Over the years of my career, I have tried to help various church boards devise effective strategies for controlling expenses. Along the way I’ve learned a lot about how to develop budgets that work. There are a lot of challenges when building a budget for a nonprofit. Projecting income is one of those challenges. Many congregations use pledges to help build their budget. Individual members make pledges or estimates of giving that are totaled to give a starting point for financial planning. The problem with these systems is that there are people who are generous givers who do not want to make a pledge. Some feel that doing so creates an obligation that they might not be able to fulfill, Although most pledge cards clearly state that the estimate is not a contract and that a pledge can be changed at any time by contacting the appropriate church officer, there are folks who simply don’t want to make that kind of a commitment. Another problem with pledging systems is that they are dependent upon a significant amount of work to solicit and motivate members to fill out pledge cards. The total number of pledges is due in large part to how successful the congregation has been at convincing members to pledge. Some years, finance boards are reluctant to ask people to give and to make a pledge. This reluctance is reflected in the amount pledged, but it might not be reflected in the actual amount given. A low pledge number, however, can cause a finance board to panic and to cut expenses in order to balance a budget.

A budget, however, is a plan and not the reality. I’ve spent countless hours struggling to build balanced budgets that have not been accurate in projecting either income or expenses. Learning to read the numbers and project trends can be a helpful tool, but volunteer leaders may have very different levels of experience and different expectations for the process.

There are expenses that a budget committee can control and there are expenses that they cannot. Program expenses, such as resources for education programs and be constrained by careful planning. Fixed expenses, such as utility costs, cannot. I’ve seen budgets that were based more on wishful thinking than on experienced reasoning.

In addition to a career of working with church finances, I have served on the boards of several nonprofit organizations with fiscal responsibilities. One of the hardest lessons for boards to learn, whether those of churches or of other organizations, is how to control spending. I’ve sat in long meetings reviewing every bill that needs to be paid as if a board could choose whether or not to pay a particular bill. One board on which I served voted each month on each individual check that was issued. It was a tedious process. However, all of that deliberation was ignoring the fact that the debt had already occurred. You can think that an expense is unjustified, but if it has already been made, it is irresponsible to not satisfy the debt. A board may vote on whether or not to pay an electricity bill, but it would be irresponsible to simply not pay the bill once the expense has occurred. The place where a board can wield meaningful power over expenses is not at the point of paying bills. To be proactive about controlling expenses requires being involved in purchase decisions. A system for approving purchase orders is far more effective at controlling expenses than a system of approval of invoices received.

The United States Congress, however, seems to have not learned this important lesson. The news is full of stories about negotiations surrounding a congressional vote on extending the debt ceiling. Some of the debate is meaningful. The government should be conscious of debt and excessive debt can interfere with effective government. Money paid in interest is money that is not available for programs. Excessive debt can cripple individuals and institutions. Borrowing should be carefully considered. However, holding last minute talks about the debt ceiling ignores the fact that the debate is about expenses that have already occurred.

There is a big difference between fiscal responsibility and defaulting on payments of expenses that have already occurred. The continually rising debt of the United States government is the result of spending bills that have already been approved. Refusing to borrow additional money to cover expenses already approved does not control spending. Rather it creates financial instability as creditors become leery of extending more debt, driving up the cost of borrowing.

Legislators can make all kinds of pretty speeches about controlling debt, but those speeches don’t actually control debt. The only way to control debt is to control expenses. The difficult process of exercising restraint and spending less is very different than grandstanding when the time comes to pay the bills for expenses already occurred.

Of course, I am not actually involved in any of those talks. I simply read about them in the news. I’m sure that there are people of good faith in the administration and people of good faith in the congress. Different people can have different opinions and different priorities. they have, however, arrived at a process that appears to me to be way too reactive to produce results. The bills need to be paid. A budget process that looks at the big picture, instead of considering projects item by item could have far more impact. Talks about future spending are more productive than negotiations over whether or not to pay bills for expenses already incurred. None of the principals in the negotiations, however, are consulting me.

That is probably a good thing. I am definitely not experienced in the kinds of numbers they are brandishing. I have worked with budgets in hundreds of thousands of dollars - far smaller than the billions and trillions that are involved in federal government spending. While the principles may be similar the sheer scale of federal finances places them beyond my comprehension. I do know, however, that there is very little studying of the history of the federal debt and which policies have resulted in extending the debt. Those who are making the most noise about the debt are often the same people who have supported excessive spending in the past. In that respect it is not different from a nonprofit board.

It will be interesting to see how this all unfolds. I’m not holding my breath waiting for rational thought and responsible spending, however. I’ve followed the history of the federal legislature enough to project a few trends and I’m fairly good at projecting trends. The trend toward irresponsible behavior and out of control spending continues despite all of the pious speeches aimed at the media.