Through the late spring and summer, our team at Church Answers observed a consistent theme. Though some churches experienced a decline in giving, many reported steady giving patterns. A few reported a slight increase in giving.
It will take time to know exactly why giving did not drop off more as the pandemic took hold, but some initial reasons are beginning to emerge.
- The quick action by Congress, the Federal Reserve, and the SBA got needed cash to Americans. This excess liquidity enabled people to continue giving to charitable causes, including churches.
- At first, many anticipated the pandemic to last a few weeks, not months. People kept giving thinking the storm would be shorter in duration.
- The shock factor of not gathering in person prompted members to rally behind their churches. People were willing to endure what they thought were short-term changes, and they kept giving with the hope of returning back to normal soon.
- Out of necessity, people shifted to digital methods of giving. Even church members who would never consider this pathway prior to the pandemic were willing to make the leap.
Things changed in the fall. A second round of stimulus checks did not materialize. At some point in the summer, people realized this was a longer-term problem. And the lack of gathering in person caused churches to lose momentum. The one trend that continues to help churches is digital giving, but it’s not enough.
Currently, we estimate over half of churches are experiencing giving challenges. Far too few churches are preparing for what could be a rocky 2021. While the latest reports about vaccine effectiveness are good signs, the reality is much of the economic damage is already done and will affect churches in the coming year.
- Only 3% of churches currently have worship attendance at or above pre-COVID levels.
- Four out of five churches have reopened. Larger churches are reporting worship attendance at about 35% pre-COVID levels. Smaller churches are about 50% pre-COVID levels.
- At Church Answers, we are projecting 20% of people that were attending will never return. This figure will be bigger for larger churches.
- These lower attendance trends will affect giving in 2021. In short, you cannot bank on things returning to normal at some point next year. Almost every church will be smaller in 2021.
How can you prepare for this shift?
One simple adjustment is to lower your budget by the same percentage of people you anticipate will not return. For example, one in five people nationally are not expected to return to church—a 20% decline. If you estimate a similar figure for your church, then lower the budget by 20% in 2021.
Lowering expenses may be necessary. But you need to pour just as much energy into increasing revenue. Emphasize giving throughout the year. Celebrate new givers. Hand write notes to people who give sacrificially. Send out regular updates to the church on how their giving is positively impacting the mission.
Even after lowering the budget, your church may need to dip into reserve funds in 2021. Work with whatever group that helps with the finances to determine an amount of reserve funds to be used if necessary. For example, let’s assume you have a 2021 budget of $400,000 and reserve funds of $100,000. You could plan to use $50,000 of reserve funds in the case of a budget shortfall before enacting spending freezes.
The financial impact of COVID in churches will last into 2021. Now is the time to start preparing.