by Mark Jones, ECCU VP and Senior Banking Consultant
(Originally published as a post within ECCU’s former e-publication, The Buzz.)
Even if you were never a Boy Scout, you know their motto. If you were a Scout, you know the hardest part of being prepared is getting prepared. It’s like eating the vegetables on your dinner plate when you were a kid. You knew they’d make you strong and healthy, but actually eating them was the hard part.
Like the Boy Scout motto, we know that being prepared is the best way to respond to emergencies. Healing Place Church in Baton Rouge, Louisiana is a good example. After enduring the wrath of multiple hurricanes, most recently Katrina and Ike, they prepared for future natural disasters by purchasing electrical generators for all key staff. That way they can rest assured that things are okay at home as they continue ministering to their congregation and the community even when the local power lines are down.
We’re hearing from ministries across the country that donations are down. And with the Christmas season approaching, ministries that are accustomed to a year-end spike in giving may actually find donations to be lower than expected. Those without adequate reserves could be forced to make some quick, even painful ministry cuts.
So how do you prepare for a decrease in income or increased expenses? The hard part that every ministry must go through is the process of determining a level of reserves that is adequate for them. Once that target is set, it’s a matter of taking deliberate steps, usually over a period of time, to build reserves to that target level.
Like eating your vegetables, you need to do the hard work of identifying and building adequate reserves. This will enable your ministry to stay focused on the mission God has called you to pursue, even during difficult times like we are experiencing today.
For more information on maintaining adequate reserves, check out the white paper Liquidity: How Much Is Enough?