How to Manage Church Finances During a Recession

Spend a few minutes watching the news on TV or scrolling through social media headlines, and the message is the same: The U.S. economy is in trouble. Experts agree that a combination of factors are converging to create a situation that will stress finances in all our lives.

Americans are responding by battening down the hatches. They’re putting off major purchases, opting for cheaper lifestyle choices, cutting out unnecessary expenditures—and unfortunately, for some families, the tithes and offerings your church depends on may fall into that last category.

Churches are always doubly impacted by a recession. As many learned during the 2008 crash and the recent COVID pandemic, not only do your congregants and administrative team suffer individually, but your church ministry is likely to see a drop in giving at a time when the needs of your community are greater than ever. 

In the aftermath of the ‘08 real estate bubble and the subsequent recession, 57% of churches reported that their income declined, forcing staff salary freezes and reductions, reduced savings and investments, postponement of capital projects and missions, and more. These problems weren’t just isolated to either small or large ministries, nor were they solely issues for protestant or catholic congregations—the ‘08 recession showed us that a down economy affects the Church at every level.

But, while you probably can’t change the currents of the global economy, you can prepare your church budget to conquer a coming recession. Here’s where to start:

1. Setting Realistic Financial Goals

Nothing inspires your church family like seeing the results of their effort and sacrifice. Your congregation draws strength from witnessing the fruits of their labor, of feeling part of something bigger in their religious community

But the goals you expected to reach in the near future probably didn’t factor in a recession. 

Those financial targets and donation thresholds might no longer be feasible. They might have made sense with consistent donations, but once your donors’ fiscal belts are tightened, those benchmarks you reasonably forecasted could be missed. And, while disappointing in and of itself, those misses could also drain the enthusiasm of your congregation.

First and foremost, you must set realistic goals for the coming storm. Reconfigure expectations for your church’s pace of growth and progress. Be forthright with donors about the nationwide financial situation, that expectations for your ministry’s progress will need to be lowered, and express that you understand the challenges they face.

In an effort to ease the burden on your members, use this as an opportunity to encourage your congregation to set up recurring giving. Not only will donors be able to set a regular giving schedule that fits their finances during a recession, but your administrative team will improve their forecast of your finances into the future.

2. Assigning Trusted Members For Church Financing

Church leaders tend to be disposed toward taking on too many responsibilities themselves. In their enthusiasm to generously serve their church, they try to do too much. But nothing can hamper a ministry more than bad financial management—you need to rely on someone with proper training and experience.

Odds are, there are members of your church who have experience in accounting, and may even be willing to take on the role for a reduced fee. Be cautious and honest with yourself, however, and ensure the church member truly is suited for the role, that you’re not turning a blind eye to their qualifications in order to ‘keep it in the family’. 

An outside CPA, or someone with substantial accounting experience, may end up being the smartest decision for your church to minimize the need for financial oversight. The cost of hiring someone will be recouped by their professionalism, lack of errors that cause loss of resources, and the time it frees up for your other staff to do the work of your ministry.

No matter which route you choose, church management software is a powerful tool for your bookkeeper. Online giving connected to a seamless all-in-one management platform will streamline your workflows and save everyone substantial administrative time.

Help grow your ministry

3. Setting Up a Reserve Fund

Simply lowering your monetary targets may not be enough. It’s one of the most commonly cited bits of personal finance advice: You need to have savings in case of an emergency.

Well, the same wisdom applies to your church funds. Even if you already have a rainy day fund stashed away, now is the time—before a recession has fully arrived—to make a special ask of your congregation for funds, while they’re not yet feeling the full sting of the economy.

You’ll want to be as transparent as possible with this special fund. Communicate with your church ministry when and what this money is for. A ChMS can help you generate and share reports that help highlight the critical needs you’re addressing through their generosity.

Pushpay’s Accounting Tools Simplify Workflows

Hopefully you’re no longer tracking the complex and important financial information of your ministry by hand. Virtually every church uses a form of church accounting software to keep their finances in order—but not all tools are created equally.

Programs like Excel and Quickbooks are great entry-level platforms that accountants depend on in every industry. But churches have special workflows and unique needs, especially regarding the complicated tasks of tracking giving and being transparent about expenses with all those givers.

Pushpay’s ChMS facilitates all those needs and more. Not only will you receive market-leading tools that drive engagement, build community, and are proven to increase giving, but our software seamlessly integrates with over eighty different platforms—including several popular accounting solutions.

So while your leadership team focuses on ministry and brainstorms fresh ideas for church growth, Pushpay can take care of streamlining workflows for your dedicated financial management team. To learn more about our software, take a self-guided tour of our ChMS now, or schedule time for a free one-on-one demo with one of our experts.