Tag: church budgets

The Return of $4 Gas and Other Woes

It is obvious that gas prices are rising quickly again.  In 2007-8, I wrote several posts on the prospects of gasoline hitting $4-$5  per gallon – you can read those posts here, here, and here.  We were well on the way to those numbers in the United States, and then the bottom fell out of the economy on a global scale.  Gas prices fell quickly back to under $2 per gallon.

Now the trend is in the opposite direction again.  There is no gas shortage — we actually export gas and other petroleum products to other countries.  We have a surplus of gas in the United States, and yet gas prices are rising again.  I am not an economist or an energy expert, so I’ll skip the explanations for all of this, but the truth is, gas is going up again.

While I thought the impact on churches three years ago was going to be significant, I now believe the impact on churches may be catastrophic.  Here’s why I think this time the situation is worse.  In 2007-8, as gas prices rose driven by the futures market, the US and global economies were growing and stable.  The subprime mortgage securities crisis had not yet hit, despite rumblings from some investors and economists.  Employment was high, unemployment was low, jobs were being created, and the prospects for the future looked bright.  So what if gas hit $4, we’d just suck it up and keep going in our SUVs.

Of course, things were much worse than anyone imagined.  To prevent a global depression, Wall Street had to be bailed out, along with the world’s largest banks and financial insurers like AIG.  Add to that 2 of 3 US auto manufacturers, and you have  a recipe for difficult days financially.

What does this have to do with churches?  The rise of fuel prices will drive increases in the costs of other consumer goods and services.  With unemployment at 8.8% — although some economists estimate the “real” unemployment rate at close to 15% — more Americans are out of work, not counting the ones who are under-employed, or employed on a part-time basis.

There is no doubt the federal government is going to reduce spending beginning now, which will lead to the termination of many government programs, and further unemployment.  Fewer services will be provided by government in the near future, including (if Paul Ryan has his way) major overhauls of Medicare (medical care for the elderly), and Medicaid (medical care for the poor).  The Federal Reserve is also making noises about raising interest rates due to fears of inflation fueled by rising prices.

All of this will have the following impact on churches:

  1. Church members will have less discretionary income and will contribute less to charities, including churches.
  2. As gas prices rise, most of us will curtail our driving habits which includes multiple trips to church in separate family vehicles.
  3. More Americans will lose services that are now publicly available.  There will be increased need for churches to do more to feed, house, care for, and assist the elderly, the sick, and the poor.
  4. Church budgets will suffer from the double impact of falling contributions and rising needs.

What point am I trying to make?  Get ready.  Begin now to prioritize your church budget.  Decide what your church is really going to be about.  Prepare mock budgets based on different scenarios which emphasize different ministry priorities.

I believe that we will see single cause churches, much like we have single cause non-profits.  There will be churches that focus on senior adults, or single parent families, or families with special needs children.  Why?  Because smaller churches especially will be unable to “be all things to all people.”

We are on the front end of this economic realignment.  Churches, I believe, have an obligation theologically to make the tough choices to minister to the most vulnerable in society, even if the popular political position is the opposite.  We will soon face those choices, and because we are approaching another presidential election cycle, do not expect solutions from either major political party until at least 2013.  What do you think?  Will rising gas prices and other factors impact churches? Why or why not?

Recession, the domino effect, and churches

dominosOne of the things I learned while I attended seminary in Texas was that dominoes are for more than lining up and knocking down.  Be that as it may, we’re headed for an ecclesiastical domino effect brought to us by an economy in recession — a recession, we were told today, that started a year ago.  Like those cascading dominoes, the economic effects radiated out from the subprime mortgage crisis, to investment banks, to real banks, to automobile manufacturers, to homeowners, and now to the religious community as well.  

In an informal poll conducted October 15, 2008, I asked the question, What impact is the economic crisis having on your church?  

  • 17% said it was having no effect.
  • 42% said their church offerings were down.
  • 22% said their church was cutting spending.
  • 17% said their church was cutting their budget for 2009.
  • 2% answered “other” which I take to mean the economy is having an effect I did not list.

In other words, 83% noted a negative impact of the economic crisis on their church.  Spin that out to missions offerings, local ministries supported by churches, and parachurch groups whose support comes from churches and their members and you have the makings of a religious financial reordering.  Robert Parham of Ethics Daily noted today that denominations from Episcopalians to Presbyterians to Baptists are facing budget shortfalls, staff layoffs, and programs cuts all due to decreased revenue streams.  Not only are regular contributions down, but investment income has been cut as the stock market plummeted in recent weeks.  

