A More Accurate Way to
Measure Giving Through the Year
by Lovett H. Weems, Jr.

"In what situation do we find ourselves?" is always a key leadership question.   Only with an accurate perception of reality can planning of next steps begin.  Nowhere is an accurate definition of “the situation in which we find ourselves” more critical than in church finances. Virtually every ministry of the church is touched by its financial resources. Since leadership is so shaped by funding, great care needs to be given to tracking giving throughout the year.

Nine out of ten churches use one of two methods in reporting progress in reaching their financial budget goals. Some churches report monthly. Dividing their annual budget by twelve, they define what is “needed each month” as 1/12^th of the annual budget. Along side this amount they report the month’s receipts. The total in both categories is cumulated as each new month arrives. Other churches compare their budget needs and receipts on a weekly basis, dividing the budget by 52 weeks to determine what is “needed each week.”

These practices appear perfectly logical except for one fact. No actual congregation gives in such a rational way. Congregations do not receive money equally each week or month throughout the year. Therefore, people are giving according to one pattern while churches monitor their giving based on another pattern.

These standard methods of monthly or weekly reporting do not provide an accurate reading of how well a church is doing financially as the year goes by. Most importantly, monitoring giving against equal monthly or weekly expectations does not answer the most pressing question: “How likely is it that a church will raise its budget in full by the end of the fiscal year?” In some churches studied, the budget report in the newsletter or bulletin will show a “deficit” every month of the year through November and then by the end of December the budget is raised. This is not because church members finally notice the deficit in December and give more. Rather, these churches always receive much more in December than at any other time of the year. If church leaders had assumed throughout the year that the budget would not be raised in full, they would have made poor decisions based on what they thought were reliable budget reports.

What is an alternative?

An alternative is to monitor giving throughout the year based on the way people in your congregation tend to give. Each church has its own profile of giving based on many factors. I call that unique pattern of giving the Congregational Giving Profile (CGP). The CGP may vary considerably from one congregation to the next, but the CGP for a particular congregation tends to stay the same from year to year. Changes tend to take place more gradually over a period of years. That is the reason the CGP should be recalculated yearly.

Using the Congregational Giving Profile

The first step toward more meaningful budget reporting is to determine your congregation’s unique pattern of giving. Gather statistics on how much was given toward the budget each month (or week) over the past three years. Average each month’s (or week’s) giving and calculate what percentage of the annual giving came during that period. Recalculate these figures each year, using the most current three years. Using a three-year running average accounts for any variations that may have occurred in a particular year. However, it is important to remove from the calculations any large one-time gifts that would skew the calculations. For example, if a one-time gift of $50,000 came in March of the previous year, then simply remove that amount from the March total, which will reduce the grand total given for the year and will change the monthly percentage calculations.

The second step is to apply these data on giving patterns to a church’s current budget situation. Using the budget goal for the new year, calculate how much money should be expected at each point during the year based on the CGP. Now, instead of showing an expectation of 1/12^th of the funds each month (or 1/52^nd each week), the amount expected will be based on how people actually give. This will reveal how much should be received through January, then through February, and so forth. The key figure is the cumulative percentage of the budget that can be expected based on past trends through whichever period has just ended.

Examples and illustrations of this approach are provided with this issue of Leading Ideas. There is also a link to an Excel file with a pre-programmed template for you to use in calculating your CGP by entering your church’s giving from the past three years. The worksheets give further information about what to include and exclude in your calculations.

Pay Attention to How You Are Doing

This system of reporting requires close attention to what the giving figures reveal. Under the old system, it is easy to become accustomed to running deficits for much of the year, assuming that the money – or at least most of it -- will come in at the end of the year. The CGP is a much more precise budget measure. For example, if after a few months using the CGP to monitor giving, a church is consistently running about ten percent behind in giving, it is reasonable to expect it will end the year with a ten percent shortfall. It should adjust spending plans to account for the shortfall while there is still time. On the other hand, if a church is running even or somewhat ahead of expectations based on CGP calculations as the year progresses, chances are very good the year-end financial picture will be positive.

I hope pastors and finance officers will give this system a try. I know from experience how effective it can be. But I want to continue to learn from your experience using CGP. Please share your ideas or questions with me at lovettw@wesleyseminary.edu.

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