Our financial secretary called. “Pastor, we have more bills this month than money to pay them. What do I do?”
I was young and ambitious. I had pressed the board of our small church for an aggressive ministry budget. I hadn’t expected an economic downturn to thwart my one-year plan to single-handedly fulfill the Great Commission. Then I remembered the advice a board member gave me on the night I proposed our budget.
“You know, Pastor,” he said, “my father always taught me that if your outgo exceeds your income, your upkeep will be your downfall.”
It’s been almost 20 years, but my hands still shake when I remember picking up the phone, calling the board, and telling them that we were running in the red.
Seldom do pastors have to worry about what to do with extra resources lying around the church. The problem is more month at the end of the money than money at the end of the month.
After pastoring several years and then becoming a church’s chief financial officer, I’ve found six ways to overcome an unexpected shortfall. Three of them involve increasing your income, and three of them involve decreasing your expenses.
The fastest, most painless way to resolve a budgetary crisis is to get more money. Every minister dreams of a day when the local millionaire shows up with a check. But in lieu of such serendipitous patronage, here are three ways to raise money quickly.
1 Share the need from the pulpit. While “begging for money” is considered by many the greatest faux pas any non-televised pastor can commit, an honest conversation with the flock is sometimes the best thing to do.
In the middle of a building program with a hard-line completion date and a public commitment not to borrow “one red cent,” we were facing a cost overrun pushing well into five figures. The money wasn’t in the general fund. It wasn’t in the construction account. It wasn’t anywhere.
Our pastor prayed and agonized and made a courageous choice: He took it to the people—on a Sunday morning! He humbled himself and told the whole congregation what had happened, why it had happened, and that we needed their help to complete this important ministry project.
The money came in within the week. And several visiting families joined the church afterward because, they said, “We had never seen a pastor exercise such humility and financial integrity before.”
When a congregation loves and trusts its pastor, it can take a dose of financial honesty now and then.
2 Use assets creatively. Many church leaders don’t realize the material blessings already in their grasp, or over their heads. The building itself is a potential income generator as a safe, comfortable, and rentable meeting place for local community groups. And while some ministries use their buildings full-time, most do not. That leaves a revenue-maker idle as much as six days per week.
Yes, you need to be selective in determining which groups use the sanctuary. A church will want to avoid renting to a group whose purpose is contrary to the church’s mission. A facilities-use policy will safeguard both the property and the reputation. But allowing the community to rent the facility can even advance a church’s mission.
Our church recently rented the main auditorium to a group from the local Coast Guard. Over 500 military people attended a mandatory leadership-training seminar and were consequently exposed to our walls, halls, posters, banners, and bulletin boards filled with messages of God’s love. In fact, one of the actors in last year’s Easter drama first came to our church for a Coast Guard seminar and came back the following Sunday out of curiosity.
3 Manage seasonal shortfalls with credit. Particularly if a church’s giving patterns tend to be cyclical (for example, falling off in the summer, resuming during the school year, and peaking at year-end), a short-term equity line of credit can float the budget through low tide.
A financial professional can help determine if a credit strategy is advantageous. Using credit can pay big dividends if it allows the church to continue a ministry or service project until the offerings pick back up.
If, however, the offering appeals fail, the building won’t rent, and the bank won’t cooperate, the other option is cutting expenses. Most churches have some fat in their operational budget. In hard times the fat has to go, but vital ministry has to continue.
But what is fat and what is not? I’ve found three additional criteria help the cost-cutting decisions.
4 Focus on core ministry. Core personnel and core operations, a church’s unique niche and calling to ministry, must be funded first. The fundamental mission of a church is no place to cut.
Our church faced a major financial crisis recently. In the same week that the property insurance premiums increased by 20 percent, the offering was down 18 percent. Our property manager was also expecting a check for the new floor buffer he’d been promised. Then we heard our missionary in Ghana just had four key staff members killed in a car accident, including one whose wife was at that very moment giving birth to their first child. What were we to do?
Part of our church’s core mission is planting churches in Ghana. We believe in missions and have committed to funding missionaries in that region of the world for years.
So we chose to buy the plane tickets for our church to be represented at the funerals and minister to our grieving brothers and sisters. Then we apologized to the equipment vendor, and told the insurance agent we would need extra time.
Hard choices, certainly—but it was important to the church’s integrity to keep our fundamental ministry effort intact.
5 Look for inefficiency. Often churches think they have to cut something, when they simply need to more efficiently manage what they have.
I consult for a charity that recently faced significant market losses in its endowment, causing a need to trim its operating budget. So we reconfigured the telephone service and consequently saved $200 a month. Putting timers on the air conditioners and assigning one person to “light patrol” (turning off lights in unused rooms) saved $800 per month in electric bills. Adjusting the property insurance deductible, changing auto insurance companies, and switching landscapers brought in another $1,000 a month. We saved $24,000 annually, money that had been in the budget all along, just by increasing efficiency.
6 Humble thyself in the sight of thy creditors. When a temporary shortfall makes paying bills difficult, contacting creditors before the bill is past due is better than ducking their phone calls or making them give chase.
One church I know faced a terrible cash crunch. They had over-extended their ministry and personnel budgets. They owed a particular vendor over $30,000—a lot of money for their body.
There was only one thing to do. I called the vendor and explained that we needed to work out a payment plan. The church would pay one third of the balance every 45 days until the debt was discharged. While not particularly overjoyed about the situation, the vendor was amenable.
The phone call allowed me to honestly explain, humbly apologize, and preserve the ministry’s reputation, which would have suffered greatly if the church had ignored the problem. And it saved the church from a collection agency or even a civil suit.
No one likes to cut the budget or ask church members for more. But when money is temporarily tight, prayer, vision, and a few good management strategies can stop your congregation from seeing red and budge your budget back into the black.
Stephen B. Box is chief financial officer of Life Church in Mobile, Alabama.
Copyright © 2003 by the author or Christianity Today/Leadership Journal. Click here for reprint information onLeadership Journal.