What does all this mean?  I think there are several implications:

  1. Churches, parachurch ministries, and individual church members are all affected by this economic tsunami.  Our church’s stock holdings have declined over $40,000 in a few weeks, losing almost 50% of their value.  
  2. Fewer dollars will be available to support the local church, and fewer dollars will be sent on to denominational headquarters, and parachurch ministries.
  3. Some faith-based organizations will go broke or be downsized, succumbing to economic forces that cut off credit and squeeze contributors.  
  4. Hard ministry decisions will be made as budget shortfalls loom.  The local church will pass along this economic reordering to denominations and parachurch ministries which will also cut staff and programs to the bare essentials.  
  5. Organizations that survive will not be the largest or the most well-known.  Organizations that weather this economic storm will be those that can adjust quickly and rally supporters while still maintaining their core mission.  But that may not include denominational headquarters which might be viewed as more bureaucratic than independent or church-based ministries.  
  6. Theologies of ministry may get reimagined as choices are made between feeding people physically or feeding them spiritually.  Those are not always exclusive choices, but may be in this economy.  
  7. New voices will emerge from the wreckage of old models.  With waning influence and declining budgets, the 80’s culture wars will seem oddly out of place in the face of real human need.  New champions of Christian compassion will be heard above the din of religious posturing.  The Millennial generation will lead this new non-dogmatic activism.  
  8. More volunteers and new movements will start new ministries, jumping into the void left by budget cuts in government, secular helping organizations, and older Christian programs.  
  9. Christians will reorganize themselves across denominational lines, cooperating and collaborating with other faith groups and secular agencies to achieve common goals at the local level. 
  10. Decentralized, local grassroots efforts will spring up replacing top-down denominational campaigns.

The wreckage of the consumer age may yet usher in a new concern for doing good in God’s name.   As economic conditions worsen, we could also see a cascade of compassion in the name of Christ.  That’s a domino effect we could live with for a long time to come.

If only one person gets saved, is it worth it?

“It will be worth what we’re spending if only one person gets saved.” That comment came from a deacon when I was serving a previous church.  He was referring to an expensive project we were undertaking. I nodded in agreement because his sentiment seemed so right. But after thinking about it some more, I decided he was wrong. Here’s why:

  1. Good stewardship demands good planning. Throwing money at a project without careful planning can’t be justified whether it’s done by a church or government. Even if a church has plenty of money (most small ones don’t) adequate planning must be done to assess need, plan action, and specify outcome.
  2. Return should be proportional to investment. For instance, we did a mailer to our entire area for a Christmas program 3 years ago.  The direct mail piece, postage, and other expenses ran about $2,500.  We mailed to 5,000 households expecting a 1-2% “return” of folks actually attending the program — in other words, 50-to-100 new people attending.  Our normal attendance for events like that is about 100.  Our actual attendance that night was 188.  So, we were right on target with our goal.  The next year we did a similar mailout which produced very little response.   We dropped the mailers after they did not produce the results we sought.
  3. Limited resources should be employed to produce the highest result. Often there are cheaper ways to accomplish the same thing.  Rather than use a mailing list or service, have your church members develop your own mailing list.  Or better still, have your members mail personalized cards or invitations to their circle of influence.

Dr. Donald McGavran founded the church growth movement out of a desire to see specific results and measurable outcomes from field mission work.  McGavran thought there should be some accountability of effort-to-outcome on the mission field.  I’m not sure how Dr. McGavran would have answered the question “Is it worth it if only one person gets saved?” but I think he would have wanted to fix a system that only produced one convert in the face of disproportional expenses.  What do you think?  I realize I’m going to get lots of comments on this one, so please be kind. 🙂

Watching the economy while tending the flock

On November 21, I posted If gas hits $4/gal, what will your church do? Comments indicated some thought it was not going to be a problem, others were keeping a close eye on economic developments. This week 5 economic items of interest all converged:

  1. Low consumer confidence. According to government economists, if consumers spend less, then fewer goods are purchased, fewer manufactured, more jobs lost, and unemployment rises. Consumer confidence hit a 5-year low this reporting period.
  2. Rising gas prices. Oil routinely closes above $100/barrel now. $4 per gallon gas is predicted for this spring. Consumers will likely conserve by making fewer trips, and church might be one of the places less traveled to.
  3. The subprime mortgage crisis. Note that banks, mortgage holders, and investment banks are writing down billions of dollars in bad loans. Most economists believe this is far from over, with lots of foreclosures, tight credit, and more banks in trouble.
  4. Weak dollar. I don’t understand a lot about economics, but I get this one from my international travels. When you enter a foreign country, you exchange your good ole US dollars for local currency. A weaker dollar “buys” less foreign currency, therefore you have less money to spend. Other implications also exist, particularly in our national debt, but those aren’t good either.
  5. Recession talk. It’s out there — the R-word. Recession is being talked about for all the reasons I mention above, and then some.

What does this mean for churches? Churches that practice good stewardship will have fewer problems. Churches that have borrowed to fund building expansion or other projects might face some difficulty. I believe we are in a period of economic uncertainty, and churches would be wise to watch the economic indicators all around them.

Our church is in an area that is undergoing tremendous economic change, and it does affect churches here. Lost jobs, lost wages translate into fewer contributions, plus families move to take jobs in other communities. So, churches can lose not just money, but members, too. What do you see happening in your community? Are your members discussing economics? Are companies in your area hiring or laying off? What steps is your church taking, if any, to weather an economic slowdown?