Some experts predict a recession. Here’s how to prepare your church

July 14, 2022

The U.S. economy is in a perilous state—inflation is at a 40-year high, gas prices are at an all-time high, and some experts predict that we’re at the edge of a recession. People everywhere are feeling the impact of increasing prices and rethinking where their money goes.

For pastors and church leaders, this can feel like yet another obstacle in the way of their calling. They remember the COVID-19 recession in 2020 and the Great Recession of 2008, as well as the tolls they took on their communities. For example, in 2008 over half of congregations in the U.S. experienced declines in donations, resulting in more than 500,000 church staff layoffs or reduced salaries. At the same time, the number of requests for church assistance with counseling, cash, and housing increased.

As our nation prepares to face another financial slump, many church leaders are wondering, “Is our church ready to withstand a recession?”

Fortunately, there are lessons that can be learned from churches that overcame previous recessions. Let’s take a look at practical ways to prepare your church’s operations, community, and givers to not only survive a recession but thrive.

Preparing your church’s operations

Recessions may cause donations to decrease and inflation to increase the overall operational costs of your ministry. This can create a cash shortfall, leaving your church vulnerable to unforeseen circumstances and emergencies.

While it’s impossible to know for certain if your church will be adversely affected by the current economic downturn, it’s wise to be ready to confront challenges before they happen. Here are four steps to develop a financial strategy to ensure the organizational health and operational stability of your church.

1. Gather financial information

Understanding your church’s financial trends provides a historical perspective and can help you anticipate what is needed for moving forward during an economic downturn.

Gather three to five years’ worth of the following records:

  • Regular outgoing expenses, such as facilities, personnel, administrative, ministry departments, etc.
  • Short-term and long-term debt
  • Monthly incoming donations
  • The number of givers in your church
  • List of church departments & programs
  • Lists of paid staff

2. Compare the data

To discover how much current economic changes are affecting your church, make the following comparisons:

  • Giving—How much of a drop or increase in monthly giving are you experiencing compared to previous years?
  • Donors—Are there fewer or more people giving?
  • Paid staff—Has your human capital increased or decreased?
  • Departments & programs—How much have your departments and programs grown or shrunk over the past few years?

3. Plan

Discuss the impact of the recession with your staff and leadership and create a plan for moving forward. Times of financial crisis require making difficult decisions. This can create stress and cause tension. People are emotionally invested in their areas of ministry at your church. As your team discusses which programs to continue and which to pause, brace for potential pushback or conflict.

Changes won’t happen without your pastor and staff leading the charge, so getting team buy-in is crucial to your success. Here are some essential questions you can ask to get the discussions started:

  • What is the forecast for your church’s operating budget?
  • What are the biggest financial challenges facing your church?
  • Which programs are least essential and first to be cut?
  • Is there debt that can be consolidated or refinanced in order to save money?
  • What are the most pressing needs facing our community today?
  • How much can we afford to set aside for emergencies?
  • Which operating budget dollars (e.g. debt reduction, building payoff, etc.) can be redirected towards hands-on ministry programs that directly impact your congregation and community?

Prioritize which changes are most pressing and create SMART goals (specific, measurable, achievable, relevant, and time-bound) for before implementing your strategies.

4. Take action

Understanding your church’s current situation compared to previous years can be an eye-opening experience and spur your leadership into action. Creating a strategy to prepare for the coming financial season will allow your church to quickly implement changes and respond to the needs in your community.

Be sure to download your free copy of the ebook, Church Budgeting Guide, to discover best practices for good stewardship through practical tips and worksheets.

Preparing your church’s community

It’s important to acknowledge the impact of a recession on the well-being of your community.

Their anxieties include macroeconomic factors like high inflation, expensive gas prices, job market instability, loss of savings, 401ks, and so on.

Fortunately, your church can respond to their personal and financial needs by supplying resources and funding for things like:

  • Emergency housing assistance
  • Food pantry volunteers & support
  • Pastoral counseling
  • Job interview preparation (clothes, counseling, interview practice)
  • Financial planning assistance
  • Baby supplies
  • Emergency cash assistance

This is also a good season to teach on the theology of giving. Generosity and financial stewardship are important steps of the discipleship journey. It’s important to teach these biblical principles in order for people to understand that they’re not giving their hard-earned money to a building or just one person. It’s a sacrificial act with deep spiritual implications.

Many people lack basic understanding about personal finances. This often causes stress in their marriages, work, and other areas of their lives. Offer practical resources and classes on money management such as Financial Peace University by Dave Ramsey or Crown Financial Ministries.

Times like these when the world seems in turmoil are opportunities for the Church to shine brightest by sharing the love of Jesus and bringing hope through real-time action.

Preparing your church’s givers

People who give to your church need to know that donating their hard-earned money is making a real-life impact. Here are some practical steps to focus on what’s important to your donors during a recession.

Build trust through transparency

We’re living in the least churched culture in modern history. Reports of financial mismanagement and abuse have left people skeptical of giving money to a church. In fact, 64% of donors said they need to trust an organization before they donate. This makes building trust a required step for most people to feel comfortable giving to your church.

You can build trust by being transparent about your church’s finances and welcoming accountability. For example, consider having an annual budget meeting to show how donations were distributed. Let donors know that they will receive an annual tax-exempt contribution statement for their records.

Another powerful way to build trust is through storytelling. Let’s see what that looks like.

Share purpose & vision through storytelling

How can your community know that your church is helping people who are struggling if you don’t tell them? Sharing the real-life impact of your congregation’s generosity brings meaning to their giving and casts a vision of what is possible.

Encourage your team and volunteers to share testimonials they experience or hear from others. Share these stories during your services, on your website, and on social media. This will inspire others to do good and help people identify with your church’s purpose and mission.

Encourage recurring giving

One of the best church tools against financial instability is recurring giving. Just as its name implies, recurring giving is an online giving option to repeat a tithe, offering, or gift on a weekly or monthly basis.

Donors who choose this option give 42% more every year than occasional donors, and they’re also 80% more likely to keep giving throughout the year. It’s also a helpful option for receiving pledged giving as online giving is safer and more consistent than receiving paper checks or cash. Recurring giving also makes it easier for your church to forecast incoming donations and plan your budget more accurately.

Be open & honest with your donors

Nobody enjoys talking about financial struggles, especially in public. However, your church is a family, so it’s okay to let your members know of financial realities the church is facing. It’s also important to not assume that people will give automatically or without a prompt. This requires regularly asking for people to bring their tithes and offerings.

Recognize their sacrifice

We’ve all been taught the importance of saying “Thank you” to someone after receiving a gift. The same principle applies to your church donors. Take time to thank your congregation for their generosity. Consider sending a church donation thank-you letter, email, or text expressing your gratitude.

Don’t lose hope

The good news is that every economic downturn eventually ends, and while it may take some time, churches and their finances can rebound. By realizing that this is just a season and implementing these financial practices, your church can stay healthy and grow your impact.

Consider it pure joy, my brothers and sisters, whenever you face trials of many kinds, because you know that the testing of your faith produces perseverance. Let perseverance finish its work so that you may be mature and complete, not lacking anything. —James 1:2–4

Over 16,000 churches and organizations use Subsplash to engage, know, and grow their congregations with the best engagement tools available, such as online giving, mobile apps, church websites, church management software (ChMS), live streaming, and much more!

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