COVID-19 Church Financing Best Practices | Griffin Capital Funding

COVID-19 Church Financing Best Practices During Pandemic

There are very legitimate reasons for churches to worry about solvency during the COVID-19 pandemic. While there are many larger churches that have strong financial resources, many smaller churches and congregations struggle to make ends meet during the crisis.

If you want a harsh blow, Bill Wilson of the Center for Healthy Churches predicts that up to one-third of churches in the United States could have to shut their doors by 2025. To back this up, he points to research from LifeWay Research that says 5% of churches will close before the end of 2020. That’s five times the average closure rate for churches.

church financing best practices during a pandemic

The reasoning for these churches shuttering is primarily because so many of them are still closed, and those who are open are seeing smaller-than-average rates of attendance–and giving. One of the biggest donation days of the year for churches is Easter, which was during the lockdown, and it may be the devastating blow that is too hard to recover from, especially if things don’t come back by Christmas. 

One thing that could help many of these churches, according to Pastor Prince Raney Rivers of Union Baptist Church, is to put church donations and offerings online, which will be especially important to minority communities. According to the Lake Institutes’s 2019 National Study of Congregations’ Economic Practices, African American congregations receive 88% of their revenue through in-person giving, compared to 78% for all congregations. Rivers said that his church succeeded more with drive-and-drop donations rather than online giving or even mailing a check. People like to be there in-person.

Laura Everett, Executive Director of the Massachusetts Council of Churches says that some of the larger, better-resourced churches will need to step in to help save some of the harder-hit ones. “We believe there is enough,” she said. And so the challenge is to share what we have with those who need it most — to live up to that yearning expressed in John 17:21, “that they may all be one.”

“If we only take care of our own,” Everett added, “how can anybody trust us?”

So what should churches who are struggling do? What are church financing best practices during a pandemic?

Tighten Your Belt

This may seem like the most obvious thing on this list, and you’ve probably already thought of it (and are already implementing it) but unnecessary spending needs to be cut as much as possible, saving it for the emergencies–and those emergencies include both saving the church as well as saving its vulnerable members. A budget needs to be made and followed, and of course the bills must be paid: mortgage and insurance. But it may come to a point where a church under lockdown should cancel its utilities and other expenses that are not needed when the congregation can’t meet. Now more than ever churches need to have a financial process in place for dealing with budgetary issues, including regular reviews and slashing budget items as needed.

Implement Non-Traditional Ministering

By now, many congregations have experimented with Zoom calls (or other similar services). Some use them for Sunday services, and some expand them into things like weekday Bible study classes, counseling, and outreach. Others have tried for more community-building ministering efforts, including “drive-in church” where all the cars pull into the parking lot and the pastor speaks to them on a low-power FM transmitter. Doing things like this increase congregant participation, which in turn increases donations. Those donations can be used–now more than ever–to help the poor and needy in the community.

Give People Opportunities to Serve

Many people imagine that the church will always be there, and they haven’t even considered the fact that it may be in danger (and they haven’t considered the stress that the elderly, homeless, and poor in the area may be under). If there was ever a time to solicit donations, now is the time. There are many people who are under significant financial burdens, but there are many others who are tightening their own belts and putting away a little extra every month in case of a time of trial. Those people may be more than willing to give a bit more than usual if asked. Now is a perfect time to implement a church online donation system and encourage people to use it, as well as sending out self-addressed stamped envelopes for people to return with donations. Always remember that “He that hath pity upon the poor lendeth unto the Lord; and that which he hath given will he pay him again.”

Remember That You May Be Poised To Survive

According to Gerardo Marti, co-author of the book “The Glass Church”, about the financial collapse of Richard H. Schuller’s megachurch, The Crystal Cathedral, smaller churches might be in a better position to survive this than the big ones. While he does believe that all churches are going to have a hard time and that church attendance–when people can come back–is going to slump. But the bright spot is that smaller churches, particularly those with fewer than 300 members, are poised to survive. The smaller size means they have less infrastructure, fixed costs, debt, maintenance, and staff, and are less dependent on large crowds to survive.

Look For Opportunities for Outside Funding

Another important aspect of church financing best practices during a pandemic is understanding outside funding and how to obtain it. The window may have closed for applying for the CARES Act, but there are still opportunities for church organizations in need. One such program is the National Initiative to Address Economic Challenges Facing Pastoral Leaders. The initiative, funded by the Lilly Endowment, Inc, supports 43 grantee organizations, “stewarding projects to equip pastoral leaders for financial literacy and leadership, as well as providing direct economic aid.” Elise Erikson Barrett, Coordination Program Director of that organization says that churches need to emerge from COVID-19 with a new mindset, to be more adaptive, whether that involves the size and responsibilities of church staff, or how the buildings are used, or how the church can make itself indispensable to neighbors. 

Make a Big Organizational Change

Brian Kluth, Director of the National Association of Evangelicals Financial Health, says that some churches may need to make some big changes. They may be painful at first, but they could ensure the long-term survival of the church. Some of the possibilities he gives are merging with one or more congregations, becoming a satellite campus of a larger church, or transforming to a house-based church where remaining members meet in members’ homes. He says that’s inevitable that some churches will need to face these choices if they want to stay open–the median annual budget of a church in the United States is only $125,000, which doesn’t go very far even in a good year. But he also says that this is an opportunity to reorient one’s priorities: “Many of our idols have fallen in this season,” he said, citing sports, shopping and travel. “We have to reassess what our commitment is to God and to our families. It’s no longer about the big Sunday production but how we [show] care and love for people.”

Look Into Financing

While you may not have been looking at expanding right now, if you’ve ever had plans to alter your building or expand your property, a time when church buildings are empty might be a perfect time to make needed renovations or additions. This should only be done if you’ve budgeted carefully and are ready for a big commitment, and have money in the bank. But if you’re fiscally prepared, now could be a time to get a great deal on a construction.

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