3 Key Reminders for Churches During a Financial Crisis

by Emily VerSteeg

The world has changed a lot in the last few weeks. Little things that we have taken for granted like running to the store for a loaf of bread are not so easy and convenient now. As the church, we are facing a lot of new challenges as we try to encourage and minister to our staff and congregation, reach out to our community, and manage internal concerns over finances and ministry continuity.

As you navigate the changing realities of life and how you do church, here are three financial considerations to help you over the coming weeks and months.

Get a clear picture of where your church is financially. If you haven’t done a detailed cash flow projection before, now is the time to do so. A cash flow projection is simply a breakdown of the money you expect to come in and go out of the church over a time period such as 4-6 weeks.

Once you understand and predict the flow of money in and out of the church, you need to commit to financial transparency with your congregation and make them aware of the financial challenges the church may or may not be facing. As difficult as it may be to present the financial reality, the church community loves to rally around an opportunity and help resolve problems.

In addition to communicating to your church family, you may also need to talk to your lender. Lenders are much more willing to work with you before the church has reached the point of missing a debt payment or not being in compliance with loan covenants. Many banks are announcing special support and assistance to those impacted by the coronavirus, so it is important to reach out sooner rather than later.

Don’t forget internal controls. If most of your staff is working from home, there may be limited staff onsite making the segregation of duties and internal controls around processing donations and expenses much more challenging. You will want to be diligent about monitoring online banking. Management may also need to implement alternative or mitigating controls during this time. Unfortunately, phishing and spear phishing attacks will probably increase so insist your employees call an email requester before wiring funds, sending a check, sending sensitive information, changing direct deposit accounts or updating system settings.

Communication regarding gifts with donor restrictions is key. As mentioned earlier, congregations love the opportunity to rally around a cause and help resolve problems. If you decide to take up a special offering and/or set up a restricted fund to help your community during this time, we recommend you give it a more generic name such as Community Benevolence or Community Outreach and not call it the Coronavirus Benevolence Fund. This will give you more flexibility in how you may use any remaining funds after the corona virus pandemic has ended for other community needs. In addition, you may want to add a disclaimer to your communication including your website such as “All gifts are used as restricted. However, in the event that this community outreach project becomes overfunded, your gift will be applied to a similar community outreach project”.

We are definitely in unchartered waters and uncertain times. We are facing a lot of unknowns, but the one thing we do know is that God is in control. Just as God told Joshua in Joshua 1:5b “… I will never leave you nor forsake you,” (NIV), we can trust Him to deliver us in His time and in His unique way. Our responsibility is to stay calm and confident in Him, responsibly follow our state and national guidelines for our safety and the safety of others, take our next steps in faith, and not forget to thank Him for our daily provision and praise Him in all things.