Budget lessons from the Recession can help you today!
Five proven practices to recession-proof your church.
Until 2008 or so, if you asked someone to name the most significant economic event in modern US history, most people would have said the Great Depression. Today, the answer would probably be the Great Recession that started a decade or so ago. Like its 1930s predecessor, the recession forever marked the people who lived through it.
Church leaders were no exception. As the economic downturn began to affect charitable giving, many leaders faced challenges they’d never experienced before, like laying off staff, cutting programs or struggling to make mortgage payments. And budgeting became brutal. Proven past practices simply didn’t work in what gradually became known as the new normal.
Fortunately, as so often happens during tough times, important lessons were learned. And as a credit union with so many churches as members, ECCU was in a unique position to see how they adjusted to weather the economic storm. We examined the recession’s impact on churches and identified five critical budget lessons that churches learned from those difficult days. This study resulted in a new ECCU e-book, 5 Church Budgeting Lessons Learned during the Recession. Here they are, each with a related excerpt from the e-book:
- Stay on mission. “A clear mission is vital to effortlessly evaluating every ministry, program and expenditure. When your income fluctuates (and it will), having everyone on the same page regarding your church’s unique assignment will empower you to respond creatively and trim costs appropriately.”
- Know when (and how) to say no. “The best way to deal with a volatile economy is to develop a habit of saying no before it’s too late. When you’re mindful that you’re stewarding God’s resources, it makes you a lot more strategic and intentional about how you use them. And while you don’t want to develop a habit of denying yourself so much that you’re never taking risks or growing, you do want to be very tactical with your resources.”
- Build flexibility into your budget. “As your leadership team prepares your budget, ask yourselves, “How would this budget look if we were to grow by 10–15 percent? How about if we were flat against last year? How would we respond if we knew we were going to take a 10–15 percent hit to our income?” Then, look at each line item and consider how that might change in each scenario.”
- Communicate fully and frequently. “God wants to bless your work, and he’s going to do that through the generous giving of donors. Never assume that people aren’t interested in giving more. Instead, use openness, information and inspiration to encourage and invite them to commit themselves more earnestly to God’s work.”
- Remember who’s in control. “A church budget is a spiritual document. It should be a picture of our trust in God’s abundance and faith that he cares about building his church and is therefore aware of and working on behalf of our needs. We should never approach our budget as a strictly numbers-oriented undertaking.
The Great Recession was instructive for many church leaders. They learned not only how to prepare for economic uncertainty but also how to prepare wisely for other financial decisions.