While They May Not Be Fun to Talk About, We Must Tackle Finances to Help Our Churches Grow
This is the final article in a series I’ve written that unpacks what our data is telling us about the differences between growing and declining churches. In the first three articles, I wrote about differences when it comes to ministry reach, ministry connections and ministry leadership. In this article, I’m going to focus on ministry finances.
Remember, this reflects real data from real churches. This isn’t my opinion or just theories on why churches grow or decline. These observations are based on actual results. We pulled data from the churches that have either grown or declined in attendance by more than 5 percent in the last year. This has nothing to do with the size of the church. Both sets of data include churches that are smaller than 100 in attendance and larger than 2,000.
- Differences Between Growing and Declining Churches: Ministry Reach
- Differences Between Growing and Declining Churches: Ministry Connection
- Differences Between Growing and Declining Churches: Ministry Leadership
- The Money Series: How Much Should Churches Spend on Their Staff?
With that introduction, here are some of the key differences we found when it comes to ministry finances:
Declining churches spend more money on staffing
Churches that are declining spend 54 percent of their overall budget on staffing expenses including wages and benefits. Growing churches, on the other hand, only spend 50 percent on staffing expenses. As I mentioned in a previous article, declining churches also have more full-time equivalent staff members than growing churches, so this wasn’t very surprising that they spend more money on staff.
Per capita giving is higher for declining churches
Significantly higher. Each person in a declining church is giving 34 percent more than the people who attend growing churches. This confirms what I’ve written about in the past that there’s a giving lag in growing churches. In other words, attendance increases faster than giving. This is particularly true for churches who are are reaching people outside the church and outside the faith. The giving lag also works in reverse meaning attendance decreases faster than giving. I wrote about this topic in The Unstuck Church. Healthy giving and finances is actually a common attribute of churches in the “maintenance” phase of the life cycle.
Both growing and declining churches have the same amount of debt
Of all the findings related to ministry finances, this was the biggest surprise to me. I would have expected declining churches with higher levels of giving to have less debt. And, because growing churches are…well…growing, I expected them to have more debt to fund expanding facility space to accommodate more people.
That’s the data, but here’s what the data tells me: Churches can’t spend their way out of decline. Instead, they have to be intentional about making some critical changes I wrote about in The Unstuck Church. They have to:
- Renew their vision and embrace the changes that are necessary before crisis forces change.
- Prioritize reaching new people and regain the focus of reaching people outside the church and outside the faith.
- Eliminate programming complexity and shift from adding programs to creating a clear path for spiritual next steps.
- Prune low-impact programs and events and reinvest those resources in initiatives to accomplish the renewed vision.
- Get outside perspective to help disrupt the inside voices that become louder over time.
So what’s your reaction? Any thoughts from these findings or those in the previous articles? Participate in the conversation on social media by using the hashtag #unstuckchurch.
Get more insights from our data by downloading The Unstuck Church Report.