We have spent the last three weeks reviewing some of the major lessons that we have learned at Context Leadership Group over the last couple of years. There has been so much change in our culture and in our churches that it’s hard to keep up. Here is what we know for sure, the future of the church is in God’s hands. That should let us sleep at night.
God’s sovereign hold on the church does not mean that we can sit back and do nothing. We need to lead our churches into the future with a plan. That is what this series is about. We’ve talked about getting better and getting organized. Now it’s time to get cheaper. Churches across the country have seen significant downturns in giving and I think the trend will only continue as time goes on. So how do we respond?
In two ways, first, we need to continue to disciple our people in giving and call people to sacrifice. That’s the “supply side” so to speak. But we also need to rethink how we spend our money to reflect better the realities of our church budgets and the shifting priorities of our churches.
The decline we are seeing in attendance numbers across the country has yet to be reflected in the giving at most churches. This is likely because most of the people who were shaken loose from their church-going habits were fringe people who didn’t give meaningfully in the first place. We should resist the temptation to write those people off “because they weren’t really with us,” mainly because they are humans made in the image of God and in need of the gospel, but (in case you need another reason) they are also the most likely people to come back to your church when and if everything settles back down.
The decline in attendance, increasingly secularized and hostile culture, aging congregations, an uncertain economy, and the fact that giving was already declining nationwide means we need to start getting cheaper. We should expect that our giving will decline at a rate slightly slower than attendance, similar to how giving tends to lag behind attendance growth. I’d expect most church budgets to be slashed by at least 25% across the board in the next 5-10 years.
The first two ideas addressed this issue from a “top line” perspective. We need to get better and get organized so that we don’t shrink but can actually grow in the coming years. Our top line is all revenue and that tracks with church commitment. This section is about the bottom line. If our revenue was to decrease by 25% over the next 5 years, how should our spending be adjusted so that we can keep the doors open? I have some ideas.
First, most churches spend most of their budget on staff costs. This, combined with the fact that the second largest cost is often facilities and those are usually fairly fixed means that staff cuts should come first. The mistake I often see pastors make is to cut cheap people first, who are most often administrators and support people. I think this is a huge mistake.
Administrators make easy targets because they are mostly in the background and the congregation is less likely to feel their loss emotionally. They are also often not the breadwinners of their families so that makes it an easier cut to make. Easier doesn’t mean better and in this case, it means worse. Your first cuts should be your most expensive people, pastors.
Pastors tend to make more money, which means that you can cut one pastor and save as much money as two to three support staff. I know this sounds calculated, but we are trying to survive the apocalypse here. We have to be strategic about how to do that and cutting expensive things, even if they are valuable, is far more strategic.
Additionally, administrators are the ones largely responsible for making sure processes run smoothly and things get done. If you fire those people, not only will you not save as much money, you will have a much harder time getting more organized so that things don’t fall through the cracks.
If you think administrators aren’t valuable (you’re wrong), think of them this way. If you hire an assistant, who are you multiplying? You! Paying an assistant $20/hour is a great way to add more pastoral time to your calendar. You are likely the most effective leader on your team, which means that when you hire an administrative assistant, you are adding to the most effective leader for $20/hour. So, when you fire that person to cut costs, you are not only saving less money, you are making yourself less effective.
I know your pastors are valuable and they are your friends. I get how hard this would be. But not only are administrators very valuable, but it’s also far easier to find men in your church who want to be elders and will share the pastoral load with you than it is to find capable people who are willing to manage systems and processes. Do you know all that leadership time you gained by hiring an assistant? Spend it on leadership development and get yourself some lay elders to share the work with.
Staff is by far the easiest place to cut fat from your budget. But it's not the only place. There is likely fat in your ministry budgets and facility costs that you can trim as well. Be ruthless at first and cut as many nonessential ministry and facility costs as possible. It's easy to add them back down the road if your giving doesn’t decline as much as you expected.
The one area to not cut is savings. We recommend that you work with an 80/10/10 budget. 80% of your giving should be spent on ministry expenses (staff, facilities, ministry), 10% should be given away and 10% should be saved. You will want a nest egg to sit on in case things get bad or an opportunity fund if the right thing comes along in the next ten years. Not everyone can do this right away but the 80/10/10 budget should be your long-term goal.