Ministry Matters: Lovett H. Weems Jr.

ARTICLE: Resetting Financials to Thrive, Not Just Survive

Thu, 14 Jun 2012 15:10:38 GMT

By Lovett H. Weems Jr.

The aging membership of many congregations has been a concern for many years and for good reason. The death rate among United Methodists in 2010, for example, reflected a 35 percent increase over 1968, even though the death rate has leveled off in recent years just as the national death rate has. While low death rates are projected to continue for a few years, around 2021 death rates turn upward and will continue to rise until mid-century. The death rate will become higher than at any time since the 1940s, prior to many medical advances that lowered death rates. (Read my previous article about this “death tsunami.”)

Countless churches have fewer worshipers today than they did ten or twenty years ago. Most of them, however, have budgets as large as or larger than they did when they had more constituents, even after adjusting for inflation. Such a congregation manages in the early years of decline due to the greater donations of their fewer participants. As things get tighter, the lowering of expenditures combined with greater per capita giving maintains financial stability.

A church then gets to a point at which the attendance has declined so much that making the budget each year becomes the preoccupation of the church and its leadership. Each year they search for a new source of income or a cut in spending so they can manage to make it through the year.

While such a church can continue to live one year at a time doing whatever it takes to get by, it can instead acknowledge that the previous financial baseline is no longer realistic. It must make the difficult but ultimately life-saving decision to reduce the financial baseline to one that is more realistic for the new circumstances. It is from this new and more appropriate baseline that the church can begin to build strength for the future.

The purpose of the reset is partly caused by money, but its purpose has to do with much more than that. The reason for the financial reset is to free our preoccupation with money so that we can focus on reaching people for Christ. Energy previously sapped through maintaining financial survival now can go towards outreach and ministry.

Congregations with wise leaders recognize the emerging situation described above while there is time to reset their financial baseline. In doing so, they still have a critical mass of faithful members who can provide the foundation for their now smaller, more vital chapter. It is during the next five to ten years that we have the greatest opportunity to respond faithfully and wisely to this critical calling—before we lose a large portion of current members through death.

Resetting the Financial Baseline

To reset the financial baseline in congregations, laity and clergy must first assess what is the current status of the local church. They must name their reality. Some questions include:

What are the patterns from the last five years? Is the gap between budgeted income and actual income widening?

Churches commonly receive less money than that projected in their budgets. However, churches need to pay attention to the gap, if there is one, to see if it grows greater each year. How much impact did any budget shortfall cause? Modest shortfalls normally make no differences while larger shortfalls result in reduction in staff, programs, or payment of apportionments.

Is the effort required to meet each year’s budget increasing?

Congregational financial health requires careful attention in the best of circumstances. Here the goal is to see if there is any change taking place in the proportion of time and energy required to meet the budget each year. Is inordinate effort and attention required to meet the budget?

Has attendance gone down as the budget continues to rise?

If this is the case, it means fewer people must give more money each year. That is precisely the pattern among denominations that is now beginning to break down.

How much of the giving in each of the past three years came from persons age 70 or older?

This percentage could be called a church’s “vulnerability index.” A portion of increased giving in churches in recent decades came from an increasing number of members who are both older and loyal in the use of resources they accumulated over a lifetime. Most of them did not start out giving at such levels. They came to their current level of giving usually through a combination of growth in discipleship and increased financial resources. Generous givers of the future probably will follow the same route. Therefore, it is short-sighted ministry to neglect reaching new people and teaching stewardship because the church already “meets its budget” through the generosity of a few members.

Are we drawing from endowment or reserve funds at unsustainable levels?

Some churches have funds for which an invested principal makes possible funds for ministries through earnings. Proper investment policies and spending rates are needed to ensure that the principal is replenished at the rate of inflation with a sustainable flow of funds for ministries. Most endowed funds have policies or by-laws that severely limit the ability of the church to draw from the principal except in the most extreme circumstances and when following detailed steps. Increasingly, despite such requirements, churches are drawing from permanent funds for current needs. Likewise, reserve funds are increasingly used to cover recurring operating deficits rather than true emergencies.

