Resetting Financials to Thrive, Not Just Survive

June 14th, 2012
Image © Johnny Grim | Flickr | Creative Commons

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  

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