As a leader, it’s critical to acknowledge that the next crisis is not a matter of if, but when. While you don’t want to live life in fear, it’s prudent to take time ahead of crises to prepare your church’s financial plan or response. In the midst of a crisis, you’ll have to adjust to the specific factors of that event or situation. But having an existing plan to work from can put you ahead of the game rather than leaving you scrambling to come up with something from scratch.
Here are four words to help you build an emergency response plan to simplify your church finances in the face of a crisis.
1. Navigation.
Choose to be proactive rather than reactive.
Proactive leadership is essential in times of crisis. Affirm that leadership will be deliberate—not reactionary—in facing an emergency. Rather than choosing a passive “wait and see” response, encourage your team to address financial challenges head on.
Emergency plan action steps:
- Ensure that every member of your board and key staff are aware of the important financial metrics (income, expenditures, cash reserves) of your church’s financial statements.
- Schedule a regularly occurring meeting solely for discussing your church’s financial response.
- Create a weekly financial dashboard so your leadership team can stay up-to-date on financial health.
2. Reallocation.
Choose to prioritize your obligations.
Your church has both fixed costs and variable costs. These aren’t uniform for every organization. As you’re reviewing your church’s financial obligations, talk to creditors to see if they’ll potentially defer payments during the crisis. While pushing off payments isn’t ideal, it should be viewed as a temporary adjustment for crisis management. This kind of crucial decision-making is key to keeping your ministry moving.
As your church tightens the belt, it will create some uncomfortable conversations, such as when it’s time to furlough or lay off staffers. This is never a pleasurable process, but it’s precisely why your team must be fully invested in the reallocation process. Trim all the fat that’s possible to stave off making the most difficult choices until absolutely necessary.
Emergency plan action steps:
- Prioritize your spending, discerning between fixed and variable expenditures.
- Seek ways to reduce (or even eliminate) your church’s variable costs.
- Inquire with creditors to see if payments can be deferred.
- Determine potential triggers; when reserves reach a certain level, make the appropriate cuts.
3. Communication.
Choose to communicate with your team and your congregation.
Many church leaders deliberately avoid financial conversations, especially during emergencies. Some pastors believe this falls outside the confines of the calling—that it’s their role to focus on spiritual guidance. Yet financial stewardship of church resources is a matter of spiritual guidance.
In times of crisis, it’s critical that your congregation understands how church leadership is meeting the financial challenges.
There are many creative ways in which churches can keep the congregation informed about financial issues without sounding obsessed about them. Aim to present the challenge clearly and with hope.
Emergency plan action steps:
- Make a bulleted list of the proactive decisions leadership has made to manage finances during the crisis, and share these openly with the congregation.
- If applicable, develop a list of benevolence initiatives the church has enacted at this time.
4. Preparation.
Choose to think about the future.
If your church goes through a serious crisis, the ministry that emerges might look dramatically different from that which proceeded it. As a result, you may need to consider how your organization will do ministry in the new context.
For example, you may choose to keep more robust reserve accounts. Perhaps your systems for using technology or the ways you design and use your facilities will shift. And significant changes could have implications for staffing and budgeting. Prepare for the new reality by observing how you are adapting and what is or isn’t working.
Emergency plan action steps:
- Observe the success of emergency initiatives, determining which responses will outlast the crisis.
- On the other side of the crisis, rewrite your strategic plan in light of this new context.
Meet the challenge.
The simplification of your church’s financial situation in the face of an emergency involves navigation, reallocation, communication, and preparation. In your church’s next leadership meeting, discuss these steps and prepare your ministry’s response.
It’s a team effort that will require creativity, but it will serve your church well when you are better prepared to meet a challenge.
