Fixing And Preventing Financial Shortfalls


“How would you deal with a $150,000 shortfall after the annual stewardship campaign is finished?” the church business administrator asked.

“In three ways,” the stewardship consultant replied, “(a) Figure out what went wrong. (b) Take immediate action to remedy it. (c) Make plans to prevent it from happening next year.”

Administrator: Okay, but my primary concern is figuring out how to fix it!

Consultant: Fill me in on some details. Exactly what do you mean by “$150,000 shortfall?” Which was it: Did a bunch of your church members (a) stop giving or (b) did they reduce the amounts they wrote on their pledge cards?

Administrator: Neither one. Our congregation has 3,000 members, including the inactive and out-of-town members. About 60 percent of those 3,000 members usually complete pledge cards. About the same number of people turned in cards this year as the year before. However, we did not get the additional $150,000 we needed to balance our 2 million dollar budget. In other words, when we total the three standard figures that predict any church’s income-the amounts from (a) the pledge cards, (b) the people who give regularly but never fill out cards, and (c) an approximation of the unidentified giving in “loose offerings” we get each year (based on a three-year average), we expect to receive $150,000 less than we need to pay the bills.

Consultant: So you don’t mean that your total anticipated giving went down. You mean it stayed the same while next year’s budget increased $150,000?

Administrator: Exactly! To pay next year’s increased electric bill for our new family life center, to give the staff cost-of-living raises, and to keep pace with increases in our denominational “apportionments” for benevolence and mission causes, we need $150,000 more that we expect to receive. During previous years, shortfalls seldom occurred. Increased giving usually kept pace with increased expenses.

Consultant: I’m puzzled about why the giving did not increase this year. Did you have any unusual changes during the last 12 months, such as a major conflict, a sizeable group of members leaving the church, the death of a half-dozen major donors, or the arrival of a new pastor?

Administrator: Average worship attendance is down 8 percent, but not as a result of church conflict. We got a new senior pastor at midyear; the previous one retired after 20 years with us. People like the new senior pastor. He has good people skills.

Consultant: Your 8 percent drop in average worship attendance reflects a pattern observed in many congregations following the departure of a much-loved, long-term senior pastor, regardless of how skilled the next one is. The attendance drop is probably temporary. The good news: You did not get a drop in financial giving. What you got was a disappointing failure to receive the $150,000 increase you needed to balance the new budget, right?

Administrator: Precisely! So what do we do about it?

Consultant: Before I answer that, tell me how you conducted this year’s annual stewardship campaign.

Administrator: The senior pastor mailed two letters. The second contained the pledge card and a return envelope. Those who pledged last year got a card showing the amount they pledged. The letter asked people to turn in their cards on Celebration Sunday. About 25 percent of the cards came in prior to Celebration Sunday. About 30 percent came in on Celebration Sunday. We got the remaining 45 percent of cards by year-end.

Consultant: Avoid three mistakes next year. First, the letters should come from a well-known lay leader such as the governing board chairperson-not from the as-yet-unknown new senior pastor. (For many people, giving the same amount as last year was a positive affirmation of the new pastor, not a negative vote.)

Second, don’t send members their last year’s pledge amount. That causes many donors to give the same as last year. It fixes their minds on that specific figure, not on the spiritual question, “What percentage of my income is God calling me to give to the Lord’s work through my church?”

Third, do not mail the pledge cards in advance. That (a) reduces the total number of cards returned and (b) holds down the dollar amounts people write on their cards. Tell people they will receive the cards on Celebration Sunday. (When people ponder what amount they plan to write on a card next Sunday, they give the matter more serious thought; thus, more of them increase the amount.) The Monday after Celebration Sunday, mail a follow-up letter and a pledge card with a stamped, return envelope to every member who did not turn in a card on Celebration Sunday. Ask them to “please return the card this week, so we can complete our budget preparation process.”

Administrator: We can make those changes. Now tell me how to fix the $150,000 shortfall.

Consultant: Select from among these three possibilities. Fix-it Option #1: Do not publicize the shortfall. Select an appropriate number of your most generous givers. Contact them with home visits by a select team of laypersons from within that generous-giver group. Warnings: Do NOT ask each team members to contact more than five households. Do NOT contact the households by telephone, by mail, or by e-mail. Your new senior pastor should NOT make any of the contacts.In those home visits, instruct team members to explain the shortfall and say, “You are one of our most faithful, dedicated members. We are asking you to help us through this transition period in our church’s history by increasing your giving $… during the coming year.” (Set your total goal slightly higher than $150,000, since a few households may not respond as expected.)

Fix-It Option #2: Lay out, in detail, to the entire congregation, the facts behind the need for a $150,000 increase in (a) a Sunday morning presentation and (b) a letter to the entire membership, both local and non-locals. Ask people to “consider making the sacrifice of giving 10 percent more than they had planned so we can meet this need.” Ask people to indicate their decision with a note to the financial secretary or a note in the next offering envelope they submit.

Fix-It Option #3: During the Lenten months prior to Easter, lay out the shortfall facts in detail. Promote as a Lenten spiritual growth experience a “Faith-Tithe Month” during which you ask people to give 10 percent of their incomes and see how God blesses them through that generosity. (Since research indicates that only 16 percent of the people in your denomination tithe, this invitation connects with a sizable number of people.)

Administrator: Which of those three options do you recommend?

Consultant: In view of your transition circumstances, Option #1 is probably best. That way, you do not fire a downer message across the bow of your congregation’s morale. Option #1 reduces the danger of unintentionally giving people the erroneous impression that “we are in deep trouble because of the new senior pastor.” Then, too, in case Option #1 does not produce as expected, you can use Option #3 as a back-up procedure.

Administrator: That will work. Now, what about next year?

Consultant: Use a more effective procedure for your annual stewardship campaign. Research in congregations across the United States indicates the following connection between stewardship methods and financial giving habits:

– People who contribute without writing their intentions on a card that they turn in during an annual stewardship campaign, give half as much as people who write it on a card-an average of 1.5 percent of their income.

– People who annually write down and turn in a dollar amount based on a budget goal their church has established give an average of 2.9 percent of their income.

– People who calculate the percentage of their income they feel God is calling them to contribute, write the dollar amount on a card, sign their name, and turn it in during an annual financial campaign, give an average of 4.6 percent of their income.

One example of an effective annual stewardship program is New Consecration Sunday (Nashville: Abingdon Press; call Cokesbury, 800/672-1789). Perdue Research Group interviewed people in 150 congregations that have used Consecration Sunday. In 31 of those 150 churches, financial giving increased 25 percent or more the first year they used it. Another 37 of the 150 churches reported a 20 percent increase. Another 36 of the 150 churches experienced a 15 percent increase and another 30 churches reported a 10 percent increase. Only 16 of the 150 churches reported a 5 percent increase in giving. Of the 150 churches, 131 had used Consecration Sunday three or four years. In one congregation, financial giving increased 25 percent the first year, 18 percent the second year, and 30 percent the third year.

The Bottom Line

The least effective annual stewardship programs ask, “What does my church need to balance its budget?” The most effective annual stewardship programs encourage members to ask, “What percentage of my income is God calling me to give to the Lord’s work through my congregation?”

What question does your congregation ask each year?