Keys for Overcoming Your Church's Financial Crisis

Written by Keith Hamilton

June 18 was the first Sunday Brother Randy Smith noticed the offerings starting to drop. As the church treasurer, the decline in offerings did not seem like a big deal, but now, a month later, it was becoming more difficult to pay the church bills. Brother Randy did not want to do anything to harm the recent church growth of young believers. However, if something did not change, the church would not be able to pay its bills.

Church Administration Handbook - Third Edition

Almost all churches have faced a financial crisis at some point of its life. How the church leaders react to these financial hardships will impact the church for years. In Matthew 18, a general course of action is laid out by the gospel writer. If the church treasurer or financial secretary will follow these steps, the financial hardship might be able to be reduced or eliminated without harming the fellowship:

The church treasurer or financial secretary should meet privately with the pastor or chairman of the finance committee to discuss a corrective course of action.
If the first private meeting does not solve the problem, then a course of action should be discussed with the finance or stewardship committee.
The final step should be exercised only after exploring the first two steps. The next step is for the appropriate person or committee to bring the financial crisis before the church fellowship for corrective action.

A three month emergency fund.
Many temporary church financial crises could be avoided or reduced if the church exercised sound financial planning advice. Privately, individuals are encouraged to establish a three month emergency fund of cash reserves to help financially in a personal crisis. Likewise, churches need to establish a three month emergency fund of cash reserves to be used during a financial crisis. The church’s emergency fund will allow the church treasurer/financial secretary or finance committee time to develop a course of action when a financial crisis occurs. The church’s emergency fund will give the church committee time to develop a course of action that is planned carefully and prayerfully without operating in crisis mode.

Is the financial crisis temporary or ongoing?
If the church finds itself in a financial crisis, then the appropriate committee charged with overseeing the financial crisis should try to decide if the financial crisis is temporary or ongoing. If the financial crisis is temporary, then the financial committee should share with the core group of church members on Sunday or Wednesday night the financial need. The financial committee should be positive and explain that they expect this financial crisis to be only temporary. However, the financial committee still needs to encourage the core group to consider giving “extra” offerings to help the church over this temporary shortfall. If the financial crisis is temporary, the financial committee should give a regular “informal” report to the core group of the church’s progress of overcoming this financial shortfall.

Corrective Action.
If the financial crisis is determined to be ongoing, then more decisive action should be developed. The financial committee should inform the church of realistic plans of corrective action. The financial committee should try to be positive, but realistic in their approach to solve this crisis. During this difficult time, one person like the church treasurer should not be placed in the difficult position of deciding which bills or invoices should be paid. The financial committee should direct the church expenditures until the financial crisis has been eliminated. In advance, the financial committee should decide what order the bills should be paid. For instance, which bills should be paid first: the church staff salaries, missions, utilities, or benefits?

A realistic spending plan.
The committee should also develop a realistic spending plan or new church budget that reflects practical spending patterns. Sometimes, committees tend to overact when recommending a new budget. The committee needs to work hard to avoid blaming someone or being negative during this phase. Often a church finds it necessary to bring in an outside stewardship consultant to develop a church-wide stewardship campaign. Also, the financial committee might consider avoiding or delaying any major expenditure during the crisis.

Purchase order.
Finally, many churches will start a purchase order system as a means of controlling expenditures during a financial crisis. If the financial committee does not develop a practical and realistic approach to solving the financial crisis, then the financial crisis itself will solve the problem with an approach that might destroy the church.

Christ gives the church words of encouragement in Revelation 22:13. He reminds the listener, “I am Alpha and Omega, the beginning and the end, the first and the last.” No matter how deep the financial crisis appears, Christ’s church will remain victorious because of the hope found in the Risen Savior, Jesus Christ.

About Dr. Hamilton

Keith Hamilton, D.Ed.Min, CFP, CRPC is with the Georgia Baptist Convention. He has written several publications on establishing church designated funds, managing your household finances, and protecting your church and ministry from identity theft. Check out www.churchfinancialservices.org for more help. Other articles by Keith...

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