Dave Odom: What to do when money gets tight

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Don’t begin the conversation with the expenses to cut. Instead, focus on your organization’s assets and how they can be leveraged in service of your missional impact, writes the executive director of Leadership Education at Duke Divinity.

The email lands with a thud in the pit of your stomach: “The budget is down. We need to tighten up and reduce spending for the remainder of the year.”

How are you supposed to do that? Not travel? Not offer programs? Not serve lunch at meetings? Would those strategies even be enough?

Many congregations and other Christian organizations have a substantial portion of their budget committed to “fixed costs,” the personnel and building expenses the organization is committed to pay. The program expenses are often about 25 percent of the overall budget. These expenses are the easiest to reduce, yet it does not take long before the program staff does not have enough money to do its work.

Nearly every congregation and organization I know faces this challenge. The causes are varied, but the story is the same: the program director is expected to do the same work with less and less money.

How can we shift this conversation to something more productive? What questions could we raise before the email arrives and the cuts are required?

A fruitful conversation begins with understanding the assets of the ministry. What are the strengths of the organization? Do they lie in the building or the staff or the reputation? In whom does the community place trust? How do the strengths contribute to the mission of the organization? What is the impact of the mission in the community? Which strengths contribute the most to the mission, and why?

These questions are difficult to answer. It can be even more challenging to try to connect assets to revenues. The simplest place to begin might be the use of the building. Can the building be used more often to expand ministry and revenue?

For several generations, congregations in the United States have been key community institutions, contributing to developing other faith-based organizations like schools, hospitals and social service agencies. These congregations have understood themselves as charities that can offer money, space and time. Such generosity has been possible because leading members of the community have been members of the various congregations. The members have given generously to the church, and the church has been able to pass that generosity to the community and ministries around the world.

In some places, congregations continue to hold this central place in community life. But in other places, it is no longer expected that community leaders will join congregations. It is true that those who do have religious affiliations continue to be measurably more generous in charitable giving than those who do not. According to the Lake Institute on Faith & Giving, the average annual contribution of individuals with religious affiliations is more than double that of those without such affiliations. Yet fewer people are coming to church, so the offering plate contributions are not keeping pace with congregational missions.

In the past, congregations could separate the revenues that support the work from the work itself. But in an era of fewer contributions and continuing need, congregations have an opportunity to think differently. How can congregations shift from thinking of themselves as charities?

The Christian faith provides a clear vision of what thriving communities and human flourishing look like. Such a robust vision is often lacking in distressed communities. Sharing the vision, along with practical ideas of how to contribute, is a great gift. We don’t have to give all the money we generate to a project or refuse revenue in return for our contributions.

What might happen if Christian organizations partnered with residents and other leaders to establish businesses that would contribute to the economic health of a community? What if congregations worked with others to provide essential services that young people or children need to thrive? What if part of the purpose was to pay living wages and return an appropriate portion to everyone who invested in the enterprise, including the congregation?

Facing the economic realities of our work requires looking at the work itself. What difference are we seeking to make in the world? Who cares about that difference? How can everything the congregation does contribute to that difference? How can the money that is invested contribute to an impact that is sustained over time?

A youth minister in Vancouver, Washington, started a lawn care business because he realized that he had deeper and more significant conversations working beside young people than he did in youth group meetings. I recently visited Matt Overton and his congregation, Columbia Presbyterian Church, because I wanted to know why the church’s senior pastor and session (governing board) had agreed to support the lawn care business.

I learned that the church has long studied missional theology and had intentionally called a pastor with a similar passion. The lay and clergy leadership understand the difference the gospel makes, and they recognized the difference-making potential in the idea of the lawn care business. They valued paying a fair wage to everyone involved, and they structured the ministry as a business that contributes to the economic health of all. The purpose of the business is to make an impact on the young people, but it is carried out in a way that has the promise of economic sustainability for the ministry and the young people.

Many of the organizations such as schools and hospitals that congregations started long ago moved away from a model of complete dependency on charitable giving. Congregations remain one of the few types of faith-based organizations with their finances based nearly exclusively on contributions. We all know that having more complex economic models can be difficult -- just ask any congregation that operates a child care center. Yet if we can keep the mission and impact on the community at the center of our planning, we might be able to leverage our assets.

The current circumstances mean that most of us are having to operate under very tight financial constraints. But we will not get to the next season of ministry by focusing exclusively on the expenses. We have an opportunity to focus on what impact we are called to make. With that clearly in mind, we must learn how to see all the ways that impact can create value.