Lessons Learned from Ministries Adapting to the Changing Economy

(Originally published as an article within ECCU’s former e-publication, Ministry Banking Today.)

Remember when managing church finances was relatively easy? Income approximated expenses. New programs were launched to meet people’s needs and capital campaigns met or exceeded expectations. Then the bottom fell out as the economy plunged into a recession unparalleled in our experience.

The good…and not-so-good news

While some ministries made strategic trims and weathered the storm pretty well, others struggled as their key donors lost jobs or income. They had to cut programs, halt building projects, institute pay freezes or cuts, or take more drastic measures.

Why were some ministry leaders able to rally more effectively and quickly than others? Steve Worthington, vice president of credit with ECCU, and his staff interact with ministries every day. He says that while most have made adjustments and continue to stay on mission in the changing economy, he’s seen a number of trends among ministries that have not.

“Some ministries that found themselves struggling to make expenses and mortgage payments didn’t recognize the problem fast enough,” Worthington says. “Others failed to take action once they realized the extent of their ministry’s issues.” Another problem Worthington observed among struggling ministries is “a lack of expertise to guide their ministry through the challenges of reduced income.” They didn’t fully understand the repercussions of lost jobs or declining income of their congregants.

How are churches responding?

According to a recent ECCU survey, 65 percent are managing their finances differently since the economic downturn. The most common cash management changes were budgeting more conservatively, minimizing expenses, and monitoring their budgets more closely.

What does change look like?

For Calvary Chapel WestGrove in Garden Grove, California, change means focusing on only the most important things. Mike Antenesse, formerly the church’s executive pastor and now serving on the board, says, “We changed our buying decisions criteria to a ‘must-have’ as opposed to a ‘want-to-have’ basis.” This included making some hard decisions about keeping or adding programs.

They also carefully reviewed their cash management practices and began to build their reserves, including increasing their money market balance substantially. Antenesse adds, “We quadrupled our fund by putting aside any unused revenue at the end of each month in anticipation of a potential downturn in income.”

Joshua Springs Calvary Chapel in Yucca Valley, California, has learned that they need to be prepared for change. “We rearranged cash and opened a line of credit,” associate pastor Bob Jarrard says. “And I believe God’s provision follows our preparation.” Jarrard references a lesson taught by Senior Pastor Jerel J. Hagerman: “Because we’ve seen how God works, we’ve learned that circumstances can’t stop the vision. We can’t and won’t be imprudent, but we’re not cutting God short. And people have responded.”

While we’d like to think we’ve seen the worst of this economic season—and there are mixed messages—one thing seems to be consistent with most ministry leaders: Going back to the “business as usual” of two years ago probably won’t happen, nor should it. Learning from recent times will make our ministries stronger, both financially and missionally.

This article was excerpted from “Lessons for Church Leaders from the Recent Economy” as featured in the November 2009 issue of Church Executive magazine.

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