None of us could have anticipated what this spring was going to be like when 2020 church budgets were being prepared last summer or fall. Yes, we are in unfamiliar territory. 

Two-thirds of self-identified church leaders say giving to their churches has dropped significantly since the COVID-19 pandemic became widespread nationwide in March—with sizable numbers reporting sharp declines of 50 percent or more.

According to national results from the State of the Plate survey in April 2020, about 64% of churches have experienced a down-turn in giving since Coronavirus hit the U.S., and 47% of them are down more than 20%. That is a significant decrease in funding and can cause stress on a church and its ministry. 

Clergy Financial Resources recommends that pastors and leaders “throw out the 12-month budget and switch to a 3-month budget.” They should start by prioritizing their ministries according to what they absolutely must-have. Ask these essential questions:

    • What the most important item and purpose of the church?
    • What does our church do best?
    • What is our focus?

The answer to these questions will help church leaders determine what’s essential to maintain and what other ministries and initiatives are things they “should have” or “are nice to have.”

Here are 5 tips to help manage the church budget: 

Increase Communication With Your Donors

  • The building is closed, not the church; it’s not a time for the church to go silent.
  • Even during social distancing, relationships are still important.
  • Make sure every member gets some contact every few days.
  • Stream a worship service, even it’s just scripture, message, and prayer.
  • Use social media to help people stay connected.
  • Get a free Zoom account to allow some groups to continue meeting.
  • Remind people of the church’s financial needs, but be sensitive to households that have lost income.

Assess Your Income Sources

  • List any automatic recurring giving (including those who give by bill pay) and encourage your leaders to become part of that group.
  • Interest income (from investments) will probably be less than before the pandemic.
  • Examine emergency or “rainy day” funds (yes, this qualifies) held by finance or trustees, being careful not to violate restrictions or designations.
  • Do an assessment of income and expenses for each quarter of this year and schedule an assessment at the end of the each quarter.
  • Consider donors who may have the capacity to give extra through these days.

Consider Expenses You Can Reduce or Eliminate

  • What are you not doing now that doesn’t need to be an expense?
  • What supplies or services can be put on hold or canceled?
  • Review building expenses; for example, church thermostats to minimize HVAC costs.

Identify Expenses That May Be Deferred

  • Check websites of vendors and lenders; many are offering reductions or elimination of late fees, which may change the priority of payments.
  • Could church vehicles not being used right now
  • What premiums can be reduced?

Prioritize Expenses and Establish New Procedures

  • Placing staff salaries at the top of the list says people are most important.
  • List next those things that will become bigger problems if they are not paid (penalties/interest/loss of coverage).
  • Expenses should still be authorized before they are paid. Set up ways to do that remotely.

We knows that while these steps sound simple and doable, they’re difficult to take in light of the impact that they can have on the lives of staff members and the life of the church. This pandemic-to-post-pandemic era is a time for vision and hope based on the fact that, while the church may look different in the months and years to come, those differences provide opportunity to learn and change. 

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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421-0101 
Fax: (888) 876-5101


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