Developing Your Church Tech Budget

Photo courtesy of Tax Credits

Photo courtesy of Tax Credits

Last time, we started to look at the various categories that make up a church tech budget. Today, we’ll consider how to come up with the amounts that should go in each category. Before we start, I want to acknowledge that not every church will have a real church tech budget. Many small churches struggle to get by each month, and the tech teams there just do the best they can. I get that. My first church was that way. 

However, I would suggest that if production technology is at all important to the mission of the church, there should be some thought given to how it gets paid for. As individuals, we typically don’t reach financial goals without doing some planning. The same is true for organizations. Not having money to invest is not an excuse for not planning for retirement years. You still need a plan to get there. Start somewhere; anything is better than nothing. 

Establishing the Budget

There are many ways to go about this. Some would suggest a flat percentage of the total budget, and I’ve heard percentages ranging from 1-5%. For a church that relies very heavily on production, that number might be even higher. For churches with very large budgets, the number might be lower. But that is a rough starting point. If you are using this method, you’ll typically be allotted an amount, and it’s up to you to spend wisely. 

Personally, I’m not a huge fan of this as it can lead to government-style spending. “Well, I was given $50K and if I don’t spend it this year, my percentage will get cut next year, so I have to spend.” It might be a little less work, but I prefer need-based budgeting.

I’ve found that the needs for tech don’t always track flat every year. In other words, some years are rebuilding years, others are maintaining years. I would rather spend what I actually need each year, not whatever random amount was allocated. And for those who think it’s really hard to go from maintenance (a low spending year) to rebuilding (a high spending year), I can tell you it’s a lot easier when you do a great job tracking, maintaining and making a case for the need for new equipment. Take this advice—it’s more effective to ask for more when you’ve built trust. And you build trust by taking this very seriously. 

Track Actual Expenses

When you come into a new church, hopefully they have some historical data you can look at to establish a baseline budget. In every situation I’ve been in, I started with previous budgets and always requested reports of actual expenses to start to see what it actually costs to run the department. Typically, I’ve been able to go in and make some tweaks right away that make things more efficient and thus more cost-effective. 

Once you know what it costs to run the department, you can begin to assess what you need to upgrade and update. Unless you’re in a very special situation, you’re not going to get carte blanche to spend whatever you want to upgrade everything at once. You’ll need to develop a plan. I always attack major pain points first, trying to land some big wins right out of the gate. That builds credibility and makes it easier to keep getting more. 

Best Guess, Mr. Sulu

Sometimes you don’t really know what your expenses will be. At that point, you have to take your best guess. For the equipment category, I added up the gear that I wanted to buy in the coming year, found some rough pricing on it, and used that as my budget line number. Supplies are similar; how many rolls of gaff tape might you need? How many batteries do you use a weekend, do some math and there’s your number. Of course, you should be using rechargeable batteries and that saves you a ton of money, but you need to buy chargers and batteries to start. How much will that cost? 

For some categories, food for example, pick a number that seems reasonable for a month of taking your team out for lunch, coffee and bringing in snacks as needed. Multiply by 12 and you have it. Don’t go crazy with it, though, or it will look like you’re just trying to get your lunches paid for. I usually made do on $50-60 a month with my smallish team. 

Sometimes it can be hard to guess how much gear you’ll rent for Christmas, especially when you have to submit your budget in March and you have no idea what the Christmas production needs will be. This is where historical data and just a gut check will come in handy. Still, it can be just a guess.

Getting It Wrong

Sometimes I hear from guys who are super-stressed out about getting their budget perfect. They are deathly afraid of under budgeting for something then going way over. Let me try to assuage those fears—it happens. Look, when you’re trying to come up with 12 months worth of repair spending, you have no real way of knowing what’s going to break. You’re not likely to get fired if something goes horribly wrong and you’re short on budget—that is if you can demonstrate that you did your best to get it right and you either A) just didn’t know the true costs of doing this or B) there were things out of your control. 

For example, let’s say you buy a new bulb for your projector and it turns out to be defective. Not only is it defective, but it explodes inside the unit like a fragmentation grenade and destroys the LCD panel and half the cards. That might blow your entire budget, but it wasn’t your fault, and you had no way of knowing that would happen. It happens (it happened to a friend of mine). Remember the post I wrote a while back, Trust God and Do your Best.

