Weathering the Financial Effects of COVID-19 on Your Church Budget Blog Feature
Erika Soerens

By: Erika Soerens on May 14, 2020

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Weathering the Financial Effects of COVID-19 on Your Church Budget

Church Culture | Community Impact | Relaunch Church

Churches have experienced economic downturns, natural disasters, and more. But previous to COVID-19 hitting the U.S., there has never been a period in modern history when faith communities have been unable to gather and church operations are so badly disrupted as they are today. This disruption has affected every aspect of church life, including giving toward the general fund—every church’s revenue mainstay.

Soon, your church will be able to return to your building. We want you to be ready.

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According to national results from the State of the Plate survey in April 2020, about 64% of churches have experienced a down-turn in giving since Coronavirus hit the U.S., and 47% of them are down more than 20%. That is a significant decrease in funding and can cause stress on a church and its ministry. 

Mike Stadelmayer, VP of Client Relations for Church Growth Services, a church capital campaign consulting firm with more than 60 years’ experience, says, “Churches all across America are re-evaluating their budgets to see how to survive this shortfall in funding and to respond to new ministry opportunities in their communities. While churches do annual budgets, they aren’t necessarily accustomed to scaling back their budget as significantly as may be required in this season.”

We asked Stadelmayer how churches should approach re-evaluating their general fund budget. Here are his insights:

Liquid Assets: Begin by analyzing your revised income projections in light of what’s happening at your church since Coronavirus moved in. Be realistic. In addition, consider your level of cash reserves. How long can you make payroll and meet obligations under current giving levels? Consider doing a cash flow analysis. While most church budgets are established for a 12-month period in equal amounts, the reality is your giving and expenses do not flow equally over the 12-month time period. Analyze the change in monthly cash flow and determine if your cash reserves are adequate to cover any deficit. (NOTE: Some expenses occur for a season and are not equally distributed over a 12-month period, such as VBS, summer camps, special events, Easter promotions, etc.)

Expenses: In reviewing your expenses, there are three general categories to consider: recurring operational expenses, ministry expenses, and staff expenses. Each category should be evaluated when going through a unique season of time such as this one.

The primary recurring operational expense is likely your mortgage or rent.  If you are carrying debt on your facilities, you should contact your bank immediately. Banks are already expecting a call from you, and you need to begin talking about what options you may have to reduce or temporarily suspend your payments.

Be familiar with these options:

          • Forbearance. No payments due. But be aware—when payment does come due, the entire deferred amount is payable at once. This is a last resort option.
          • Deferral. A season of time you defer payments and payments get added on to the end of your mortgage.
          • Loan Modification. Renegotiate terms of the loan, length of loan, or interest rate reduction. Many banks will allow interest-only payments for a season of time, which can reduce your monthly payment significantly. In addition, you should review all your merchant fees, insurances. and recurring subscriptions for services.

The second category is ministry expenses. Consider freezing all current expenses immediately, with no new expenditures or major new purchases. One approach that distributes the pain of reductions across the board is a percentage-based reduction of 5% or 10% across all ministries. This is the easiest but not necessarily the best approach.

A better strategy may be to trim all non-essential ministry expenses. This exercise is probably overdue. The reality is all ministries are important, but they are not equally effective. Key ministries should stay, and some ministries may need to be eliminated. What was once non-negotiable is now on the table. Use this opportunity to prioritize existing ministries and put yourself in position to consider new ministries that are now emerging.

Curriculum and subsidies for church camps and college scholarships along with deferring conference and travel items in the budget ought to be considered as well.

The third category is staff expenses, which is usually the largest but most difficult expenditure to cut.  Start by requesting voluntary pay reductions for some families who may not need the income and might value or be willing to take some time off. A second option is across-the-board percentage pay cuts, which spreads the pain, and all participate in the cuts.

At times it is simply necessary to eliminate some ministry or support positions. We don’t want to discount the pain and difficulty of such decisions, but sometimes it is the only way to survive so that the ministry can continue.

Finally, difficult times also provide opportunities, and the church may need to reposition some people to better respond to the ministry opportunities this crisis may offer. The church always responds to crisis and change in a way that enables ministry and the gospel to go forward. Just as God never lets a good crisis go to waste but responds in love, grace, and compassion, so should we do the same.

Zero Based Budgeting: One more option is to go through the entire budget with a zero-based budgeting approach, which could radically reduce expenses and focus resources on key ministries. The current crisis may create receptivity to this approach and provide opportunity to better align the budget to new and necessary strategic priorities of the church.


God’s church is alive and well and is best suited to rise up during times of crisis and change. These practical steps are ones your church may choose to implement, and Stadelmayer and Church Growth Services can help leaders process these options. Another tool that churches may find helpful in discerning what adjustments they can make in their budget is our "Key Questions to Prepare for a New Season of Ministry" downloadable PDF. This free resource provides a framework for churches to make decisions about how to move forward in ministry in the midst of COVID-19.


About Erika Soerens

Erika Soerens serves as Marketing & Events Specialist for Aspen Group. In this role, she coordinates Aspen’s live and virtual events and plays a key part in creating and managing projects for the Marketing team.