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One church I worked with was having some financial difficulties, so we studied the budget together. I'm no financial expert by any means - I can barely calculate the tip in a restaurant - but I do understand some basic principles.

One of those principles was being so badly broken that the church was suffering - 67 percent of the general budget was going to personnel expenses. This is far too high a percentage, and the church was reaping the results.

They needed to build, but couldn't make the new mortgage. They were faced with that ugly decision of firing staff to move forward. This is obviously a bad dilemma…firing staff for the sake of the Great Commission. Something just doesn't sound right about that!

There are no hard and fast rules about which financial principles may "never be broken" or altered temporarily as the need arises, but there are some general guidelines to follow. Beware…if some of those general guidelines are consistently violated. Following are some of those guidelines regarding budgeting.

There are four basic budget categories:
  1. Personnel
    This contains all personnel expenses of salary and benefits for all church employees. This includes everyone from the senior pastor to part-time custodian, and is typically the largest budget category.
  2. Operations
    This category contains the expenses such as the mortgage, building repair, office machines, phone bills, technology, etc. It is usually the second largest category and is often stretched in growing churches as they are continually building larger buildings.
  3. Discipleship
    Discipleship is a very broad category containing monies for all ministry efforts from youth to worship to men's ministry to children's ministry to…you name it! The only category that is usually not included is outreach/evangelism.

    The discipleship category is often perceived to be low priority, particularly by the individual leaders over the specific areas, but you get a better perspective when you add discipleship, evangelism, and personnel together.
  4. Evangelism/Missions
    This category often gets the short end of the financial stick - quite ironic when we realize that this category represents the core of the Great Commission! But for now, let's not get too philosophical; let's focus on the practical truth and general guidelines. This category contains monies for evangelism, missions, benevolent outreach into the community, and some churches will include marketing expenses in this category. (Others put marketing in operations.)

    So how much and where? One church consultant said that the ideal would be to allocate 25 percent to each of the categories. While this would be wonderful in an utopia kind of church, I don't know if it's possible. Perhaps it is, but I've never seen a church "pull it off."
My ideal breakdown of percentages is possible, but still tough:
1. Personnel: 40 percent
2. Operations: 20 percent
3. Discipleship: 20 percent
4. Evangelism/Missions: 20 percent

The most common breakdown of financial percentages is:
1. Personnel: 50 percent
2. Operations: 25 percent
3. Discipleship: 15 percent
4. Evangelism/Missions: 10 percent

Perhaps some ranges would be helpful:
1. Personnel: 40-50 percent
2. Operations: 20-30 percent
3. Discipleship: 10-20 percent
4. Evangelism/Missions: 10-25 percent

(Your total cannot exceed 100 percent!)

I recommend that you never allow your church to invest more than 50 percent of your general budget for total Personnel expenses. The exception is a new church plant situation. There are a few churches that have personnel expenses as low as 35 percent where the staff are paid reasonably well, but this is rare. Feel good about yourselves if you can keep it close to 40 percent (between 40 percent and 50 percent), as long as you are paying your church staff well…and you should.

The operations category often goes out of whack when growing churches are building new buildings. The new mortgage may rise sky high for some time until the capital stewardship campaign helps get it under control and ultimately pays it off. Don't let building costs rob you of ministry! I recommend that this category not exceed 30 percent of the budget.

Many churches try to raise "extra" money for the Discipleship category (the one most often raided when the budget gets tight) by tapping generous individuals or having all sorts of creative fund raisers. I want to caution you here. You often end up "robbing Peter to pay Paul," and the result is less than you would have received focusing on the big picture.

When it comes to the Evangelism/Missions category, be as generous as you can. Don't have guilt about it; just be generous. God will honor your efforts.

This article is used by permission from
Dr. Dan Reiland's free monthly e-newsletter
The Pastor's Coach available at

Author Biography

Dan Reiland
Web site: 12 Stone Church
Dan Reiland is Executive Pastor at 12Stone Church in Lawrenceville, Georgia. He previously partnered with John Maxwell for 20 years, first as Executive Pastor at Skyline Wesleyan Church in San Diego, then as Vice President of Leadership and Church Development at INJOY.

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