There are no hard and fast rules for this as every church and situation is unique. Hopefully this gives you some guidance that will help you come up with your plan. As we continue on with this series, I’ll be stressing how important it is to pay attention to this and build trust. That cannot be overstated. More to come!

Roland

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Building Church Budgets

Photo Courtesy of GotCredit

Photo Courtesy of GotCredit

My friend Van and I get quite a few requests to help out with younger TDs who are charged with coming up with a church tech budget for the first time. To be sure, there’s a lot to it, and the process can be intimidating if you’ve not done much with budgets before. I am thankful that when I became a TD, I had already worked in several roles that required me to develop and stick to budgets. Today, we’ll talk about some things that will help you through this process.

Basic Budget Categories

Some churches use standard accounting categories for every purchase, while others leave it up to each department to come up with their own. I’ve worked in both. Here is a list of some standard categories you should probably have in your budget. They may be named something slightly different, but they should be here.

  • Equipment & Furniture Purchase
  • Rent & Lease
  • Repairs & Maintenance
  • Supplies

Those are the basic four. Obviously, Equipment & Furniture is a standard accounting term; you probably won’t be buying much furniture. Unless it’s new chairs for the tech booth. Equipment is just what it sounds like—gear. This would be mic’s, lighting fixtures, cameras, computers, audio interfaces, speakers, cables, etc. Anything that you will use over and over is likely an equipment purchase. Now, some churches make a distinction between capital expenses and regular E&F purchases, but we’ll get to that in a minute. 

Rent & Lease is typically where I put rental gear. We didn’t rent a lot, but we did for Christmas, Easter and VBS. VBS rental came out of the Kid’s Min budget, but Christmas & Easter were mine. Usually it was more light fixtures, but there was sometimes audio gear as well. Chances are you’re not leasing anything.

Repairs & Maintenance—the equipment you purchased needs to be maintained. Projectors need service, lighting fixtures need to be tech’d, consoles need to be cleaned. Sometimes stuff breaks and will need to be sent back in. Don’t short yourself on this category. 

Supplies are things that get used up and discarded. Batteries, gaff tape, bulbs, filters, hardware bits, things like that. Sometimes in a tech budget, weird stuff like aircraft cable and spray paint show up here. 

Optional Budget Categories

  • Books & Subscriptions
  • Conference & Travel
  • Food & Beverage
  • Independent Contractors
  • Leadership Appreciation
  • Postage & Shipping
  • Software

I used to put a little money in the budget ever year to buy a few books and maybe subscribe to a training site or online service. Some years I never spent anything, others it was a few hundred dollars. It’s good to have, though.

Conference & Travel is one that typically gets cut when money is tight. I fought for this every year for 5 years and lost every year. Some churches don’t see the value in their employees getting better at what they do, some just don’t have the money. Still, I submitted it every year because I think it’s important. 

Food & Beverage is a big one. Tech people love to eat. There are not many better ways to encourage and thank your tech team than to feed them. I spent several hundred dollars a year on F&B for my team, and they knew they were cared for.

Not every church hires independent contractors, but even if you don’t, it’s not a bad idea to budget for some. Occasionally it’s a good idea to bring an outside expert in for a weekend to help your team get better. Or maybe you have one main audio volunteer and he wants to go on vacation once in a while. Some churches pay their whole tech team, so this number is going to be bigger.

Leadership Appreciation was a nebulous category for me. I sometimes put some money in there because hey, who wants to cut appreciating leaders? I would then slide this money into something more useful like F&B and appreciate my leaders that way. 

Postage & Shipping is one many churches forget. Ever had to overnight an antenna combiner from CA to IL for repair? You’ll wish you had some money in the budget for that. Now, some might argue that the freight charge should come from repair and maybe it should. But you may have to ship back demo gear, stuff that didn’t work out or send your team a nice set of thank you cards. 

Software is often broken out because it is handled differently from an accounting perspective. We don’t buy a lot of software as TDs, but you may be looking for a new DAW, an upgrade to your video editing software, or a measurement application. 

Keeping Track

In last week’s post, I mentioned it’s important to manage your budget well. To do so, you have to keep track of your spending. Most churches will issue accounting reports each month, but I always found those hard to read, and always at least several weeks behind. So I built my own spreadsheet. I’m including my actual 2013-2014 budget spreadsheet below so you can take a look. It’s a Numbers file originally, and while I converted it to Excel for you Office users, it’s not the same. 

