FINANCES IN POST PANDEMIC CHURCH #2

          This blog will continue from last week’s blog, including the remaining financial lessons from the “Leading Ideas” blog offered through churchleadership.com. I am continuing to cite that blog, but am paraphrasing much of what I learned.

1.   Reassess expenses. This is something that should be done regularly. However, with over a year of the pandemic, and things starting to change because of it, now is the time to look at what changed and what didn’t, what needs to remain and what doesn’t. Are there changes that should be permanent? Once you’ve answered these questions and reviewed the changes, look at the expenses, building use, staffing patterns. What are the changes that should be considered?

2.   Have a realistic budget. How many times have we set a budget that either doesn’t balance, or has an income line called “short fall” or “faith line”? If you ask me that question, I would be embarrassed by my answer. Too many to count, perhaps? Obviously, we hope for the best: (a) that more people will start coming to church; (b) that people will start giving more; (c ) that there will be fundraisers that will come in the next year. I absolutely believe that money will follow ministry, but just setting an unrealistic budget and “hoping for the best” without making any realistic changes or predictions, simply sets you up for failure.

3.   Maintain (or set up) a reserve fund. A reserve fund isn’t an endowment fund, nor is it simply using the “left over funds” from the prior year. A reserve fund is the result of a deliberate and conscious decision. You sometimes hear it called an emergency fund. Families should have an emergency fund set aside. Professionals think an emergency fund should be enough to cover expenses for three months. Churches should do the same. Of course, there is nothing you can do that will make you disaster-proof. Who could have anticipated a pandemic, for heavens’ sake? But there are boilers that won’t start, roofs that leak, and other issues that affect income by reducing it or affect expenses by increasing them. Set up a reserve fund. Budget for it. It will help keep you from going “over the edge” when something unanticipated happens.

4.   Know where you stand. Don’t be caught off guard when something happens. If you keep an eye on where you stand, keeping track of trends, ratios, key indicators, you will be better able to respond to something going on. If you simply wonder why revenue is decreasing, you will lose the chance to respond to it. Look at your giving trends: are there fewer people, are people giving less, are less people giving, etc. etc. Look at your staffing and expenses: do they keep increasing without an increase in ministry, are there positions that aren’t appropriate for current ministry, etc. etc. Establish systems that will help you keep track of what is going on and respond before it’s too late.

          Something I’ve said when asked, if that the majority of the problems that we are facing as churches during and post-pandemic were not caused by the pandemic. They existed before any of this happened. The pandemic forced us to confront the issues and not continue to ignore them. There was nothing to fall back on. Manage what you have wisely, engage your givers, and look at new approaches to your financial picture and policies.