Money helps fuel ministry, so it’s critical for leaders to pause and understand the state of their church’s finances as they start a new year. I encourage leaders to consider short-term strategies to keep their congregation focused on the mission and a long-term approach to develop disciples who are generous.
Here are four steps you can take to improve the short-term and long-term financial health of your church.
Conduct a “Giving Audit”
People’s giving habits can be indications of their spiritual journey; a church typically has givers at various points on that journey. PushPay identified the following eight categories of givers in a church:
- First-time givers: people who have been moved to make a first-time gift within the last 30 days
- Second-time givers: people who followed up their initial gift with another one
- Occasional givers: people who are sporadic or undisciplined in their giving
- Regular givers: people with giving habits you could set your watch by
- Recurring givers: people who have set up their giving to happen automatically
- At-risk givers: people whose giving has recently stopped or who have paused their recurring giving
- Lapsed givers: people who have completely stopped giving over the last 120 days
- Top givers: people who carry a lot of the church’s financial burdens
Recurring givers are the best givers in your church. Studies show that recurring givers contribute 42 percent more than typical givers and 28 percent more than nonrecurring givers.
Here are some questions to consider as you review the results of your giving audit: How many givers did your church have in each category prior to COVID-19? How has each category of givers changed since the pandemic? What are your strategies for following up with and connecting with each type of giver? What do you know about your “at-risk” and “lapsed” givers and how the pandemic has impacted them?
Assess the Financial Health of Your Church
Churches of any size have three basic metrics for undersanding their financial health.
Cash flow is the money coming into your church from all streams of giving or revenue. Cash flow is an important factor for determining sustainability. A church with three months or less of cash in hand to cover expenses will have difficulty managing its financial responsibilities.
Daily operating expenses have an impact on everything the church does. These expenses include fixed costs like church staffing, operational expenses (i.e., mortgage, utilities, janitorial services, etc.), missions giving, and other established expenses of your church.
Debt includes capital expenditures, loans, and bonds. It’s imperative that churches closely track their debt and work to address any unexpected deficits.
In my experience, churches and church leaders often don’t have a good handle on how they are doing in these three areas. Plus, I’ve seen too many lead pastors who choose to “put their heads in the sand” and leave the finances to someone else.
Awareness is an asset, especially during rapidly changing times. And pastors can be aware of their church’s financial condition without micromanaging it. When the pastor has a good understanding of the church’s financial situation, he can provide better reports to the congregation.
Create New Ways to Engage More Ministry Volunteers
Church closures, government restrictions on gathering, online worship services, and a fear of contracting the virus can naturally lead churches and individuals to pull back. It’s time for churches to creatively look for new avenues to engage more people in serving that are safe and that they feel comfortable doing. This is especially true because many of the traditional volunteer roles at your church may not be available given a reduced number of services, ministries that are paused, or the lack of children’s or student ministry programming.
Research shows that “the more engaged a person is in a particular ministry, the more often they give, and the more they give,” says author and veteran minister Todd McMichen. “So, giving is greatly impacted by the level of engagement of the individual, not the level of attendance in the worship room on a given Sunday or even the amount in a person’s wallet.”
Another study found that people involved in a small group or Sunday school class gave as much as six times more than those attending worship services alone.
In short, engagement drives generosity.
Focus on Sharing Outcomes More than Outputs
Outputs are the activities and programs your church provides for your congregation and the community. For example, most churches tend to tell the congregation something like, “We have a dozen new small-group Bible studies meeting online since the pandemic started.” This report could be encouraging to some.
But if you told of the life change or spiritual growth of one person who has become involved in one of those new online small groups, that would be sharing an outcome. Typically, outcomes also energize people to engage and to give. Finding outcomes to share can take a little more work, but when you emphasize outcomes more than outputs, people’s ears will perk up and they will respond.