It’s inevitable: sooner or later, your church will face unexpected financial difficulties. And when disaster strikes, you’ll want to have a solid plan in place for navigating challenging waters and keeping your church on track for a brighter future.
Here’s what to know about crisis stewardship and how you can effectively plan for financial trouble.
What Is Crisis Stewardship?
If you’ve ever been part of a group or community during hard times, you probably know the importance of good leadership — or the harm caused by incompetence. Crisis stewardship aims to mitigate damage and offer strategic direction during and immediately following a crisis.
Leadership can make or break a community, especially in the wake of a disaster. That’s why it’s so important to choose people who not only display strong leadership qualities but also regularly prepare for the unexpected.
Planning Ahead
While some catastrophes are unavoidable, you can take certain steps to reduce the odds of financial trouble. Here are some tips for preparing your church for crisis.
Create a Financial Buffer
From a very early age, we’re taught to save our money in case something comes up that we need to pay for. When running an organization, it’s especially important to establish a financial buffer to prepare for unexpected expenses. You could set aside funds in a reserve account to be used only in times of need.
Diversify Your Income Sources
Reliance on a single source of income can be risky for churches. Rather than simply asking for tithes and offerings, consider renting out church space for events, hosting community classes, or looking into religious-based grants. There are many different ways to make money in the modern world, so feel free to get creative and explore untapped avenues.
Make a Crisis Budget
Along with creating a buffer, you’ll want to have a budget in place for emergencies. In a financial crisis, this budget may just save your church and prevent financial ruin. Your budget should prioritize essential expenses, such as utilities, staff salaries, and maintenance costs.
Nonessential expenditures can be reduced or temporarily halted. The key is to have a clear understanding of what can be cut without impacting the core functions of your church.
This type of budgeting is likely the reason 91% of pastors reported that their churches met or exceeded their expenses during the COVID-19 pandemic. If your church is to weather similar storms, you need to start planning now.
Strengthen Community Relationships
Strong community relationships can be a church’s most valuable asset during tough times. By engaging with the community, you can foster a sense of ownership and support among church members. This can lead to increased donations, volunteer work, and other forms of assistance when needed.
Invest in Financial Education
Prevention is always better than the cure. By educating leadership on smart financial management and best practices, you can set your church up for greater financial success. Providing education and training for those in charge of your church’s operations can really pay off in the long run.
Make sure your leaders have a robust understanding of basic financial principles and know the do’s and don’ts of church stewardship.
Conduct Regular Financial Reviews
Catching issues early on can prevent disaster down the road. Be sure to review your church’s financial status regularly, noting any irregularities in spending or income.
If you notice something unusual, act immediately. Work with leadership to develop an emergency correction plan so you can address the problem as soon as possible.
Encourage Planned Giving
Make planned giving events a priority. Whether it be through bequests, gifts of stock, or other donations, seek contributions that can provide significant financial support to your church.
How to Manage a Church Financial Crisis
So you’ve found yourself in a financial pickle. Despite your best efforts, you’ve hit a bump in the road. Where do you go from here? Here are some key strategies for tackling any financial crisis and coming back stronger than ever.
Understand the Nature of the Crisis
First, it’s important to thoroughly assess the situation; you need to understand the nature and extent of the problem. Analyze your financial statements, identify areas where expenditures exceed income, and pinpoint any external factors, such as economic downturns.
Foster a Culture of Transparency and Trust
Transparency is key to successful conflict/crisis resolution. Communicate openly with your congregation about the church’s financial status, explaining both the causes of the crisis and the steps being taken to address it. This builds trust and encourages members to be part of the solution.
Consider Budget Restructuring and Cost Management
If your church is experiencing a major crisis, you may need to reexamine your budget and cut unnecessary or less important expenses. Identify and reduce (if not totally eliminate) nonessential expenditures from your budget. Focus on essential ministries and operations.
Implementing strict cost control measures can prevent further financial strain. For example, you could negotiate better rates with vendors, lower utility expenses, or postpone noncritical maintenance projects.
Involve Your Congregation and Community
In addition to educating your congregation, consider involving the wider community. You can conduct fundraisers or solicit donations through a myriad of channels. For example, you could organize a bake sale or seek sponsorships.
Mobilize volunteers and encourage them to share ideas on how to make money. Putting several brains together is bound to yield positive results and set you on the path to recovery.
Leverage Technology
Ah, the wonders of technology! Love it or hate it, it’s a part of the modern world, so why not use it to your advantage? Financial management software can provide real-time insights into your church’s financial health, enabling better decision-making and aiding in efficient resource management.
Collaborate with Experts
There’s no shame in seeking professional advice. While you may be tempted to handle things internally, a financial advisor or accountant can offer valuable advice and direction for getting back on track.
Be Adaptable
Embracing change and flexibility is crucial in times of crisis. This might mean altering long-standing traditions or finding new ways to conduct ministries that are more financially sustainable.
Be Mindful of Ethical Considerations and Spiritual Guidance
Church stewardship must be conducted according to the highest ethical standards. Avoid making any decisions that could compromise your church’s integrity or mission.
Most importantly, seek spiritual guidance. Delve into prayer and Scripture for wisdom on leading your congregation through difficult times and making it to the other side.
Final Thoughts
Like most organizations and families, financial challenges for churches are inescapable, especially in crisis situations. An important part of church stewardship is crisis stewardship — preparing for and lessening the impact of a crisis when it hits. But how? With a sound financial plan, a solid budget, and a strong community. These factors can help your church weather storms with transparency and flexibility, along with expert help, community support, and strong spiritual guidance. Get insights on church stewardship with our eBook, The Complete Guide to Church Stewardship. Learn how to tackle church financial issues head-on and steer through storms successfully.
Vanco
Vanco is a trailblazer in the world of digital giving, dedicated to empowering faith-based organizations with effective financial solutions. For over 20 years, Vanco has been at the forefront of creating innovative giving tools, earning the trust of over 25,000 churches and faith-based groups. To learn more about Vanco’s church giving tools and how they seamlessly partner with ACS Technologies’ church management software programs, click here to learn more.
