In September of 2022, Pew Research published a report showing that about 64% of Americans (including children) consider themselves Christians. In today’s polarized American society, getting 64% to agree on anything should be a cause for celebration. However, that statistic is less encouraging considering that just 50 years ago, 90% of Americans considered themselves Christians. The report goes on to show that the rise of the “nones,” those with no religious affiliation, rose to 30%. Pessimists may see these alarming statistics as part of the continuing descent of post-Christian America, while optimists see this as a fertile soil to spread the Gospel. Regardless of how you frame the information, fewer people typically means fewer donations for many churches.
But wait, there’s more. Dwindling attendance is not the only issue churches face. The June 2023 CPI (Consumer Price Index) data shows that even though costs are down from the June 2022 peak of record-high inflation, the average family continues to struggle to make ends meet. Couple high inflation with over $17 trillion (with a “t”) in U.S. family debt, and many churches face a recipe for financial challenges.
Many churches facing the harsh reality of the current financial landscape are looking for strategies to trim the budget. Since every church’s situation is unique, there is no one-size-fits-all solution. That’s why it’s best to evaluate the severity and potential solutions through a simple grid consisting of long-term, short-term, and life support.
Reducing the budget is never fun. It involves the tedious and emotionally challenging process of evaluating what is and isn’t working. But it’s also an opportunity to reevaluate the effectiveness of ministries and the efficiency of how the church operates. Long-term decisions usually mean the end of ministries or processes.
Ministry: Churches love to create new and exciting ways to further their mission. But churches aren’t always as good as ending ministries that no longer fit the mission or simply are not producing fruit. For example, churches still funding the cassette tape ministry and buying new duplicators when everything is online need to evaluate the fruitfulness of this ministry, even if the Senior Pastor’s wife leads the ministry. Evaluate every ministry based on its fruitfulness and fit in accomplishing the mission – nothing is off limits.
Operations: Church budgets often have duplication of supplies. For example, several groups in the church use coffee, creamer, cups, stir sticks, lids, etc. They usually budget separately and keep their stash of supplies locked away somewhere. Eliminating this kind of duplication may be a long-term solution to an age-old problem. Are there ways to make more efficient use of the church facility? Perhaps there is a way to combine several ministries spread out over several nights into one big ministry night and save on utility costs. Look for long-term changes that have a significant impact.
Sometimes, churches need to buy some time while attendance and donations catch up with the budget. In those situations, some short-term solutions may fit the bill. It’s less drastic than permanently eliminating ministries as the long-term solution but still requires evaluation and hard conversations.
Ministry: Churches dealing with lower-than-expected attendance may need to make short-term changes until attendance returns. For example, instead of hosting three services that are not full, eliminate a service. Fewer, fuller services can quickly build momentum and cut costs. Or, where appropriate, combining children’s or youth classes may be the solution for a short-term cost-saving measure.
Operations: Fewer people means less consumption of products like paper towels, toilet paper, seat covers, etc. Keep inventories lean. Cut back on non-safety vendor use like window washing. Look for ways to temporarily suspend costs while maintaining a safe and clean environment to worship.
No church wants to find itself in a position where the costs to operate far exceed the donations. This stage requires drastic measures to keep the church viable, including hard conversations with the staff and transparency with the congregation.
Staff: It’s always challenging to consider reducing pay, hours, or even positions, especially concerning beloved church staff members. Churches in this position must evaluate all options. Let’s quickly address some thoughts from the 10,000-foot level.
- Avoid across-the-board reductions. It may seem fair on the surface, but there’s so much to consider – like minimum wage, wage stagnation, and, more importantly, strategy. It’s not “fair” to reduce the compensation of employees performing at a high level while others are not.
- Use best practice metrics. When it comes to staffing, two metrics work together to give a clear picture of the health of the church: Percentage of Compensation to Total Budget and the FTE (Full-Time Equivalent) to Congregation Ratio.
- Be professional and generous. The church must be as generous and compassionate as possible during the separation, but that doesn’t mean dragging out the decision to avoid an uncomfortable situation. Be professional, prepare all the required paperwork in advance, and provide an accurate final pay.
Creativity: Look at every option, such as renting or selling the church facility. Another option, while logistically and sometimes culturally challenging, is a merger with another church that may further the mission and give both churches the financial backing needed to get through a difficult time.
When financial difficulties arise within the church and budget cuts are necessary, these strategies may help clarify the church’s situation and the appropriate steps to get through the turbulent times.short url: