Address Financial Shortfalls
Sometimes through budgets, we anticipate that expenses will be greater than income during certain periods of the year, while overall, we expect to finish the year in the black. In this case, a plan is made for internal or external borrowing to bridge the gap.
A different scenario occurs when expenses exceed income for sustained periods of time, veering to deficit spending for the year. In these cases, it’s natural to think that the solution is to cut spending. While that may ultimately be needed, perhaps there are opportunities to inspire members and constituents to grow in their discipleship and increase support of the mission and vision of the congregation (see “Emphasize Stewardship and Discipleship Year-Round” in the Stewardship module).
Be aware that people typically are not motivated by fear or anxiety or a sense that they are being asked to further fund a sinking ship. While numerical analysis is essential for finance teams, stories of how a congregation makes a difference are often better able to spark generosity than spreadsheets, bar charts and percentages. Communication is essential. Always aim for the right mix of hopefulness and prudent discernment and deliberation.
When spending cuts are needed, think about the size of the necessary reduction with an awareness of what programs, staff and capital improvements cost. No doubt your payroll expenses (including benefits) and building expenditures will represent the largest portions of your budget, meaning these decisions will be difficult ones.
The underlying challenge with and without shortfalls is having a culture and mission and vision that people want to be part of, communicating it regularly in inspiring ways, and programmatically implementing that vision affordably given actual levels of support.