Survey Shows That Churches & Associations Should Prepare For Potential COVID-19 Financial Storm

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Thom Rainer said recently that due to the coronavirus pandemic, “Many, if not most, of our churches are struggling and hurting. Some will not make it. The situation is bleak for many congregations.” Depending on how long this pandemic lasts, Dr. Rainer may be right that some churches may not survive, at least from a financial standpoint.

While it is too soon to tell what percentage of normal giving that churches will receive on a regular basis, most ministry leaders expect it to be significantly less than normal. Some churches will take in a higher percentage than others, but nearly all expect it to be less than what they have been accustomed to.

Therefore, over the past two weeks, nearly 80 Southern Baptist church and associational leaders from nine different states were surveyed regarding their level of preparedness for a potential COVID-19 financial storm. Unlike other studies I have published, the sample size of this study is relatively low (n=79). Therefore, this is not meant to be interpreted as a scientific study. Rather, these findings must be taken with a grain of salt. Still, I do believe these results shed some light on the current financial situation of many of our churches and associations.

Churches Have Some Time To Prepare

When church leaders were asked how long they estimate they can stay afloat if their monthly income was significantly reduced (by as much as 50%) during the pandemic, most churches indicated they have enough reserves to remain financially solvent for approximately 4-6 months.

While churches typically have 4-6 months of financial reserves, some have less and some have more. Here’s the breakdown:

• 3.2% of churches surveyed have less than one month of financial reserves
• 9.7% of churches surveyed have 1-3 months of financial reserves
• 48.3% of churches surveyed have 4-6 months of financial reserves
• 19.4% of churches surveyed have 7-12 months of financial reserves
• 19.4% of churches surveyed have more than 12 months of financial reserves

Associations Have Less Time To Prepare

Similarly, SBC associations tend to have 4-6 months of financial reserves as well. However, as the following breakdown shows, there is a higher percentage of associations that have 3 months of reserves or less, when compared to local churches:

• 5.3% of associations surveyed have less than one month of financial reserves
• 26.3% of associations surveyed have 1-3 months of financial reserves
• 42.1% of associations surveyed have 4-6 months of financial reserves
• 13.2% of associations surveyed have 7-12 months of financial reserves
• 13.2% of associations surveyed have more than 12 months of financial reserves

Again, while only 12.9% of churches have 3 months or less of financial reserves, 31.6% of associations will face significant financial challenges within 3 months. For smaller associations (with less than 25 churches), the percentage climbs to 50% who could potentially exhaust their funds within the next 3 months.

To put it in perspective, one-third of all SBC associations and half of our smaller associations could be out of money by mid-June unless this pandemic’s trajectory improves significantly within the next few weeks. Indeed, there is potential for a major financial storm for many.

Bright Spots for Churches

Still, the survey did show some bright spots as churches appear to be adapting quickly to the challenges of the day. While only half of the churches surveyed were livestreaming their services before the pandemic, that percentage has now climbed to 90.6%.

Similarly, while only 50% of churches offered online giving prior to the pandemic, 80.6% of churches currently or have plans to offer online giving in the near future.

Recommendations

These are challenging days. From a financial standpoint, the toughest days for many churches and associations may still be ahead. That’s why church and associational leaders need to take steps now to prepare for the potential financial storm. Here are four recommendations for churches and associations to consider:

1. Pray for provision. Scripture tells us that the LORD owns the cattle on a thousand hills. He can provide what we need, especially in difficult times. Let’s not forget to ask Him!
2. Apply for a loan through the CARES Act. This recommendation is made with the assumption that your church or association does not view the CARES Act as a violation of separation of church and state. Click here for a good article which addresses this issue. Essentially, these loans could help sustain your ministry for an additional two and a half months. Especially for our smaller associations, these funds could be vital to their survival. But those funds won’t last long, so you’ll need to act quickly.
3. Revise your budget now. This is a new day. Churches and associations need to strongly consider suspending your current annual budget and introducing a reduced budget, which can be re-evaluated either monthly or quarterly until the financial storm passes. For more information about crisis budgeting, click here.
4. Communicate the needs. Church leaders need to communicate their financial needs to their church members. Associational leaders need to communicate their financial needs to their churches. I realize this isn’t always pleasant, but it is necessary. Especially during times like these.

While this survey is not scientific, I do believe the results provide an accurate picture of the financial situation for many of our churches and associations. I pray these recommendations will help you and your ministry to weather the storm and to come out stronger on the other side!