It is budget development time. It is stewardship pledge time. Increasingly, the two sets of numbers (anticipated income vs. anticipated expenses) don’t match up. Our congregation is shrinking at a fast rate, and I believe it’s only a matter of time before we will have to make tough decisions. I’m seeking counsel as to how to go about those tough decisions – what (and who?) to cut, how to do it with integrity, communications and preparations to be done in the wake of such decisions.
We’re (“we” is our governing board) currently developing our 2012 budget, and to estimate our income, we use a quite accurate formula based on the amount that people pledge. This budget will go to the congregation in January preceeding our annual meeting. For this year, we allowed ourselves permission to take the $14,000 discrepancy if needed from reserve funds. (I estimate we’ll end up taking about half of that). That’s not sustainable, nor the kind of practice you want to do habitually!
Other than nickel-and-diming ourselves to death, there are two logical pots of expenses from which to cut: staff, and apportionment money sent to the larger denomination. The voices who care about being connected responsibly to the larger church get fewer and fewer each year, and the temptation of reducing the amount we send – or cutting it altogether – is always there, and increasing. I don’t know how long we can hold off such attempts.
Regarding staff – as a shrinking formerly middle-sized program church, we probably are overstaffed, but haven’t yet faced this hard truth. I can’t imagine how one goes about making those decisions of who to cut and how, and don’t welcome that task! Of course, my salary and benefits are by far the greatest expense. My leaders want to make sure that my compensation doesn’t lag too far behind the denominational guidelines – for which I am grateful; but they’re not so conscientious about the other staff members’ compensation. I am uncomfortable about the gap between my compensation and that of others’ (I think that may be a female thing), and the truth is that our household income is quite comfortable – I don’t need a raise. And in fact, don’t “need” what I make now. But I know it’s not helpful or healthy to enable poor stewardship by sacrificing so folks don’t have to give as much.
I would welcome the experience and advice of others who have navigated through the thicket of budget shortfalls – how do we do this wisely, well, and with integrity?
Jennifer, blogging at An Orientation of Heart, offers the following:
Your observations are all thoughtful ones! Church budgets in difficult economic times are challenging.
As a pastoral leader and an administrator, I think it’s important to ask framing questions, in order to be clear about your desire to help the congregational leaders make good decisions that reflect their theology and the values of the congregation. For instance, our congregation is quite clear that when we have lean years or concerns, we look at mission LAST as a place to make budget cuts. We have frozen salaries, cut back on program expenditures, looked for revenue from other sources, but mission and denominational support are seen as important commitments and priorities we wish to uphold.
I hope you have a thoughtful personnel committee that does regular salary reviews so that they’re compensating staff fairly across the board. We talk about the budget and about giving all year long, and while we often have a lean period of giving in the summer, we spend the fall months catching up and usually complete the year able to meet all of our commitments. If you’re concerned about being overstaffed, it might be helpful to suggest a review of the staffing rationale for the congregation—and perhaps your denominational representatives could help with that. It’s awfully hard to assess these sorts of things from within.
I hope some of these rambling thoughts help. Blessings upon you and your congregation as you discern a path for the future together.
Kathryn adds these thoughts:
Wow, what an incredible timely question - you are certainly NOT alone.
In my experience the key ingredient to these tough decisions is: communicate, communicate, communicate. Communicate early. Communicate often. I would start with the governing board (maybe even combined boards) in January - post the setting of the 2012 budget so that it does not look like there is an ulterior motive. Start talking about what is important to everyone and try to steer away from the unhelpful conversations (if we brought in 10 members per month we could meet budget).
Ask the hard questions:
- Is the money out there and we're just not getting it? (Meaning: if we need to replace the boiler, will folks step up or are they really out of funds?)
- Do we need to downsize staff (which includes lowering expectations of the programs) and if so, how do we do so with integrity and in the way we would all want to be treated?
- Why do we exist?
- How long can we sustain the practice of dipping into the reserves/endowment?
That last question is key as so many churches right now are struggling to pay bills, but sitting on huge reserves/endowments in the name of saving for a rainy day. Friends it is POURING!
As for the apportionment - it's a slippery slope. And once the church is not paying that and STILL struggling what does that leave? A still broke church that now has no connections!
The bottom line is that you want their decisions to be THEIR decisions as they will have to live with them for far longer than you are in their presence. Prayers ascending for you and so many who are in similar situations.
Thanks to Jennifer and Kathryn for their thoughtful responses...and thank you in advance for yours. Please add your two cents (or more if you can spare it!) by posting your comments below.
May you live in God's amazing grace+