Forecasting Congregational Finances During a Time of Uncertainty


The global health pandemic is upending many things right now. Religious communities have been impacted and, as the senior minister of decent sized multi-site congregation, I have had to think a lot about congregational finances. We have about twenty people–both full-time and part-time–who work for the congregation in some capacity. I know that in order to continue to provide services to the congregation and the community I need to keep them employed for as long as possible. I also know that, someday, we will need to re-open our physical operations and that, when we do, we will need a staff onsite to offer worship, nurture religious community, and provide pastoral care for all those who wish to join with us.

Last night, I presented my Board with a modified budget for the rest of the fiscal year and some principles under which I would be developing the 2020-2021 fiscal year budget. A couple of colleagues have asked for assistance in forecasting their budgets for the next year and for figuring out how to make it through the rest of the fiscal year. In that light, I am sharing what I came up with:

1. The congregation should try to keep all staff, including, or perhaps especially given their economic vulnerability, hourly workers employed as long as possible.
2. All staff should be expected to work to their ability during this time. If they get sick they will continue to get paid. Not paid a set number of sick days, just paid, until such time as they are well enough to work again. If they have a job, such as being a Sunday nursery care worker, that is not needed at this time, they should continue to get paid.
3. The physical plant will cost less to operate. We will be using less electricity, less paper, and so forth. Some staff will need to continue to come into work to maintain the physical plant. Most will be able to work from home. We should forecast significant savings in utilities and the like because of the reduced costs to operate our physical locations.
4. All non-critical repairs that cannot be completed by the sexton should be deferred.
5. We should assume minimal offering income during this time. We normally get about $5,000 in offering income a month. I am assuming only $1,000 a month in offering income.
6. We should assume no rental income for the remainder of the fiscal year and, at best, reduced rental income beginning in September 2020 (which might be optimistic given the incompetence of the current leadership of the Federal Executive).
7. We should assume some people will not be able to honor their pledges. I am assuming that the country rapidly hits around 20% unemployment.* And, accordingly, I am assuming that we only receive 80% of remaining pledges for the fiscal year and only 80%** committed/forecast pledges for the next fiscal year.
8. All program spending is frozen, effective immediately.
9. We should draw from the operating reserves. If there ever was a rainy day, this is it.
10. We should freeze all staff salaries at current levels.
11. We should plan on having the above cost cutting procedures in place through at least June 2021.
12. If things get worse we may have to make additional cuts. Think about cutting people’s salaries (including your own) before you cut their jobs.

My recommendations to my fellow religious leaders:

1. Move as quickly as possible to aggressively and compassionately cut your budget.
2. Revise your income forecasts along the above lines.
3. Prepare for at least 18 months of financial hardship.
4. Remember, you’re the steward of an institution that has likely seen significant hard times before and will likely see them again. Don’t panic.

* Unemployment during the Great Depression hit about 25% at its peak in 1933. In 1929 it was 3.14% and, the next year, it rose to 9%. It continued to rise until there was aggressive and intelligent intervention by the federal government–something unthinkable under the current administration. The precarious nature of much of contemporary work and the so-called gig economy (which is really just a way for corporations to mercilessly exploit workers) suggests that the unemployment rate will rise very very quickly. In my home state of Michigan they’ve seen a jump of 1,500% in unemployment claims in a single week. Retail and hospitality are both in freefall and combined make up about 20% of the workforce. The significant loses these industries will and are experiencing will have a cascading effect throughout the economy. And that doesn’t take into consideration the impact the other industries that are experiencing job losses because, say, factories can’t operate safely, will have on the economy.
** The formula I’m using for my congregation is significantly more complicated. However, I still come up with around the 80% number.

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