A good thing happened last year during the budget planning process at New Covenant Baptist Church in Grass Valley, Calif. For the first time, the budget was prepared using a step-by-step approach to achieve a sound financial plan.
“We are a smaller church with membership of 125,” pastor Mike Sanchez said. “In the past, our budget planning was the church council meeting to consider the needs of the congregation and then matching the giving to the needs. It was not always the most effective method.”
But things changed when the church asked Rod Wiltrout from the California Southern Baptist Convention to meet with the council and help develop a new budget approach.
“I met with the group and together we went through the Annuity Board’s Planning Financial Support workbook which gives a church an easy-to-follow budget plan and even provides sample policies and forms,” said Wiltrout, director of the California convention’s stewardship development department and the Annuity Board state representative.
In addition, the workbook includes important information about restructuring the minister’s salary away from the “package approach” to a “salary and benefits approach.” A salary and benefits approach includes reviewing ministry-related expenses, protection benefits and personal income for ministers.
“With this new approach, our church council set up a blueprint for our budget that worked great for our congregation this year and puts us ahead of the game as we prepare for 2004,” Sanchez said.
Another benefit is that restructuring Sanchez’s salary from a lump sum to a salary and benefit package helped him take advantage of the tax laws specifically designed for ministers and opened the door for Sanchez to participate in the Annuity Board’s retirement plan. His participation in the Church Annuity Plan will automatically provide him a survivor benefit up to $100,000 and a disability benefit of $500 per month at no cost to him or to the church.
“It was a win-win situation for the congregation and for me,” Sanchez said. “Our 2003 budget was designed to meet the needs of the church and of the pastor and we are seeing positive benefits all around.”
The Planning Financial Support workbook is a free resource available at the Annuity Board by calling 1-800-262-0511 or visiting the website at www.absbc.org.
“We believe this workbook is one of the most valuable tools available to our local churches and the pastors standing at the crossroads,” said Annuity Board President O.S. Hawkins.
“While most entities of the Southern Baptist Convention have their focus upon the ‘message’ of the Gospel, it is the Annuity Board’s privilege to focus upon the ‘minister’ of the Gospel, and this includes being the pastor’s advocate,” Hawkins said.
“It is so important for churches to restructure salary packages in order to provide the pastor and church employees adequate pay while the church takes on the responsibility for funding the cost of protection benefits such as medical, life and disability coverage and retirement plan contributions,” he said. “To simply provide a ‘lump sum of money’ and then require the minister to cover the cost of benefits out of that sum is a disservice to the minister and the church.
“The Annuity Board staff and state annuity representatives stand ready to help churches in this worthy endeavor,” Hawkins said.
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