Shepherding in a Shifting Financial Landscape

Written by on November 5, 2021

Salem Baptist Church of Chicago got creative with ministry funding in 2020. The predominantly Black megachurch served 15,000 meals to needy Chicagoland residents during the COVID-19 pandemic, funded in part by government grants received through a nonprofit organization affiliated with the church.

Giving from church members held strong, said pastor of ministries Shaun Marshall, but increased ministry necessitated new funding streams. Now with the pandemic continuing to fluctuate, Salem has realized its new funding model probably is here to stay.

Among COVID-19’s lessons: “The church cannot be dependent upon just one stream of revenue,” Marshall said. That is one of several economic changes financial experts see on the immediate horizon for churches. Pastors, they say, should prepare for unique financial challenges over the next two years, driven in large measure by the global pandemic.

Shifting Funding Models

Churches will need more capital over the next two years. Average church size in the US has declined steadily for 20 years, according to new research by the Evangelical Council for Financial Accountability (ECFA). “As attendance goes down, per-capita costs go up,” said Warren Bird, ECFA senior vice president of research and equipping.

Additionally, many churches face deferred maintenance because they focused limited resources in 2020 on keeping staff employed. New technology costs abound too, Bird said, “as almost every church has added an online campus or otherwise increased its digital presence.”

These financial needs have led churches “to get creative and innovative” with money, Marshall said. Some congregations have explored how to run businesses as a second stream of funding in addition to tithes and offerings.

New Direction christian Church in Memphis, for instance, maintained a restaurant and a barber shop connected with the church. Church consultant John Reese, coauthor of Smart Church Finances, called the concept “business as missions,” noting it has been employed successfully by international missionaries for two decades and now shows promise for churches that look to coffeehouses and bookstores for extra revenue.

Some congregations may break their ministry plans into smaller projects for fundraising purposes—like World Vision or Samaritan’s Purse Christmas gift catalogs that allow donors to “feed a hungry baby” for $9 or “help a family survive disaster” for $45. Could a church allow givers to fund one day of the pastor’s time or pay for one week of the facility’s janitorial services?

Preparing for Recession

With economic analysts expecting inflation, recession appears to be on the horizon, Reese said. It’s a forecast echoed by some economists, who warn that high prices are more than a temporary spike due to supply chain holdups.

The consumer price index (a measure of prices paid by consumers for retail goods) was up 5 percent in late spring, well higher than any price increases the US has experienced since before COVID-19. Because much of the price increase has come in areas like used cars, air fares, and hotels—industries where people are expected to spend money as they emerge from quarantine—Federal Reserve officials have said the increases are a temporary facet of economic recovery.

But Mohamed El-Erian, chief economic advisor at the financial services company Allianz, isn’t so sure. He told CNBC, “If you actually look at the numbers on inflation, you would start having serious doubts in your mind as to how transitory inflation is.”

That could spell trouble for churches, where a rush of ministry costs may meet higher prices. Added to that, Reese said, congregations will be tempted to increase 2021–2022 budgets based on increased giving during the pandemic.

Yet the unexpected giving increases many churches experienced in 2020 may be an anomaly. The giving bump could reflect church members giving their government stimulus payments or passing along savings on gas, clothes, and eating out. None of that will continue.

To mitigate the effects of a potential recession, Reese said, churches should budget for 2022 based on trends from 2017–2019 rather than assuming the 2020 giving bump will continue. They also should train more volunteers rather than increasing staff immediately, consider having fewer programs, and realize ministry after the pandemic doesn’t need to be identical to ministry before March 2020.

The church should not restart programs “just for nostalgia, just because we’ve always done that,” Reese said. “Maybe we shouldn’t continue some programs even though they were stopped for reasons outside our control.”

Zakiya Williams, an Atlanta-based organizational consultant and former financial
planner, added that a church budget, regardless of how pared down it is, always should reflect the congregation’s missional priorities. “For our first mission to be proclaiming the Good News,” she said, “it’s very interesting how few resources are allocated to the mobilization of that mission when you look at a [typical] church budget.”

Shepherding Speculative Investors

Since early 2020, financial markets have seen a rise in speculative investing (a fancy way of referencing investments with a high risk of loss and a price higher than standard measures of value would dictate). Popular speculative investments have included cryptocurrencies like Bitcoin and so-called meme stocks like GameStop, whose dramatic price increase earlier this year was driven largely by social media. The possibility of a quick gain on speculative investments has proven too tempting for many. A “speculative froth” in the market among “a new freshman class of traders” has “become more widespread,” according to Investor’s Business Daily.

Though cryptocurrencies have been popular for several years, investment professionals say the pandemic may have fueled the current wave of speculative investing as quarantined investors grew increasingly reliant on social media, including its chatter concerning AMC movie theaters, Bitcoin, and other forms of speculation. They also had more cash on hand to purchase speculative investments, with easy credit, government checks, and the pandemic-induced reduction in personal spending.

Buying and selling speculative investments may seem like harmless fun. But Christians should exercise caution, says Julie Swanger, a senior investment strategist with Ronald Blue Trust, a christian financial services company. “When people participate in speculative events that are not based on [investing] fundamentals, there are more people who lose than win, and it causes a lot of heartbreak and a lot of fear,” Swanger said. “It can destroy marriages. It can destroy relationships.”

Beyond warning parishioners about the risk of losing money, pastors may need to help speculative investors in the pews examine their motives. Speculation can be “a form of materialism,” Swanger said. “I would encourage pastors to ask the members of their congregations to think a little bit more critically, to not to cave to greed, and to focus on the things that really bring them joy,” she said.

Navigating Job Transition

Pastoral turnover is an ongoing reality in the church world. But it’s expected to snowball in late 2021 and continue throughout 2022, which will leave both pastors and churches to navigate new financial realities. At least two factors account for the increased turnover. First, some pastors who planned to change churches or retire during the pandemic felt they couldn’t abandon their congregations during a trial, Bird said. Those transitions, delayed until COVID-19 abated, now are occurring contemporaneously with a new round of naturally arising pastoral vacancies.

Second, church restarts after months of pandemic shutdown are causing many pastors to realize their task requires a “church-planter type” rather than a shepherd with a more traditional ministry skillset, Bird said. Some ministers are realizing, “That’s not me,” and have opted for a job change. As a result, pastors face the financial challenges of relocating to another church or leaving ministry altogether.

Some pastors could find themselves moving from full-time to part-time vocational ministry to help their churches cope with financial strain. That presents a new set of financial challenges. “A pastor is on call 24 hours,” Reese said. “When can you unplug from that to do a tentmaking type of activity?”

Pastoral turnover will leave congregations with financial challenges, too. Churches will find themselves shifting resources to fund pastoral searches or, in some cases, merging with another congregation to afford a full-time pastor after the pandemic. “Merging has mushroomed over the last five years” among smaller churches that had “wonderful heydays” but now need to begin “a new chapter for the gospel,” Bird said.

Prioritizing Health Insurance

Affordable health insurance is more of a challenge now than ever for pastors. Thirty years ago, one family’s tithe could cover the cost of a pastor’s health insurance, Bird said. “Today, medical coverage is a

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