Church finances in and out of lockdown

Those of us who hold positions of responsibility in our churches will by now have started the difficult job of working out the impact of coronavirus on our churches’ finances. I am doing the same, and wondering what this will mean, both in the short to medium term and in the long run.

Like many, my church has a variety of income sources We are largely supported by donations, boosted by some letting and activity-based income. The donations are received both electronically and – to a somewhat lesser extent now – in cash. Many churches have suffered from cash not being collected, but we hope and pray that old-fashioned envelope giving will return when we can meet again. The loose plate cash and cancelled letting activity is money lost forever, which in my church means a 10-20% reduction in income.

In the medium to long term this will hopefully recover, but will we then suffer from reduced regular donations from people who have lost their jobs and perhaps fewer one-off gifts from those who remain in employment, but miss out on hitherto regularly-expected annual bonuses?

Staff costs are a significant item of church expenditure, compared to the much lower sums devoted to regular activities. Some small savings may have been possible by placing cleaners and internal staff on furlough. But ministry activity has probably never been busier and quite possibly involves additional costs for Zoom subscriptions and other IT support.

With income substantially down and expenditure at similar levels, how do we bridge the funding gap? Government support schemes for charities are very limited. Some may be able to get a Bounce Back Loan, depending on their bank’s view of the rules and how much ‘trading’ activity they can justify. If not, could or should churches seek support loans from members – or is this merely mortgaging the next generation’s future? As a grey-haired banker, I would strongly advise caution if considering borrowing to cover a revenue shortfall. It should only be done if the church’s trustees are absolutely certain of its future income streams. If it can somehow be linked to committed extra giving from members it may enable the church to retain key staff and maintain effective ministry until income recovers. If not, it will inevitably reduce its future ability to serve its members and its local community.

The key is to look ahead and plan effectively for 2021 and beyond. Like any church planning cycle, it must start with prayer and listening to God. What are we being called to do and deliver in our church community in 2021? Are there new opportunities that have arisen from the current situation? Do we have new converts to disciple, new enquirers to nurture, and a new openness from society to speak into? How does God want us to fulfil these opportunities?

The big question then is how to deliver these plans and what resources God is providing to enable us to support people. Maybe that means our 2021 budget starts with reduced income from existing givers: job losses could mean perhaps a 10% reduction in giving. If so, we need to replace that quickly, which means inspiring long-standing members to invest in our vision for the future, and helping new disciples to learn the principles of generous giving. This positive approach should turn what might otherwise be a depressing thought process into an exciting expectation of God’s leading and blessing for our future. As one who serves on a church leadership team, I really want to be inspired with God’s plan for us in 2021. Many of our fellow church members, too, will be excited about how God is moving in our midst.

But the 10-20% drop in income we are experiencing in 2020 has not gone away, so much so that many church deficits are now worsening month by month. This is where our reserves come in. They were built up to cope with crises; now is undoubtedly a crisis, so we should not be frightened of accessing them – whilst at the same time using all our skill and experience to control current expenditure, and taking care to be transparent about the current position to the church members. And if reserves and cost control are still not enough, it is even more imperative that we swiftly embrace vision building to inspire new giving.

Let us not get stuck in the swamp, but sing like the psalmist David: ‘I waited patiently for the Lord; he turned to me and heard my cry. He lifted me out of the slimy pit, out of the mud and mire; he set my feet on a rock and gave me a firm place to stand. He put a new song in my mouth, a hymn of praise to our God’ (Psalm 40).