Are we deferring so much maintenance that we are not likely ever to catch up?

One common way for congregations to balance budgets in difficult times is through the accumulation of deferred maintenance. Each congregation must consider if this is the case. Is there a systematic plan to fund at least a minimal level of ongoing capital renewal and replacement needs of the church facilities in addition to routine cleaning and maintenance?

For some churches, long-held assumptions may need questioning if year after year short-term solutions do not address the financial dilemma. These are hard considerations. Some might have a historic and beloved building they no longer can maintain. Others may face the prospect of a less-than-full-time pastor. Another church may need to explore merger. These big decisions come only after many other options prove impossible.

The trade off for such hard decisions is gaining freedom to focus on what is required in order to share God’s love in Christ with more people, younger people, and more diverse people. Keeping the church’s spending within income will free it from the time, energy, and focus required to maintain income at unrealistic levels. Just as cumbersome armor did not fit David in his struggle with Goliath, a much smaller church increasingly finds the clothing of previous eras more of a burden than a blessing. Just as David found strength in what fit him, the church today lightens its load not to retreat, but to engage the daunting challenges to God’s reign in lives, communities, and the world. We reset not to survive but to grow toward that reign.

Survival is Not a Worthy Goal

Some suggest that many churches are only worried about their financial well being because they do not want to close. The survival of any congregation is not a worthy goal. However, every congregation should always do their ministry in such a way as to sustain its mission over time. If your church has a faith to proclaim and a task from God in your community, then it would be irresponsible not to put a high priority on finding ways for such a ministry to continue. In the difficult years ahead the question of survival will challenge many of our churches. Will you already be stretched to the limit in order to survive financially year by year? Or will your church have reset its baseline and begun to emerge as a vital and growing witness to new constituencies?

________________________________________________

For more on the changes facing the church in coming decades—demographic, financial, and more—read Lovett Weems' recent book, Focus: The Real Challenges That Face The United Methodist Church. And, check out his online newsletter, Leading Ideas, available free at www.churchleadership.com.

ARTICLE: The Coming Death Tsunami

Wed, 05 Oct 2011 20:55:37 GMT

By Lovett H. Weems Jr.

In the past several years, the world has witnessed the horror of two massive tsunamis, first in Indonesia and more recently in Japan. The loss of life and devastation surpass what most can imagine. Those in other parts of the world are now learning about the fear with which our Asian neighbors have lived for centuries as they have experienced “minor” tsunamis and the terror that accompanies even small earthquakes and tsunami warnings.

In the Scriptures, prayers, and hymns of our tradition, our psalmists and poets described dire situations in the most compelling words they could find—a flood of mortal ills, as in the summer drought, a famine of compassion, life shaken as by an earthquake. Some images have become so familiar that we may no longer be moved by these stark words. Even so, one must be cautious when using analogies or metaphors that mirror such tragedies, recognizing that the effects of physical disaster differ from the results of the dire situations writers attempt to describe.

So it is with the language of a death tsunami. American death rate statistics show we are in the middle of a plateau of 8.9 deaths per 1,000 people. What follows the plateau can be called a death tsunami, and will have a major impact on many churches in the United States. This language is harsh and difficult to hear, as is the potential catastrophe challenging our church.

It is predicted that between 2019 and 2050, there will be more deaths and a higher death rate than at any time since 1940s when medical advances such as antibiotics were introduced.
The total number of deaths each year is predicted to go up every year until 2050 as Baby Boomers pass away.
It is predicted that there will be 50 percent more deaths in 2050 than in 2010.
The majority of these deaths will be older non-Hispanic whites and African Americans.

The Dilemma

Countless churches have fewer worshipers today than they did ten or twenty years ago. Most of them, however, have budgets as large as or larger than they did when they had more constituents, even after adjusting for inflation. Such a congregation manages in the early years of decline by the greater giving of their fewer participants. As things get tighter, the lowering of expenditures combined with greater per capita giving maintains financial stability.

A church then gets to a point at which attendance has declined so much that making the budget each year becomes the preoccupation of the church and its leadership. Each year they search for that one new source of income or cut in spending so they can manage to make their plan. They also realize that even these yearly heroic efforts will not be enough going forward as they note the high percentage of their annual giving that now comes from those over age 70.

