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5 Ideas for Managing Your Church Budget in the "New Normal" by Ken Sloan

Updated: Nov 2, 2023

Article retrieved from

In November of this past year, I presented a webinar titled, “What Has the Church Learned from the Pandemic?” As I had done with many of my webinars, I came up with the topic and started planning for it months in advance, thinking that by November 2022, the COVID pandemic would surely be in the rearview mirror. The pandemic was not over in November, and the reverberations of COVID-19 – and new cases and new variants – are still with us.

One of the lessons I highlighted in that webinar that seemed to resonate with many of the participants was that churches would be wise to “plan and budget for disruption.” My suggestion was that as we move into 2023, churches should be aware that not only is the COVID pandemic disruption not over, but we will probably be seeing more disruption in the near future. There might be another new disease that is spreading quickly and causing concern for gatherings of people. Even more likely, we should anticipate disruptions in our lives as the climate crisis seems to be fueling more dramatic weather events. The recent Christmas season’s historic cold wave caused cancelations across many parts of the country as snow piled up, airports closed down, power lines came down, and pipes froze. Many churches and their members found Christmas Eve and Christmas morning services to be a real challenge.

If that were not enough, we enter the year with an unpredictable economy. Even those most “in-the-know” about the economic landscape seem to be unable to predict whether rising interest rates will curb inflation or whether we are moving into a recession.

So, how can churches be ready or plan for disruption? Here are five ideas you might consider.

1. THINK OF YOUR ANNUAL BUDGET AS FOUR QUARTERLY BUDGETS. I suggested this idea back in 2020, as the pandemic was just getting underway. Without knowing when or in what manner churches would be able to gather for worship, Christian nurture, and fellowship, it seemed impossible to rely on budgets prepared before the pandemic and to anticipate income and expenses for twelve very uncertain months. A quarterly review – income and expenses – with an opportunity for adjustment seemed a reasonable suggestion. It continues to be a reasonable suggestion. In a practical sense, it might mean that programmatic and some operating spending should be capped at 25 percent of the total budget for each quarter (with exceptions, of course, for extenuating circumstances). Staff hours might also need to be reviewed quarterly as well.

2. TRACK INCOME AND EXPENSES BY COMPARISON TO THE PAST FIVE YEARS. Many churches have gotten used to being able to compare this year to last year as a barometer of the financial health of the church. Comparing 2023 finances to 2022, 2021, or 2020 is problematic. Including 2019 data still provides a good reference to where your church was when “pandemic” and “COVID” were not words we used every day. The insights these comparisons provide may not be bad news; you may be pleasantly surprised by some of what you see. If your church was able to take advantage of emergency programs like the Paycheck Protection Program (PPP Loans) or other emergency measures, you will want to note those as exceptions to regular church income for year-to-year comparisons.

3. CHURCH LEADERS NEED TO SPEAK THE LANGUAGE OF 'INFLATION-ADJUSTED DOLLARS.' Concerning the four-year lookback (comparing five years total), you and your leaders may want to begin to not only look at inflation’s impact but also adopt the language of inflation-adjusted dollars. (I recently wrote an article on this that you can read here.) This may change the narrative of how well your church is doing financially. To say, “We are back to where we were at the beginning of 2020 -- before the pandemic” – does not accurately report the value of dollars in 2023 to provide for mission and ministry. This also needs to be tactfully and tenderly interpreted to your members and other donors. Even a congregation of “people on fixed incomes” should realize that 2023 brought a cost-of-living 8.7 percent increase in Social Security payments to seniors. The reality is that the dollar amounts the church received in previous years won’t provide the same level of ministry to the community, and your church’s ministry will have to contract instead of grow. This is the reality that leaders and members should talk about, and speaking in terms of inflation-adjusted dollars will help make that reality clear.

4. ASK WHERE TECHNOLOGY CAN MAKE FUNDING YOUR MINISTRY MORE EFFECTIVE AND LESS EXPENSIVE. I wrote, in an article on March 11, 2020, about how the advent of COVID-19 would officially end the debate about churches providing online giving. I thought that was a given. Churches that had electronic giving in place (and especially programmed recurring giving) were in a much better position to weather the financial stress of what became a worldwide pandemic. To my surprise, I still talk to churches that resist electronic giving. They say their main reasons for opposition are the costs and fees. I remind these churches about the cost of offering envelopes (about which I have never heard complaints). Most churches provide envelopes to members, even though some church members have stopped giving. I remind leaders that with online giving, churches pay a fee only when folks actually give! In addition, many online giving platforms offer timesaving and expense-saving add-ons that allow churches to download contribution data directly to compatible church software; or there are church management modules on the same platform as electronic giving! Digital, emailed quarterly reports of giving may be tailored to provide stories of the church’s impact and to remind donors of the importance of their contributions. As churches move their bill paying to online banking, they experience diminished postal costs.

5. STUDY BUILDING AND REAL ESTATE ASSETS TO DISCOVER HOW THEY MIGHT GENERATE FINANCIAL SUPPORT FOR MINISTRY AND MISSION. Amid suffering and anxiety, the pandemic did give the church some important lessons. We can still be the church, even when we can’t use our buildings. Leaders of churches large and small adapted to this reality, and we found ways to provide meaningful worship, Bible studies, pastoral care, youth engagement, fellowship, and community. In a time when finances were uncertain, saving the costs of heating and cooling and other expenses was, for many, a lifeline.

Discipleship Ministries, one of thirteen general agencies of the United Methodist Church, asked staff to work from home because of the pandemic. After several months, we realized that working from home was a sustainable model. Other church agencies have had similar experiences. Nashville agencies now share building spaces and are putting previously necessary real estate on the market and using proceeds to help fund our missions of resourcing local churches and annual conferences. This experience leads me to offer this idea for local churches to consider: Can your church’s buildings and real estate assets be leveraged to better support mission and ministry? Are organizations in your community looking for office space? Are there opportunities to make income from parking spaces? Can worship space be shared with other congregations? Most importantly, are there ways you can use your building and real estate assets to communicate that your church is not present for a select few, but in service and in mission with the whole community?

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