You’re in a growing church.

Keep growing, and talk of adding staff, facilities or planting another campus, and the like will take place.

Your church may even be in the middle of these kind of conversations right now or are just about to hire or launch a building initiative.

 

Before you pull the trigger though…

 

It’s 2016 2017. We’re due for another recession. Depending on what source you look at, on average, we go into a recession every 8 – 12 years. It’s been 8 9 years since the last one. The truth is, I don’t know when the next one will be. There is was talk about one in 2016 based on economic indicators though. Still…who knows.

Anyway, the financial reality of these kinds of initiatives mentioned above are that they add fixed costs to the ministry. No one really plans to increase costs and decrease offerings, at least not for long.

Now, I’m an eternal optimist. I believe that God’s economy is different than the world’s. He can sustain and even grow things during a recession – No. Problem.

He can however, in His sovereignty allow downturns to impact local churches. (The church is made up of people who are employed after all). The reality though is that the majority of churches are impacted in a recession. The level of impact on your church is the $6 million question.

One one hand, this post is NOT a call to put your expansion plans on hold till the next recession is over. On the other hand, this post IS a call to consider the impact the next recession may have on your church. Just look to the last recession we had. What happened at your church? If it were to happen again, what impact may it have on your ability to expand?

Some statistics I saw recently said giving dropped 13% on average in the last recession. Another stat said recessions typically last anywhere from 8 to 18 months on average. (Actually, there’s plenty of evidence many areas in our country have yet to recover from the last one).

Initial Planning Step:

Do some forecasting based upon a giving decrease for 1 to 2 years and consider what may happen given a set of assumptions you and your team put together. Consider a best case, a worst case scenario and one somewhere in between. Consider the likelihood of each given what happened the last time and given the current demographics of your church and community.

If the decrease in offerings causes your salaries and benefits to be too much out of range, you may need to hold off on the new hire. If the lower offerings don’t allow sufficient margin to cover debt service, you may need to wait. [Wrote about Margin Planning here].

Lastly, in light of a coming recession and your current financial condition, you may need to address some of the 8 items I list below before expanding.

However, after careful planning, prayer and consideration of these scenarios, if the Pastor and Leadership are convinced God is saying move ahead, then support that and begin planning/executing accordingly.

Regardless, at some point, another recession will occur. So to that end…

Here are 8 things you can do to prepare:

1. Increase Operating Cash Reserves [wrote about reserves here]
2. Consider establishing a Benevolence Fund/Reserve specifically to help your church members in event of job loss
3. Increase Note Reserves if in debt
4. Set aside funds to reach out in your local community. Learn what is needed and where and meet those needs. Use as an opportunity to share the Gospel while meeting needs.
5. Build on a cash basis vs. going into debt [wrote about that here]
6. Don’t automatically rehire when someone leaves
7. Consider outsourcing an admin function when someone leaves or in place of a new hire/addition
8. Start or continue offering financial education classes and/or coaching to your members and community. People need to learn to live on budget, reduce debt and save money

Let me know what you think in the comments.

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