I tracked every single purchase and knew at any given moment where I was percentage-wise for the year. Because of this, I could come in pretty much right on or slightly under budget every year. That makes the money people very happy. Look through that spreadsheet and you can see how it works. I enter the expenses in the appropriate category tab, and it’s all tabulated on my overview sheet. The percent of year calculator is broken as we’ve gone a few years past the end of fiscal 2014, but you’ll get the idea. By knowing where we were in the year (55% left, 34% left, 21% left), I could track my remaining budget. The cells even changed color when I hit various limits.

This is getting long, so I’ll stop here. Next time, I’ll pick up with more on developing and tracking your budget.

Budget Tracking Spreadsheet (Numbers Version)

Budget Tracking Spreadsheet (Excel Version) (Not as Cool)

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Church Tech Budgets

Image courtesy of Emilian Robert Vicol

Image courtesy of Emilian Robert Vicol

One of our readers in Norway (you didn’t know we had readers in Norway?), Geir Kristoffersen sent me a note the other day about church tech budgets. He was looking around at various TD job descriptions and came across the following quote from one such description:

RESPONSIBILITIES:

.... 

8. Manage the campus production budget to fulfill as many technical needs as possible. 

This is interesting language. “Fulfill as many technical needs as possible.” That could be read in a few different ways. It could mean, “Hey, we’re only giving you so much money. Do your best. We know it’s not enough, but do all you can.” On the other hand, it could mean, “We have high demands and we expect you to squeeze value out of every dime and get all this done.” 

What’s in a Budget?

As I pondered that thought, it started to occur to me that many younger TDs probably don’t have a lot of experience in managing budgets. And yet you are expected to manage thousands, tens of thousands or even hundreds of thousands of dollars for your church every year. Often, you are responsible for every dollar you spend, and you may or may not have a say in how many dollars that is. I hear from many of you who tell me there is no tech budget—you simply have to beg for funds when something breaks. 

Others of you have to submit a projected budget for the coming year, which can be especially challenging the first year or two you are in that role. Without any historical perspective, it’s hard to know how much to put down in what categories. Or what categories you even need. 

Over the next few posts, I’m going to walk you through a few concepts for developing a church tech budget. But before we do that, I want to share some of my experiences. My hope is to help lend some perspective that you are not alone in this struggle. 

Church One: Tight Budget

My first day on the job at my first church was the last day for the senior pastor. He was leaving to teach at a college. In the ensuing months as the search for a new pastor started, giving fell off. Way off. I had five rooms that had full production equipment in them, and they were used a lot. Most of the equipment was old, broken or wrong. And the budget was small to begin with. 

As we were just going into the budget cycle for the next fiscal year, I studied past budgets and began looking for areas to cut so I could start replacing equipment. That’s where I started with rechargeable batteries. An initial investment of $700 saved me $3,500. That $2,800 went a long way. Still, it was tough. I had to get every purchase approved first as cash flow was tight. It took 2 1/2 years to make any progress. But as leadership started to see results, trust, and the budget began to grow.

Church Two: Disappearing Budget

When I came on board at Coast Hills, it was during a period of great change. In the time between my first interviews and when I started, the tech budget shrank by 40%. Over the next two years, it went down by another  20-30% each year. And during that time, leadership expected everything to run as normal. By year three, it was time to start making some hard decisions. We reached the point where we could not continue to do things the way we had been. It was a hard place to be, but after some frank conversations, we found a way through. 

But as things began to turn around and I demonstrated that I could work with less—albeit at a slightly lower level of production—the budgets came back. I was able to get a capital replacement fund started based on big equipment end of life expectations. By the time I did my last budget there, leadership barely batted an eye at my submission. I had built enough trust that they looked at my projections and said, “OK, Mike’s knows what he’s doing here.” 

Geir made a great analogy in his email. He said the string is only so long, and when you get to the end, there is no more. When we manage a tech budget, we have to work with what we have. We manage it well, but it is only so big. We can only do so much. And often, it is others who determine the length of the proverbial string. 

I’m going to try to help you walk through this process. Developing a budget, establishing a capital replacement fund, and building trust. The last one cannot be overstated, either. You simply have to build trust with your leadership when it concerns your budget. So stay tuned; we have some good stuff coming ahead. 

Roland