Is Your Church Approaching a Financial Cliff?

Is Your Church Approaching a Financial Cliff?

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Photo by Dennis Wagenaar on Unsplash
By Charlie Kuchenbrod and Susan Townsley

Is your church approaching a financial cliff? Wondering how to avoid going off the edge? Read on for a primer on how churches wind up on the edge of the cliff, and to hear about some upcoming learning opportunities to help reverse direction.

The Fiscal Cliff is the dramatic budget deficit that occurs “suddenly” when a church has been using up assets to support the operating budget and then assets run out.  A church may be moving merrily along and suddenly come upon the realization that there is no going forward: the cliff is right here.  Still, could it have been foreseen?  Could assets have been employed to explore new options rather than consumed propping up a budget that is not sustainable?
 
There are tools that can be employed to map out the journey ahead and anticipate the challenges.  In this way we have the opportunity to employ innovation, restructure, restarting, sale of building, partnering and other such strategies, long before we get to the financial cliff.
 
Financial Forecasting:
Church leaders need to forecast the financial future 3, 5 and 10 years out.  No one can predict the future, so it is useful to create a “best guess” forecast and then create more optimistic and pessimistic forecasts.  Actual results can be tracked to determine which forecast is most accurate.
 
Communicating Urgency:
Realizing that the cliff is coming before you get there can create a sense of urgency, and urgency is a gift.  Without urgency, you can stay on the road to slow death until there is no turning back. Change management expert John Kotter names “creating a sense of urgency” as the first task towards change.  Church leaders need to communicate that “The cliff is coming!  The cliff is coming!”  Not to induce panic, but to help the whole church grasp that a time may come when the congregation cannot afford the building, or all of the existing staff.
 
How to do this?  The results of the financial modeling need to be shared with everyone in the congregation, and shared repeatedly.  Still, not everyone responds to the numbers.  Therefore leaders should employ playful and creative ways to depict the impact.  How about a worship service without heat?  Let people know in advance, and make it short.  How about a coffee hour with no food and no coffee?  A more dramatic, but perhaps more accurate, enactment may be to close church altogether for a week. Dramatic? Yes, but when the future is potentially dire, the dramatic may be the best way to bring urgency to the community.
 
A holy urgency will enable the church to cultivate the discipleship to follow Jesus into the new day.
 
Pathway Exploration:
Churches can dream up a set of possible paths forward that take advantage of the particular giftedness of the church.  Events to play, laugh and dream can surface a number of ideas.  Prioritize about 3 to 5 paths to be the focus of exploration (if there are more, don’t discard them, just set them aside for now).  Teams can be created to engage in serious and energetic exploration.  If a pathway, for example, is to begin a music school in the church, the church should study the marketplace, assess the need and develop a business model.  If it becomes clear this pathway is not workable, then move energy to another pathway. 
 
Resources:
We (Charlie and Susan) will be hosting Zoom webinars to help church leaders undertake appropriate steps to anticipate the future and take steps to cultivate new approaches.  The following Zoom conversations are scheduled:
July 10, 7:00 PM: Financial Forecasting and Communication
September 17, 7:00 PM: From Maintenance to Mission
October 16 at 7:00 PM: Leadership Tools for Change

To sign up, please go to ctucc.org/wilderness
 
Recordings of these webinars will be posted after the event.

Authors

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Charlie Kuchenbrod

The Executive Associate to the Conference Minister oversees the Finance and Development Team of the Conference staff, and directly supervises several of the senior staff members.  

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Suzi P. Townsley

Associate for Innovation, Leadership and Change

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