffing costs. And, if you’re like most church leaders, it’s the expense line item that you have the least amount of understanding around. And that’s OK – you weren’t trained as a human resource or payroll expert. That’s why we’ve put together a series of posts to help you understand your staffing expenses, how to compensate your staff effectively, and what tips and tools can help you manage your human and financial resources to the best of your ability.
Most church leaders manage their staff in a reactionary way, rather than a strategic way. You start reacting to felt needs and responding to the volunteer or ministry leaders that are yelling the loudest, rather than being strategic and creating a plan for building out a staff where you’ve identified the key areas of ministry where you want to focus. By reacting, rather than planning, you’ll likely soon find your staff expense line item in unsafe territory. We recommend that your staffing costs not exceed 50 percent of your budget, and we actually like to see if closer to 40 percent. That’s not just salary dollars – “staffing costs” include all benefits, insurance costs and training. And it’s not just your full-time paid staff – “staffing costs” also include independent contractors that you pay via 1099, like musicians, childcare workers, graphic designers, maintenance workers and anyone else that you outsource a portion of your church responsibilities to.
Why does the percentage of your total budget spent on staffing matter? If it’s too far out of whack, it’s going to inhibit your future growth in that a large portion of your available dollars are committed to paying salaries that you can’t just stop paying. Also, when potential donors see the number of staff you have, there’s a very real danger of having them think, “This place is swimming with staff – they must not need any of my money!” And that’s never a good thing.
Your thoughts?
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