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Home > Articles > Guiding Your Church through Financial Crisis
Guiding Your Church through Financial Crisis
Is your budget tightening up?
Church Central

Topics:Benevolence, Budget, Church board, Giving, Money, Stewardship
Filters:Church board, Finances, Financial officer, Treasurer
Purpose:Ministry
References:None
Date Added:April 07, 2009

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Less than one quarter into the year, most church budgets are running behind, and many have been forced to lay off staff or take other austerity measures.

While this kind of gloomy news has a ring of truth, the worst step a church can take amid the current financial crisis is drafting the treasurer to make a special budget plea, says a pastor and consultant who teaches generous giving.

"Nobody gives to the budget," says Brian Kluth, whose booklet on a generous lifestyle has sold 400,000 copies. "The other mistake churches make is tending to react rather than being proactive. They do nothing and then slash and burn, or cut staff, which hurts morale."

He says the two questions churches must answer:

  1. What are they going to do to help people maintain a confident, biblically-based outlook?
  2. How are they going to inspire generosity?
Four-step plan

Lately, churches have been calling Financial Peace University (FPU) daily, usually because of decreased giving related to job losses or fear of the unknown, says vice president Debbie LoCurto.

As part of talk show host Dave Ramsey's operations, FPU gives advice to churches that parallels Ramsey's emphasis on individuals shedding debt. LoCurto says healthy church budgets boil down to four steps:

  1. Save two to three months of operating expenses for emergencies.
  2. Establish a fund for large-ticket items (roof, heating system, van purchase).
  3. Eliminate all debt with the "debt snowball," where small debts are retired first and then larger ones.
  4. Set aside a percentage of savings for future needs, such as adding staff, starting a mission, or expansion.

As for mistakes churches make during an economic crisis, the most common are not equipping their families to be ready and not planning ahead as a church, she says.

"Another would be borrowing or using credit to make ends meet during this potential down time in giving," LoCurto says. She notes that churches that have sponsored FPU classes are not experiencing giving drops because their families eliminated debt and are still able to give.

Keeping perspective

Keeping a proper perspective helps, says Kluth, who cautions that the situation isn't as bad as is often portrayed. He bases that on initial results of a survey he started a month ago to gauge giving and budget patterns.

Of the first 1,000 respondents, nearly 47 percent said giving was up last year. And although 53 percent reported 2009 giving is behind budget, 37 percent were meeting budget and 10 percent were ahead of budget.

With his church presently running 10 percent behind, Kluth cautions that early-year results are not cause to fret. Not only is the first quarter traditionally the slowest, many congregations need a strong dose of hope, he says.

"Fear will grip people, and you have to help them move towards faith," says the evangelical pastor, who likes using the widow in 1 Samuel 17 as an example. "It's not about the budget and the economy, it's about the word of God and helping people get to a biblically grounded view."