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Thinking Strategically in a Recession

Making better decisions in lean times.

The Church Law & Tax Group asked its Editorial Advisors and church leaders how pastors, business administrators, and executive pastors can lead well amid the changing realities in 2010—and here's what they said about strategic areas where church leaders should concentrate.

Use scarcity to find clarity

Decreases in weekly collections at churches across the country received widespread media attention throughout 2009. Though some churches' collections managed to remain flat, or even grow, the majority of congregations felt a financial pinch. LifeWay Research reported in January that more than half of the 1,002 pastors it surveyed said the poor economy hurt their church. In our poll in early January, nearly half of the respondents said their churches entered 2010 financially weaker because of 2009.

With unemployment still above 10 percent, 2010 isn't likely to bring widespread relief, either. That means church leaders will need to "make every penny shine and every dollar crisp. Every expense has got to be justified," says John Throop, the priest-in-charge for Trinity Episcopal Church, a 300-member congregation in Portsmouth, Virginia.

For Throop, the clarity comes when a church uses a "We will … so that …" approach for its mission statement. Filling in the blanks forces leaders to answer the question of where God is taking them.

"Scarcity does lead to clarity," says Brian Kluth, a pastor who was commissioned by his Colorado Springs church to help churches around the country with giving and generosity.

The strategy for church leaders in 2010 is to guide their churches in facing hard choices, with potential decisions to cut popular staff members or ministries that members love. Painful as these changes may be, they're critical to the long-term health of the church.

"When you're discerning and selective, hard conversations come," says Joy Skjegstad, a Minneapolis-based consultant to churches. But the payoff should come in the long term. "Churches can't be everything to everybody, and they need to realize their unique gifts and abilities," she says.

Don't trim risk-management efforts

When cuts are necessary, many churches view risk-management efforts as expendable, Willow Creek's Brian McAuliffe says. It's often difficult to convince a pastor or board about the importance of a background screening or security camera system when a discipleship effort is on the line. Some churches, for instance, are scaling back on background screenings for staff and volunteers, either going with a cheap service or cutting them altogether.

"They'll cut volunteer screenings because it was $10,000 last year, or they'll go with a different provider for the background checks for a lower price, but it doesn't cover all of the things it should cover," Sommerville says. "Make sure you are maintaining the protection, even in these cost-cutting times. Yes, you could cut background checks, but ultimately, you're going to see the costs of that decision. Once a child is harmed, you can't undo that."

Pay employees fairly and legally

Compensation levels likely won't change much in 2010. In a survey of nearly 5,000 churches for the 2010-2011 Compensation Handbook for Church Staff, data showed flat-to-slightly-declining pay levels for the majority of positions.

But if the funds aren't there to give raises, other factors can improve an employee's working situation. "Get employees involved," Sommerville says. "Employees are incredibly creative in coming up with things."

In recent months, he has seen churches address compensation problems with solutions ranging from shortened work weeks without pay cuts to upgrading the office's coffee supply from Folgers to Starbucks. One church faced the difficult task of cutting one employee from a high-performing staff. The leadership approached the staff, and 80 percent of them said that all should take a temporary pay cut so that everyone could remain employed.

However, churches' creativity must remain legal. Middlebrook says the Internal Revenue Service is paying closer attention to pay and benefits for church employees, including any attempts to provide that compensation without reporting it. "Any outstanding 'loans' to church personnel should be carefully reviewed as well as any large sums paid to both church employees and outside parties," he says.

Evaluate volunteer-led models

With the economic fallout of 2009 came job cuts at many churches. They began to ask, "What ministry efforts need to be accomplished by paid staff, and what can be accomplished by lay leaders or lay ministers involved?" says Phill Martin, the Deputy Chief Executive Officer of the National Association of Church Business Administration. One outcome of the recent economic strife may shift churches "back to a more equipping ministry. It's not a new concept in the church, but a shift back to where the staff is charged with equipping the members of the church," Martin says.

Estimates vary on how much churches spend on personnel costs, with our 2009 church budget priorities survey suggesting about 40 percent, and others, including NACBA, suggesting more.

At Willow Creek, personnel costs once hovered near 70 percent of the budget. The church set 50 percent as its goal, and downsizing and other efforts have brought it closer to that level, McAuliffe says. And for new hires, a higher priority is placed on their emotional and relational abilities to recruit and use volunteers. "There are certain things you have to do with staff, but there are others that can be staff-led but run by volunteers," he says. "Staff members have to continually think, 'How do I replicate myself one or two times over?'"

McAuliffe acknowledges that not every role can fall to a volunteer. But in times of economic crisis, use the opportunity to determine what roles developed into paid ones just to cover a previous challenge that emerged because of growth or another tangible need. Then evaluate how a paid staff member can incorporate training and leadership to a group of volunteers who can now carry out the work.

But don't automatically assume volunteers are the answer without strategically thinking about how to recruit, organize, and use them.

"I get nervous when people say we'll cut a position and have a volunteer do it without thinking about all the things that go into that—finding them, overseeing them," says Joy Skjegstad, a church consultant in Minneapolis. "I don't see volunteers as a totally cost-free option." Job descriptions for volunteers are highly recommended, she says, and in situations where volunteers are asked to fulfill a role previously occupied by a staff member, church leaders should break down tasks, which helps people visualize what needs to get done and how it fits into their schedules.

For instance, don't recruit one individual to serve as the church receptionist. Instead, ask a few people to split phone duties throughout the week, ask another to handle church bulletins and mailings, and another to coordinate events, she says. It may sound daunting to recruit multiple people, rather than one, but the odds of securing many people to help for small amounts of time each week actually may be greater than trying to recruit one person to help for many hours each week.

Matthew Branaugh is editor of content and business development for Church Law & Tax at Christianity Today. He earned his juris doctor (JD) with honors from the University of Denver Sturm College of Law.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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  • February 21, 2010

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