As Americans transition to a non-religious population, churches have been closing rapidly across the US. In 2019, about 4,500 Protestant churches closed, with those still standing typically having only 85% of the pre-pandemic attendance numbers. This number has worsened since COVID-19 struck in 2020, with research by the Survey Center on American Life and the University of Chicago finding that Americans attending church at least once a year dropped from 75% to 67%.

This downturn in attendance is mainly due to the poor economy, which has discouraged many people from attending and giving to faith institutions. The loss of their members has made it all the more difficult for churches to keep themselves afloat, leading to their eventual closure and sale.

As we highlighted in a previous post, lead pastors are ultimately responsible for everything the church is meant to do— including finances. Fundraising is only one part of the financial picture, and it’s essential to ensure significant giving continues to make a big difference in people’s lives. Given their role in overseeing and maintaining the church, here we present some ways churches can prevent financial crises:

Prepare an emergency fund

No one knows when these major economic crises will strike, which is why religious groups need to set aside money for the future. With any organization, especially nonprofits, having at least three months of operating expenses is a must-have to serve as a reserve. Not only does this enable nonprofits to overcome volatility, but it can serve as a savings strategy for your church to prepare and prevent financial crises.

Work with a finance professional

In an earlier paragraph, we mentioned how pastors lead the church, including overseeing its finances. However, if the church is suffering from poor attendance, there may be a need to reevaluate recruitment strategies. For the best advice on financial management, it’s recommended that churches consider working with a financial analyst. These specialists can analyze past and present financial data, provide key metrics, and provide recommendations for improvement. Furthermore, they can also oversee financial functions like budgeting and taxes and review any non-legal pertinent information. By having a finance expert handle necessary monetary needs, there is more time for pastors and other church officers to focus on finding ways to bring in vital funds.

Invest in accounting software

In line with hiring a finance professional, investing in the right tools and strategies to manage church finances is critical. One of the biggest challenges churches encounter is the lack of visibility into key metrics and the need to handle multiple projects, such as social service and missions. This lack of disclosure is why there are numerous reports on alleged misuse of church finances, with bigger churches losing millions of dollars and abusing their nonprofit and tax-exempt status. To maximize transparency, religious institutions must establish a solid financial system. Churches can use accounting software to oversee money better, helping them increase accountability. Alongside finance professionals, these tools help create efficient workflows and easier cash, revenue, and expense monitoring, allowing churches to understand their financial health better and make wiser decisions.

Lean on your community

While the lead pastor is the main person leading the church, it doesn’t mean they have to face the burden of handling finances alone. Although many religious groups are reluctant to discuss their financial worries, being honest with your congregation is one of the first steps to resolving any issues. Churches can better share their financial status and present relevant reports with the assistance of finance professionals and tools, building trust and encouraging members to support church activities as they have a clearer picture of where their donations are going.

While the world economy has generally improved, some churches may still struggle financially. To prevent these crises, it’s essential that each house of worship prepare an emergency fund, consult an expert, and remain transparent on expenditures with their members. Alongside propagation, churches can weather financial challenges and last better.

Article written by Riley Jarman

Riley Jarman is a Christian freelance writer. She is passionate about topics that aim to help her fellow Christians understand their faith in the modern age. In her free time, she loves horseback riding and settling down to read a good book.