At some point along this journey, such a church has to make a basic decision. One option is to continue to live one year at a time and do whatever it takes to get by—even if necessary decisions harm long-term viability, and even knowing the church may, in the not too distant future, close.

But there is another option taken by some churches facing these circumstances. The second option is to acknowledge that things are not the same as in years past, and the previous financial baseline is no longer realistic. The church makes the difficult but ultimately life-saving decision to reduce the financial baseline to one that is more realistic for the new circumstances. It is from this new and more appropriate baseline that the church can begin to build strength for the future. One of the reasons churches tend to do better after such a financial recalibration is that energy previously sapped through maintaining financial survival now can be spent for outreach and ministry.

A Window of Opportunity

Congregations with wise leaders recognize the emerging situation described above while there is time to reset their financial baseline and still have a critical mass of faithful members who can provide the foundation for a new smaller but more vital chapter. Life can continue about as it has in the last ten years with adjustments around the edges to get through yet another year.

But a major financial reset is required over the next five to ten years to position the church for seismic changes ahead due to the lack of alignment between the makeup of the denomination's membership (age and racial) and the realities of today's United States. As with any organization facing the future after 45 years of unabated decline in its constituency, there must be a stepping back to a new and lower baseline in order to move forward. Otherwise, all energy goes, of necessity, to maintaining the old unrealistic financial baseline.

Survival is Not the Goal

To talk of survival does not mean that survival is an end in itself. The survival sought is not for an institution and certainly not for institutional forms or entities. Church leadership is a response to God’s love and action in the world revealed most clearly in Jesus Christ. Christian leadership is a channel of God’s grace as it seeks the fulfillment of God’s vision, and such leadership emerges out of the history, beliefs, and traditions of faith communities. While religious leadership always has a theological beginning, a theological grounding will not ensure either the discernment of or fulfillment of God’s vision. The task for each generation is to help the faithful discern an appropriate engagement to meet changed circumstances, new realities, and emerging needs. To do so, they must have an accurate assessment of those circumstances, realities, and needs. To the extent that leaders are able to accomplish these tasks, there is vitality and renewal within the religious tradition.

Faithful leadership understands the church not as an institution to serve and maintain but rather as an embodiment and instrument of God’s aims revealed in Jesus Christ. The church indeed is to be Christ in the world, called to embody Christ’s presence and participate in God’s work of healing, reconciliation, redemption, and salvation in the world. Denominations become yet another of the “earthen vessels” in which the church seeks to carry the gospel. As with all such vessels, there is a temptation to focus on the container and not on the rich contents.

The time to make choices is now--while there are still choices to make. Otherwise, circumstances will very likely make the choices for us in the future.

Gross, Not Net

David McAllister-Wilson, president of Wesley Theological Seminary, makes an important point in saying that in the coming years, churches should focus more on the “gross numbers” than the “net numbers.” Normally this advice would make no sense. If a church receives twenty-five new members in a year while losing fifty members, it would generally be meaningless to focus on the gross gain of twenty-five rather than the net loss of twenty-five. But just as gross figures can be deceptive when viewed apart from the net, so also the net figures may be equally as deceptive in the coming years.

Because of the coming death tsunami, it may be very difficult for churches to show net gains in a host of categories. Looking only to the net numbers will not only lead to discouragement but may tell a false story of the spiritual energy of the congregation. Churches have relatively little control over losses, especially deaths. Churches have tremendous power to affect gains. So, even if the net figures for professions of faith minus deaths or new members minus lost members are negative for several years in a row, as long as the gross numbers for professions of faith and new members consistently increased during those years, there is reason to celebrate. The increasing gross numbers represent the church’s spiritual vitality far better than the net figures. And it is precisely this positive energy needed for the years ahead.

Excerpted from Lovett Weems’ Focus: The Real Challenges that Face the United Methodist Church, part of the Adaptive Leadership Series from Abingdon Press. Used by permission. Download a complete chapter in PDF format below.

Available for preorder at Cokesbury.com.