Budget Cuts and Stages of Grief

Our church was not reaching its budget and had to make difficult changes to reduce expenses by 16 percent.  The finance committee realized a reduction of this magnitude would require cuts in staffing – something no one welcomed.  They asked the staff-parish relations committee to come up with a plan to reduce staff expenditures.  Then, members of the church council were brought into the loop.  Finally, the church itself was informed.

Grief spread as each of these groups became aware of the realities of the proposed budget.  The result was a staggered wave of grief that spread its way across our congregation.  As each group came to grips with the reality at hand, I observed them working through the classic stages of grief1.

Stage 1: Denial

Denial was the longest stage. Our finance chair started waving red flags more than a year ago, but others did not see a need to change. We stayed out of the red by freezing spending in the last quarter of the year and by cutting support to the denomination (called apportionments). We had all the symptoms of budget problems, but because our bottom line never went below zero, it was easy to deny the situation and keep from trying to find a solution.

Denial manifested itself in these kinds of statements:

  • “We just need to step out on faith that we will hit our budget this year.”
  • “We did not go under last year, so why would we have a problem this year?
  • “I’m sure we’ll find some way to get by. We always do.”

Stage 2: Anger

Our treasurer finally said that we needed to make changes or we would not be able to pay staff in six months. That got people’s attention.   At the same time, our judicatory starting billing churches directly for the pastor’s insurance and pension (rather than lumping those expenses into other denominational support payments) meaning that it was no longer possible to withhold payments to the denomination as a stopgap. These two factors got the point across. Our budget issues were real and needed to be dealt with quickly.

When people began to realize that the problems were serious, the reaction was anger.  Everyone wanted to assign blame:

  • “If the church would just step up and do something rather than just sit in the pews, we’d be ok.”
  • “The pastor could be doing more to get people in the door.”
  • “The conference has made it impossible to run a church these days.”
  • “It’s the government’s fault. The President isn’t doing enough for the economy.”

While all of these statements might have some truth, the blame game did not help. Deep down, I believe that everyone knew that it was really no one’s fault. There is a time for every season under Heaven.  This was a time for cutting back.

Stage 3: Bargaining

This was the busiest stage. Almost everyone came up with their own budget, each cutting everything but the ministry they were passionate about. Committees would take hours to make a decision, and then as this stage of grief hit, people would start trying to make deals. Some of the bargaining was good brainstorming. Some of it was simply motivated by grief.

  • “What if we cut staff salaries for six months and re-evaluate?”
  • “What if we do another pledge drive to give the church another opportunity to give?”
  • “Let’s have another meeting to think about what we decided at the last meeting.”

These were ways to try to bargain the problem away, but none of them offered a long lasting solution.

Stage 4: Depression

The next stage, depression, was expressed in comments like these:

  • “I have never been more physically or spiritually drained than I felt coming out of that meeting.”
  • “I want off the staff-parish commitee… I never want to experience this part of church again.”
  • “Church doesn’t feel fun anymore.”

Because depression is mostly silent and private, these depressive statements were surely just the tip of the iceberg. It was important to recognize these emotions – to allow people to sit with them for a while – and to honor their feelings.

Stage 5: Acceptance

After months of working through grief, the group came together and made difficult decisions. People began expressing opinions like these:

  • “I don’t like it, but this is where we are, and this is what we have to do.”
  • “We’ve got to do this, and we can make the best of it.”
  • “We’ve been through tough times before. We can make it through this one, too.”
  • “Let’s do what we have to do, and do it right so that we can prevent it from happening again.”
  • “I’ve decided to support the finance committee’s recommendation. They’ve done a good and difficult job.”

These statements were a joy to hear. There are still people in my church who are working through these steps, but with God’s help, we will make it through. Leading a church through budget cuts is never easy.  But it is helpful to remember that grief may linger through the night, but joy does come in the morning.

For all pastors that are leading your churches through budget cuts (and there are a great many of us), my thoughts and prayers are with you!

Update (December 2011): We are on track to meet our budget for the first time in several years. Instead of freezing ministry due to a budget shortfall, we have been able to free ministry because the budget dollars have actually been there. We lost a couple of families in this process, which sparked another round of grief. We are now, however, better poised for ministry in the future.

1The Stages of Grief model was originally proposed by Kübler-Ross, E. On Death and Dying.

I Found $10,000!

I found $10,000 today! Well, sort of.

I misunderstood a finance report to the extent that I thought we had spent $10,000 more than we actually spent. For our church, a $10k hole in the budget is cause for concern. When I started adding numbers together, though, the numbers weren’t coming out that bad, so I knew something had to be up with the report. The bottom line: The report wasn’t user friendly.

So, I learned an important lesson. It’s important to audit our reports (not just our bank statements) to make sure that they are reporting the numbers that you think they are reporting, and that the information is presented in a way that an average person can understand.

Most church management software packages allow you to design your own reports. The ability to write custom reports makes it possible to have nice, clear reports tailored to the needs of your church. Writing custom reports also makes it easy to insert human error. After this experience, I strongly suggest periodically auditing and cleaning up reports to make sure they are set up correctly, and that they are easy to understand.

I hope our finance committee will enjoy our crisp and clear budget report that they will have at our next meeting. And, we are $10k better than I thought we were!

PS. For any of my church members that might read this, I want to make one thing absolutely clear: The $10,000 that I found is just in my head. It doesn’t really exist. Please don’t spend it! Thank you.

Thoughts on Cutting Budgets

money-puzzleBudgets are tight. Not only does it cost more to buy milk, it costs more to drive to the store to get the milk (even with the recent drop in gas prices). Families have had to start making cuts to make ends meet, and church giving is one of the places where we can expect to see cuts. So, what should churches do? I posed this question on the blog of church consultant, Bill Easum, and he responded with very wise advice. I think it is important to consider that there are right and wrong ways to cut the budget.

Churches must be intentional about where we make cuts. Basically, we must try to protect the budget lines that are dedicated to growing the church. These line items are the ones that fund our Christian mission to reach new people. If you cut these areas that grow the church, the church will stagnate and then enter decline making your financial woes worse instead of better. It creates a downward spirial that gets exponentially worse with time.  So while it may seem easy to cut outreach events and marketing, it goes against our mission and does more harm than good.

For people in these difficult times, giving less to the church is a way to meet their other financial reponsibilities. We need to teach, as Bill Easum says, living within our means and percentage giving. I am a huge fan of Dave Ramsey. He teaches how to get out of debt, how to live within your means, and how to be intentional about giving to the church. I believe that most Christians would like to tithe, but just do not know how. It’s up to the church to teach them how.