What is a narrative budget? Why use it?
A narrative budget is a representation of the line item budget in simple, easy-to-read descriptive terms. It transforms a line item of money and expenses into an exciting picture of ministries and missions of the congregation. Research studies indicate churches often fail to communicate the value of the ministries they provide and the changes occurring in personal lives through ministries. Contributors, therefore, have a limited understanding of the use of their gifts or relationship with those receiving ministry benefits. A line item budget is an effective tool for the committee on finance to manage financial resources. It is not an effective means for interpreting those ministries or their impact. On the other hand, thenarrative budget helps members of the congregation understand what the church is doing in ministry, evangelism, discipleship training, and missions. It is a connecting link between the contributor and the church’s ministries. A well-composed narrative budget will educate and inspire everyone. And remember, a picture is worth 1,000 words!
Where do we start?
Form a small, special committee of representatives from the finance, budget development, and/or stewardship committees, the church staff, and a skilled writer and graphic artist.
- Review the line item budget and group budget items by ministry areas, such as worship, education, youth, missions, etc. Five or six categories is sufficient. Avoid “Building Maintenance” and “Salaries” as categories.
- Review the congregation’s mission statement. Creatively describe the various ministries of the congregation as they fulfill the mission statement.
- Consider pro-rating all salaries, building operational costs and overhead as well as program funds into specific ministry areas. If 45% of the pastor’s time is related to worship, pro-rate 45% of the salary and benefits to worship.
- Write one or two descriptive paragraphs for each ministry area. Use examples that paint a picture of the ministry. Enable readers to understand the impact the ministries have in changing lives. Use stories to illustrate the ministries’ effectiveness during the previous year. Picture new or expanded ministry needs as the rationale for increased funding.
- Provide a positive, clear explanation of significant funding changes, whether they are proposed increases or decreases.
- Expand the reader’s horizons by identifying several relevant and exciting additional or future ministries that could be undertaken with funding beyond the budgetary financial projections.
- Consider a pie chart that uses ministry areas to depict the budget visually. Other pictures of ministry in action are helpful.
- Prepare the narrative budget in an attractive, inviting, readable brochure format. Colored paper, if nothing else.
- Determine ways to use the narrative budget most effectively to communicate the exciting message of ministry throughout the congregation.