Since going into full-time ministry in 2006, the last two years had more stress, anxiety, exhaustion, and disappointment than all the other years combined. And I’ve experienced a church split and a Lead Pastor departure that created enough conflict to require the services of a church consulting group. To be clear, I don’t think those in ministry are the only ones adversely impacted by the far-reaching impact of the COVID-19 pandemic. The shutdown’s effect continues to linger in every sector, from restaurants to schools. But, the pandemic acted as an accelerant in the already established trend of declining church attendance and donations. The most recent Barna study on church attendance shows that of Christians who attended church regularly before the pandemic, 16% have stopped attending entirely since the pandemic. Couple that with the GivingUSA data that shows churches are no longer a priority to donors; instead, churches are just one of several giving options. While this sounds bleak, churches should view these new realities as opportunities. It’s time to rethink the methods used to fulfill the great commission.
Opportunity vs. Obstacle
In light of these sobering statistics, many churches need to reduce their budget. If your church, like many others, falls into this category, be encouraged. Instead of viewing the reduction of the budget as a loss, see it as a way to refine the mission and vision, streamline and improve processes, allow staff to equip teams of volunteers to do the work of the ministry, and ultimately build a healthier church. For churches that have not had to go through this process before, it can be confusing, overwhelming, and daunting to know where to start.
Healthy Church Metrics
Someone once said that when you compare, it usually brings about either pride or insecurity. But, that’s not true when the motive is to measure health. We often measure blood pressure against the standard range of 120/80. It’s not an issue of pride or insecurity if someone’s blood pressure is outside the healthy spectrum; it’s a matter of health, maybe even life or death, so view church metrics of a healthy church in the same way. Here are a few indicators to see if your church is outside healthy parameters in critical areas:
- Compensation: The most significant expense in most churches is paying the staff. In a healthy church budget, compensation, which includes salaries, housing allowances, and benefits (medical, dental, vision, life insurance, and retirement), should run about 45%-55% of the entire church budget. Another factor to consider when it comes to compensation is the ratio of FTE (Full Time Equivalent) employees to the number of congregants. A healthy church would have about 1 FTE per every 76 attendees.
- Facilities: The next big area to evaluate is the building. In a healthy church, facility expenses range from 20%-40%. Facility expenses include mortgage, maintenance, custodial, insurance, etc. In a post-pandemic world dealing with inflation not seen in 40 years, rising interest rates and increased cost of utilities and supplies may push this area of the church budget to the limit. Looks for opportunities to postpone capital improvement projects or renegotiate service contracts.
- Ministry: Finally, the ministry budget for a healthy church should be between 20%-35%. These budget items include outreach, missionary support, service expenses, care, children’s, young adults, and adult ministries. Evaluate if compensation and facility costs are reducing the ministry budget and preventing your church from healthy growth.
Evaluating your church percentages to the healthy church percentages will indicate the areas to improve. Much like blood pressure that doesn’t fall into the healthy range, you have options ranging from lifestyle changes to taking medication to ignore the test results. What is your church willing to do to get healthy?
Another marker of a healthy church is that 39%-47% of adult and student attendance voluntarily serve at their church. Utilizing volunteers is so much more than indirect savings to the budget; it refocuses the staff on their role of equipping volunteers to do the work of the ministry and releases the people in your church to use their gifts to build up the Body of Christ. In the process, it generates a much deeper level of buy-in from those who call your church home. Find ways to engage your church and provide multiple opportunities to serve.
Suppose donations are lower than the church budget and have a staff-to-attendee ratio of less than 76:1 and less than 39% volunteerism. In that case, this is an excellent place to take a hard look at how to move your church into a healthier position – financially and operationally.
Fund the Mission and Vision
Once your church has identified the areas that are out of healthy church budget ranges, it’s time to act. A word of caution, define the why before moving to the what, how, and even who. Over time many churches start programs, fund ministries, and hire staff that drift from the church’s mission. In times of economic downturns, evaluating everything through the lens of the church’s mission and vision is more critical than ever. Knowing that your church exists to (insert your church’s mission here) empowers the church leadership to make decisions to move forward and get healthy, even if it means doing so without specific programs, ministries, positions, and even staff.