4 Ways To Safeguard Your Church Against A Budget Shortfall

Budgets are delicate things—and that goes double when they’re for churches. When we create church budgets, we look at financial patterns while making faith-based decisions about the future. And this process can be hit or miss.

Everything might be running perfectly for the first couple of months, and then, suddenly, the budget is in a tailspin. There are many reasons why a church’s finances could struggle. It only takes one or two families to move out of the area or ratchet down their giving before you see a big drop. Or maybe you’re just struggling through a particularly bad summer slump.

You can’t always predict why your budget might suffer, but there are some things you can do to prepare for unforeseen budget shortfalls.

1. Run lean

Churches tend to fall into the same budgetary traps that families do. When things are going well, the budget balloons. Instead of banking excess capital, the budget absorbs it, and expenses grow. And before you know it, it’s challenging to live off what you used to make.

Managing church funds is about stewardship. While you should never be scared to increase your budget, make sure your board is intentional about it. Be clear about what problem a new budgetary line item will solve or what opportunity it capitalizes on. And on the flip side, don’t be afraid to put an end to ministries that are no longer producing desired results.

2. Emphasize recurring giving

Churches that offer forms of digital giving still seem to prioritize and emphasize the weekly worship service offering. This means that giving largely becomes an out-of-sight-out-of-mind activity for many church members. If people miss services, they don’t tend to give. And when they do give, they don’t often make up for offerings they missed in their absence.

Recurring giving allows people to give automatically. It makes up for the shortfalls of attendance-prioritized giving—and helps facilitate a budget that you can depend on. At the same time, it elevates the stewardship to a financial responsibility associated with everyday obligations like Netflix payments.

3. Promote pledging

Many churches base their budget on pledges. Every year, church members look at what they’ve given in the past, examine what the church plans to do in the future, and makes a decision about what they’ll be able to give in the new year. Naturally, they’re not contractually obligated to give the amount they pledge, but they’re a lot more likely to. Pledging enables churches to draft budgets that are a lot less arbitrary.

If you’re interested in discovering how you can facilitate pledges in your church, check out the new features Pushpay rolled out this spring. You’ll find all kinds of ways that Pushpay is helping you nurture members toward maturity and generosity.

4. Save, save, save

This list opened with the suggestion that churches run as lean as possible. Savings should be the first order of business with any income that’s above-and-beyond the budget. The same is true for surprise endowments and other windfalls. Instead of asking, “Where can we spend this money?” the question should probably be, “Is there a legitimate reason why this shouldn’t go into our cash reserves?”

Talk with the board about how to use your reserves. The goal isn’t to hoard funds. Maybe you decide to build up three months of budget surplus and maintain a specific amount in your benevolence fund. Once you hit those amounts, you can choose how to spend any excess.

Maintaining a healthy budget

In many ways, a healthy church budget is just like any reasonable personal budget. If you’re intentional about how you raise and spend funds, you should be able to weather a few storms. But it starts by thinking ahead and putting processes in place that will protect you when things get rough. Once you do that, you can spend more time focused on ministry and less time worrying about keeping everything afloat.

A big part of building predictability and stability into a church budget is encouraging recurring giving. To discover the simple strategies churches are using to nurture recurring donations, download the free ebook, The Ultimate Guide To Growing Recurring Giving, today!