Why Church Health Matters Part 11
(Data That Points To Church Health)
December 14th 2020

Monday Morning Matters

Niyi Dunmade
Certified Church Consultant
Founder/CEO, Magnicraft Consulting

The past 10 weeks we have been discussing Why Church Health Matters. We have also discussed 10 out of the 14 vital signs.
Today we shall discuss debt to annual giving and percent staff budget

11. Debt To Annual Giving
An appropriate use of debt can help churches acquire the resources they need to better reach their communities. But falling into the trap of over-borrowing sets up a church for financial struggles. Consequences may not be experienced for a couple of decades, but the effects of poor loan decisions are sure to be felt. The level of debt you are prepared to manage is proportionate to the size of your annual giving. I encourage leadership teams to take caution when their debt exceeds twice their annual giving. Anything less than that is usually very manageable for most churches.
Plans to get out of debt as a church: savings, insurance and investment

How to calculate this data (formula):

Total debt/General Fund Budget

US Comparison
Critical: greater than 3
Caution: Between 2 to 3
Manageable: Between 0.05 to 2
Very strong: Less than 0.05

12. Percent Of Staff Budget

A great team is invaluable to any church. But an over-reliance on staff members to accomplish the vision can create a financial burden that actually hinders it. And as we’ve already discussed, over-hiring reduces the number of opportunities for people to volunteer their gifts and serve in the body of Christ. A general standard is to spend no more than 35 percent of the total budget on all personnel expenses. I encourage many of the churches that I work with to strive for as low as a 30 percent staff budget while increasing their utilization of volunteers. Not surprisingly, the churches with the lowest percent staff budget tend to have the highest percentages of people serving. Some leadership teams seek to “staff ahead of growth,” hiring additional staff members to prepare for an expected increase in attendance. This is a fine tactic as long as you already have a winning strategy proven by current growth. But expecting that new staff members will inject the energy and ideas necessary to get unstuck is a poor leadership decision. It is similar to a basketball team with a terrible playbook expecting the signing of an all-star to improve the win column.

How to calculate this data (formula):
Staff Budget/General Fund Budget

US Comparison
Top 10%: greater than 62%
Above Average: 54% to 62%
Average: 44% to 54%
Below Average: 37% to 44%
Bottom 10%: Less than 37%

From next week  we will discuss the last two of the remaining fourteen church health data (Attendance To Seats & Seating and parking in our subsequent Monday Morning Matters. And the we rap up the year on good note. Don’t miss this.

Be blessed as you watch today’s live broadcast.

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