During the Great Recession that began to affect the U.S. economy so severely in late 2008, churches with little or no cash reserves felt the most immediate, severe effects. In fact, many churches that had significant debt outstanding and that had little or no cash reserves found themselves in immediate financial peril. A significant number of churches were unable to pay their debt obligations and lost their church facilities in foreclosure or its equivalent. Failure to honor a debt obligation certainly presents scriptural challenges for any church leader.
Philosophy of cash reserves
Some churches do not maintain cash reserves. This is a respectable philosophy, and what follows isn't meant to denigrate such an approach. However, many churches believe it is appropriate to maintain reasonable, appropriate, and healthy cash reserves and financial position, and this article is designed to help them.
From a practical perspective, any number of unexpected developments can occur that could present cash flow challenges to a church. For example, if a well-respected leader left the church, or committed some discreditable act, then attendance and financial support of the church could significantly and immediately suffer. A sudden downturn in the economy like the one in 2008, brought on by the outbreak of war, a stock market collapse, or other unpredictable event, could cause similar impact.
Part of effective stewardship involves having a viable and stable ministry. If church leaders are frequently focused on addressing cash flow challenges or related concerns, they will focus less on their ministry objectives.