14 Nov 6 Recession Tips for Church Finances (Part 2)

6 RECESSION TIPS FOR CHURCH FINANCES (PART 2)

Recessions are difficult seasons to navigate for both individuals and organizations, bringing with them high levels of uncertainty and stress. For example, the Great Recession of 2008 caused major problems for American churches—over half of them saw a decline in donations, and half a million church staff either lost their jobs or saw their salaries cut.

And whether or not your church has already felt the impact of our current economic downturn, many financial experts are predicting another recession in 2023.

That’s why it is crucial for your church to prepare for financial uncertainty. Our team of financial professionals at Finch have helped churches thrive financially through many difficult seasons, including the COVID-19 pandemic lockdowns. Check out Part Two of “6 Recession Tips for Church Finances” for more of our pro tips on how you can prepare your church to successfully face financial adversity. You can read part one here.

4. Seek Advice from Financial Professionals

Every hero needs a guide—someone with knowledge, experience, and wisdom to help them overcome obstacles and avoid pitfalls. In order to reach your church’s goals, it’s essential to have financial experts in your corner to provide professional advice and guidance to better steward your financial matters.

Professional financial services like Finch offer a team of veterans that can help your church with basic bookkeeping and budgeting, as well as with payroll, taxes, forecasting and investment planning. The best part is they offer this service for a fraction of the cost of hiring an in-house accountant. They also help ministries comply with legal and some regulatory requirements. For example, a church may need to file certain tax returns or disclose certain financial information to its members.

Finch also provides monthly statements that help to ensure your church’s finances are managed in an ethical and transparent manner. Knowing that professional accountants are handling your church’s finances can help to build trust and confidence among the church’s members and supporters, which can be important for fundraising and other activities.

Consider having a team of professionals handle your finances to improve accuracy, save your team time, and give you more time to focus on achieving your mission and goals.

5. Diversify Your Income Streams

Churches, like any other organization, rely on a steady stream of income to support their operations and fulfill their mission. Yet, a dependence primarily on donations can strain your budget during times when your people are struggling financially themselves. As the old saying goes, don’t put all of your eggs in one basket.

Diversifying your church’s sources of income helps ensure both short and long-term financial stability. One way to diversify your income is to explore alternative sources of funding beyond traditional sources such as tithes and offerings from members. For example, this could include seeking grants from foundations or government agencies, hosting fundraising events or campaigns, or partnering with local businesses to offer services or products.

Another option is to create passive income by diversifying the types of income-generating activities your church engages in. Consider renting out your church facilities for events, offering classes or workshops, or providing services such as counseling or church retreats. Additionally, you could explore opportunities to invest in businesses or real estate that generate revenue.

6. Focus on Financial Planning

As a church leader, it’s important to have a clear financial plan in place to ensure that your church fulfills its mission and serves its community effectively. While there are many aspects to financial planning, here are a few simple planning strategies you should be using on a regular basis:

• • Budgeting: A budget helps your church better allocate its current resources and prioritize its spending. Regularly reviewing, updating, and sticking to your budget ensures that your church stays within its fiscal boundaries and continues to meet its financial obligations, as well as maintain its operations without overspending.
  • Fundraising: Develop a fundraising plan to secure the funds your church needs, such as fundraising events, campaigns, or appeals to solicit donations from your members, donors, and the broader community. Whether small or large in scale, the additional income will help your church through tough economic times.
  • Financial forecasting: It’s crucial to look ahead and anticipate future financial income and needs so your church can better prepare for potential challenges and opportunities. This most commonly involves forecasting income and expenses, as well as identifying potential risks and opportunities.For example, there may be upcoming federal and tax regulations that could have a positive or negative impact on your church’s finances.

Financial planning can help your team make informed decisions about how to best use your resources and ensure that you have sufficient funds to achieve your objectives.

What’s Your Next Step?

Have you ever wondered why some churches thrive through the most difficult economic times while others struggle to just survive? One of the most important factors is the health of their church’s finances.

The good news is that you don’t have to manage your church finances alone. Finch helps churches of all sizes across the U.S. to be faithful with their finances, have deeper insights into their budgets, and plan ahead to face difficult times like a recession.

Set up a free meeting today and discover what it’s like to have a financial team of experts in your corner.