“They didn’t teach me about church finances in seminary,” the pastor told me. “Now they expect me not only to be knowledgeable about it, I’m supposed to lead the church in finance and stewardship issues.”
I hear similar comments often. Through social media and personal contact, I have accumulated several questions pastors ask about this important matter. I am very appreciative of pastors, other church staff, and laypersons sending me these questions so I can get a good idea where the most significant gaps are. In this article, I address the three most frequent questions I have received about church finances.
- What is the amount of personnel expenses that should be in a church budget?
First, I’ll give the simple response. Personnel expenses typically should not exceed 55% of a budget. But such guidelines are subject to a number of caveats. If the church has debt obligations in its budget, for example, those payments will reduce the amount a church can put toward personnel costs. The average personnel costs are about 40% of budget, but averages can be misleading as well. As a general guideline, however, I would say the broad range of personnel costs should be 35% to 55% of budget.
- What are the sources of income for most churches?
As you would expect, the tithes and offerings are the dominant source of income for churches. About one-third of all churches have no other sources of income. But many church leaders may be surprised to know that, on the average, churches receive 13% of their income from other sources. These sources include investment income, ancillary ministry income (such as a school or mom’s day out program), denominational support, and rental income.
- How can I know if the amount our members give to the church is healthy or not?
Begin with an average and work from there. The average weekly per capita giving (WPCG) in an American church is $26. That is the amount, on the average, that every adult and child gives to the church each week. To calculate your church’s WPCG, divide your average weeklyundesignated receipts by your average worship attendance (including children). For example. If the average weekly budget receipts are $4,000 (roughly an annual budget of $200,000), and the average worship attendance is 150, the church’s WPCG is $26.67 ($4,000 divided by 150). That number would be very close to the national average. The economic demographics of your church, however, could affect this number significantly.
Please feel free to ask any clarifying questions you may have regarding my responses. You may also have some insights you would like to share with other church leaders. Finally, please let me know what church questions you would like me to address in the future or in the comments of this post.