One of the most common mistakes made by churches is the failure to properly budget the cost for a project. The actual costs for the building construction generally accounts for only 60% – 65% of the total project cost. In addition to the cost for the “bricks and sticks,†there are generally site construction and improvement costs, which can be substantial. They tend to average about 10% – 15% of the total project cost. Additionally, there are “soft costs†that are required. These are dollars spent to hire the architect, engineers, and legal counsel, and to pay municipal fees for reviews, approvals, etc. These tend to run about 15% of the total project cost.Â
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The next item to be considered would be furniture, fixtures, and equipment. It has been our experience that this particular part of the project has been growing as churches become more technologically oriented. Previously (40 years ago) the biggest cost would have been for an organ or piano. Today the sound system, video projection, theatrical lighting, theater seating, computer systems and networks, etc. can cause this budget component to approach 15% of the total project costs.Â
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Finally, there needs to be a contingency fund that is a part of every project. A “rule of thumb†for construction is to “expect the unexpected.†Unlike a car that has rolled off the assembly line in an identical configuration, thousands of times (even these are subject to recalls), this particular building, on your site, meeting your requirements, has never been built before. We recommend that the budget for all new construction begin with a 10% contingency. Once hard bids or contracts have been awarded, this number can be reduced to 5%. For renovation work, the contingency should start out at 15%. Time after time, conditions that could not otherwise be known before the building is “ripped apart†exist, that prevent the design from being implemented exactly as shown. Unfortunately, this is not the fault of the Architect or the builder; it’s just the way things are. No one could have known about it unless they were there at the time it was built. Once bids have been received for the project, and the work contracted, this amount can be reduced from 15% to 10%. It is important that the contingency not be seen as money that’s available to buy additional things until the work is fairly close to being completed. It can also be seen as money that will reduce the amount of debt taken on the building at the end of the project.
