The normal business routines of the local church have certainly been disrupted the past few weeks. Our new normal includes a global pandemic, stay at home orders, and congregations unable to gather in person to worship together. Our personal lives and our corporate lives have been changed—at least for a while.
While this disruption has caused a tremendous amount of financial stress for our churches, I want to encourage you to use this time of chaos and uncertainty to improve your core ministry business to provide greater value to those you serve. To help you do that, here are 5 financial tips to help you better serve your church and community.
1. Evaluate your spending. An important and immediate step for churches is to reduce expenses to help offset any revenue decrease. Concentrate first on discretionary expenses which have a tendency to “creep” over time. I would suggest you immediately look through your monthly and recurring expenses to identify items that can be reduced with minimal effort. Do you still need those monthly subscriptions to magazines, newspapers, and website services? Could the church put a hold on staff credit cards without prohibiting ministry?
Also, look for expenses that are based on providing comfort or ease of use. Maybe you’re paying a higher price for a premium service, when a lower-tier service will suffice. Next, don’t forget to review expenses that can be cancelled due to your staff working from home. Have you adjusted your office thermostat, made sure lights are turned off, and unplugged unnecessary appliances? Do you have monthly mileage reimbursements that are no longer needed as your staff isn’t allowed to travel?
Lastly, keep an eye on interest rates and compare them to your current mortgage rates. It may make financial sense to refinance an existing loan to reduce overall debt payments but only if you can still make the monthly payment.
2. Create a strategy to manage your emergency fund or contingent reserves. In this current environment, it’s become increasingly clear why an emergency fund is essential to the health and strength of any organization. If you don’t have a reserve fund, you are most likely feeling some stress, but it’s not impossible to create margin in your current finances. As you determine which expenses will be cut or reduced, allocate a portion of those savings to reserves.
I normally recommend saving three to six months of expenses in your contingency reserve fund. You may be required to tap into your emergency fund to help navigate this time, but I encourage you to keep an eye on your reserves and make a plan for additional expense adjustments if you need to deplete your reserves. For example, at 3-months of reserve, what non-essential programs will be cut? At 2-months of reserve, will hiring be frozen or salary increases postponed? At a 1-month reserve, will staff hours be reduced? By determining and articulating the strategy for maintaining reserve funds, the entire staff will recognize the importance of intentional spending.
3. Cultivate and nurture new donors. The most pressing issue for churches and ministries right now is revenue. A church’s cash flow is heavily dependent on tithes and offerings. If the economic downturn continues, revenues will decrease.
Nurture your current givers by ensuring that their method of giving is seamless and easy.
A recent study found that 68% of church attenders wanted digital giving options. You can cultivate new donors by offering an online giving solution. Some great options include AGCU’s Generush, Faithlife Giving, and Tithe.ly. If your ministry is new to online giving, make sure someone is available to walk your members through the process.
Encourage your church members to participate in worship through their giving. Use social media posts, announcements during your online services, and other communication means to remind your donors to keep giving even though you aren’t meeting in person. Highlight testimonies about how God has honored people’s faithfulness though giving. Remind them about God’s promised blessings to those who are generous is giving.
4. Revisit your mission statement and look for new opportunities. Your mission statement will remind you what is important. Your mission defines your ministry. In the midst of chaos and uncertainty, it can be easy to lose sight of your ministry goals and get sidetracked on things that aren’t essential. Is it still relevant? If you were starting today, what would be the purpose of your ministry? Meet with your ministry team and discuss your mission and identify the top one, two or three things that are critical to focus on right now.
Reduce or eliminate programs that don't align with mission. We call this mission creep. I would suspect all organizations have mission creep. When times are good, and revenues are strong, it is easy to add ministry programs that have value but are not essential to the overall mission. Additionally, we sometimes continue programs that are no longer useful or effective because “we’ve always done it that way.” Now is the time to have an honest conversation about all your programs and decide which are essential and which can be eliminated.
Another reason to eliminate programs that are no longer useful is to have the margin and capacity to add new programs and new ministry opportunities. While having a website and online services has been an important topic for a number of years, I don’t think anyone could have imagined that all churches would need to find a streaming solution at the same time. For many, this is a new ministry opportunity.
This pandemic will create new ministry opportunities for churches that desire to meet the needs of their community. I recently heard about the great need for churches to minister to family members sitting in the hospital parking lots because the hospitals have restricted access to all guests. They don’t want to go home, but they can’t go in, so the church can use this opportunity to connect and minister to those that feel helpless, isolated and fearful.
For more ideas on new ministry opportunities, read this Influence Magazine Article.
5. Be familiar with new legislation and assistance for employers and employees being passed by Congress. If you do have to lay off employees, help your employees navigate unemployment benefits or paid time off being offered in these new stimulus packages.
Two new benefits for paid leave include the which provides paid leave for an employee to take care of their child if a daycare or school has been closed due to a public health emergency like Covid-19. The second is the which provides paid leave for an employee that is seeking medical care for Covid-19 or is required to stay at home in isolation or quarantine. Much, if not all, of this mandated paid leave can be reimbursed by the federal government.
The $2 trillion CARES act signed into law on March 27 provides direct benefits to American workers, families and businesses, including churches. This economic assistance program for employers, employees and taxpayers includes small business loans to employers to help cover payroll and other operating expenses, deferred payroll taxes, unemployment assistance, and cash rebates/stimulus checks to taxpayers.
As you navigate these unchartered waters, I want you to know that the AG National Office is here to assist you. Our ministry leaders are creating relevant and timely resources for you at https://covid19.ag.org/. This new site contains news, training for ministry leaders, family devotionals, and free resources to help you serve and support your church through this difficult time.
As we continue in this “new normal”, I have been encouraged by Psalms 91 like so many in the Church. God is not surprised by what is happening. He is our refuge and our strength. Keep praying and know that we are praying for you. Do not fear, but be encouraged, because God is our fortress and place of safety. (Ps 91:2)
Rollie Dimos, CIA, CISA, CFE, is the Director of Internal Audit and the Center for Leadership and Stewardship Excellence at the AG National Office. As an auditor in the government and nonprofit sectors, Rollie has been helping leaders assess the strength of their organizational controls for over 25 years. If you have a question about this article, you can contact Rollie at email@example.com.
Rollie is the author of two books: Integrity at Stake: Safeguarding Your Church From Financial Fraud and Balanced Budget, Balanced Life. Using real-life fraud cases, Integrity at Stake helps churches assess their internal controls and minimize the risk of fraud. In Balanced Budget, Balanced Life, Rollie helps the reader create a personalized financial plan to achieve the balance between saving enough to live on and spending to enjoy a life worth living.