Getting by when churches have to make do with less

by: Dan Hotchkiss

Our parents’ and grandparents’ memories of the Great Depression are not fond ones, but they came with a silver lining: When you’re making do with less, you learn what really matters.

Having less is no fun, as many church executives are finding out. Whether unpaid pledges, unmet campaign goals or plummeting investment funds, the fiscal story over the last several months for congregations has been challenging. It’s a situation no one would have chosen, but here it is; we need to make the best of it.

Americans are out of practice with making do with less. Between 1950 and 1970, real income per capita—the amount of stuff each of us can buy with what we make—almost tripled. Congregations participated fully in that growth: During the same 20 years, the per-member revenue of denominational churches tripled. Our concept of the minimum a church needs to provide each member has grown with members’ concept of the minimum to which they are “entitled.”

Since 1970 real incomes have stagnated, but until recently, consumption has kept on growing. We made the difference up by borrowing: consumer debt, mortgage debt, and—especially since 2001—national debt. Reliable statistics about churches are hard to come by, but who can doubt that congregations have participated in this trend? Over the last 30 years, churches have become as comfortable with debt as families. And, with the same results.

“If you build it, they will come,” is a nice slogan, but not an eternal truth. Like families, churches can go into bankruptcy or foreclosure. Some have already. Others will if they don’t quickly tighten up their belts.

Where is the growth?

The good news, such as it is, is that spending more per person does not seem to spell success for congregations. The denominational churches that increased their standard of living most during the postwar decades are the same ones that declined in influence and numbers.

And who grew? Lean, mean, mission-oriented churches operating out of storefronts and warehouses, using clergy without seminary training and musicians without highbrow credentials; big congregations with low costs per worshiper. And, online ministries whose marginal cost for increased volume comes as close to zero as a cost can come.

This is nothing new. Throughout American history, most churches start lean and get fat. As they invest more in perpetuating their institutional life, new converts lose interest. Over time, churches that began as earthshaking religious movements accommodate the culture, accumulate capital, and increase operating costs. Churches that do not continually renew their interest in future members eventually lose their edge.

Does your church have a mission statement? Probably. Does it say whose lives you plan to change and in what way? Probably not. The typical church mission statement is either a vague bumper sticker or a catalog of every program and activity with a strong enough constituency to raise a fuss if it were left out. In theory, mission statements reflect hard choices about priorities; in practice they too often reflect leaders’ preference not to choose.

Here is where an economic crisis may conceal an opportunity. When budgets grow, leaders find it easy not to choose. They say “yes” to every question. When budgets shrink, leaders have to say “no” sometimes. In order to say “yes” to what is central to the mission requires saying “no” to cherished, praiseworthy, excellent, and long-established—but peripheral—activities simply because they are not central to the mission.

Refocusing on the core

It is not easy to take advantage of this opportunity. During the Great Depression, the established, mainline churches suffered, but their decline accelerated. I suspect one factor is that most of them gave priority to preserving the externals of church life—clergy, staff and buildings. And, with too few exceptions, they didn’t take advantage of the slowdown to refocus on the core, distinctive gifts each congregation offers people.

What needs to be done? On one level, it’s a simple business calculation: If you believe, as most economists do, that this recession will be deep and long, your church needs to cut costs or find new revenue, and soon. From a business point of view, the time to act is early. Politically, this may be difficult, because the seriousness of the recession may take awhile to sink in with your decision-makers.

If parts of a large plant need to be sold, closed or rented in order to save cash, it’s better to do it sooner than later. Selling unused real estate may seem unwise in a down market, but remember not to fall victim to the “sunk cost” fallacy that leads gamblers to throw good money after bad. The fact that an asset has lost value does not mean you need to hang onto it. Unless you believe values are likely to rise soon, the price you can get today—however disappointing—is the true value of the property.

It is even more tempting to postpone needed staff cuts. Waiting for attrition—or even for the end of the budget year—only deepens the cuts that need to be made. That is the business calculus.

But money decisions in the church are never simply about money. To persuade decision-makers to make hard budget cuts and donors to open their reduced pocketbooks, leaders need to connect decision-making to a clear-eyed understanding of the congregation’s mission. That’s where the sense of urgency created by a global recession can actually create opportunities.

Because we all need to make do with less, it can be easier to get leaders to focus on distinguishing the core mission from the external, “nice, but peripheral” cost centers that naturally spring up when funds are plentiful.

Getting hit from both sides

If your church depends heavily on endowment income, it may be hit from two sides: decreased “draw” from the endowment, and wealthy contributors who feel less wealthy because of their own investment losses. Of course, wealthy people—even when their losses are great in percentage terms—do not suffer as a struggling family suffers after a job loss.

The philanthropic principle: ”From everyone to whom much has been given, much will be required” (Luke 12:48)  continues to apply. But we who ask for gifts can plan on being asked sharp questions by both rich and poor. “What difference will my gift make?” “Why your church and not some other?” In hard times, a glib answer to these questions will not do.

To satisfy the queries of potential donors who are making do with less, the church must separate the kernel of its mission from the chaff surrounding it. Mission-driven budget cuts are one way; a renewed focus of staff and lay leader effort is another.

In economic hard times, people need the church more than ever—to comfort them when they lose jobs, have to adjust their lifestyles or postpone retirement; to provide them with meaningful opportunities to serve those worse off than themselves, and to advocate for justice for the weak. In the process, we may gain new eyes to see the frills in our own institutional life and recommit ourselves to what is most essential.

Dan Hotchkiss, Middleboro, MA, is a senior consultant with The Alban Institute. www.danhotchkiss.com

Have churches become spoiled with all that the past economy had to offer and now unable or unwilling to make the needed adjustments?  I have seen churches make cuts but almost always in the things that never made sense to me, such as missionary giving, evangelism, discipleship and community outreach.  It stands to reason that those things are the areas that will cause growth, yet the first ministries that suffer cuts.  OK…what are your thoughts?

Andy