5 Indicators that your Church is Financially Overextended

Tag Archive - budget

5 Indicators that your Church is Financially Overextended

Sunday, November 29, 2015

Earlier this fall in a post entitled “Breaking Through your Capacity Lid,” I wrote that financial shortfalls at churches can limit opportunities. I suggested that there are two sides to finances in a church setting. One is building a culture of generosity in your church and then the other is managing that generosity so you position yourself organizationally to say yes to Jesus when He provides clear vision and opportunity

Immature organizations over extend themselves financially and self impose artificial lids as a result.

In a time of year where most churches are finalizing budgets I thought it might be helpful to share some indicators that I’ve observed in churches that are financially overextended.

#1 Your Staff Salaries are not Competitive

If you’re not able to be competitive with your salaries you’re not going to able to attract and keep the talent you’re hoping to have on your team. This is an indicator that you’re financially overreaching somewhere. Not sure how much you should be paying your staff? This post will help.

#2 You’re spending more that 50% of your income of Staff Salaries

As strange as it may seem, if more than 50% of your income is being spent on Staff salaries then you’re staffing costs are beginning to constrict other ministry areas of the church.

#3 Low Cash Reserves

In my work with churches across the country I’ve discovered that if you have less than 8 weeks of undesignated cash reserves available at any given time you probably have too little financial margin to deal with unforeseen obstacles and set backs.

#4 High Debt Levels

Again, in my work with churches through the Unstuck Group I’ve discovered that if your church is carrying more than 2x your annual budget in debt than your debt load is beginning to constrict ministry opportunities.

#5 You Can’t Say Yes to the Opportunity Jesus is Giving You

If you can’t say yes to the vision Jesus has given you then your church is financially overextended. The bottom line is fairly simple. If Jesus has given you a clear vision to lead the church towards then part of your responsibility as a steward of that vision is to build (or enlist others to help you build) a financial strategy that will get you to that vision.

Posted in Leadership

6 Keys to Successful Small Groups

Tuesday, November 24, 2015

The other day the consulting team at the Unstuck Group was having a conversation about how to help churches get unstuck when it comes to the disciple-making ministry at their church. In particular we were discussing Small Groups. In the conversation Chris Surratt who runs SmallGroup.com and serves as a Ministry Consultant with the Unstuck Group mentioned 6 great questions that churches should be talking about if they want to have a successful small group ministry.

#1 Is the Sr. Pastor a Champion for Groups?

The churches that I’ve observed that have best small group ministries have a Sr. Pastor that isn’t just a public fan of groups but they are personally in a group. They lead with moral authority by not just saying do as I say but they personally model biblical community in groups. Having a hard time convincing your Sr. Pastor to join a group? Then follow this link to a post that will help.

#2 What’s the Competition?

Churches that have a ministry menu mentality usually have the most difficult time building a successful groups ministry. The more ministry opportunities that you offer such as midweek classes, prayer services, and so on the more choices people have. The more choices they have the less likely they’re going to choose being in a group. By offering a ministry menu churches are unknowingly undermining their group ministry.

#3 Is there a Key Leader?

Who wakes up everyday thinking about Groups at your church? It doesn’t have to be a full-time staff member; it could be a high level volunteer leader. But either way one thing that all churches that find success in their groups ministries have in common is a key point person who is responsible for groups.

#4 What’s the Win?

At the end of the day what are the expectations for groups at your church? What are you hoping happens through groups? What’s the point of groups at your church? Put a clear target on the wall and then build a plan to move towards it.

#5 Is it in the Budget?

Just like you can tell what’s important to a person by looking at their “check book” you can tell what’s important to a church by what they resource and budget for. Churches that find success in their groups ministry budget for success.

#6 Is it Scalable?

Is it easy for new people to get into a group? Do you have enough leaders to accommodate new groups that are starting? Do you have experienced group leaders who can offer coaching to leaders who are just starting out? If the answer to questions like these are no then you’ve got a system issue somewhere and you’re going to have a difficult time scaling as the church grows.

By the way, follow this link if you’re interested in picking up Chris’s new book Small Groups for the Rest of Us.

Posted in Leadership, Spiritual Formation

Breaking Through Your Capacity Lid

Tuesday, October 27, 2015

If you lead long enough eventually every leader and every organization will hit a leadership lid. You are going to outgrow your leadership skills and your organizational structures at some point. But what do you do when the lid at your church is a capacity lid? Capacity lids show up all over the place.

Facilities: If you build it they won’t always come.

Too many churches acquiesce to the pressure to build too soon and as a result they don’t maximize their current space. Instead of building try running multiple weekend services, try multiple venues on the same campus, park off campus, or move to a multisite strategy.

Volunteers: Volunteers are more important than the ministries.

Most churches run short on volunteers because they use volunteers to do the ministry instead of realizing that the volunteers are the ministry. Volunteering is discipleship. Take care of, invest in, and lead your volunteers and they’ll take care of the ministry.

Finances: Financial shortfalls can limit opportunities.

The two sides to finances in a church setting are building a culture of generosity in your church and then managing those finances so you position yourself to say yes to Jesus when He provides clear vision and opportunity. Immature organizations over extend themselves financially and self impose artificial lids as a result.

Staffing: The team outperforms the individual every time.

Scouting, attracting, developing and keeping talented team members are essentials to a growing church. But before you think paid staff think volunteer leaders. Paying people to do ministry should be the last resort.

Leadership: Leadership is a spiritual gift, but you can develop your leadership skills.

Leading a church of 100, 500, 1,000 and 10,000 are not the same thing. The higher you go you move from the science side of leadership to the art side of managing the momentum and emotion of the room. Get outside your tribe and start listening to and learning from successful people and organizations in other industries.

Character: Your talent can take you further than you character can sustain.

Character is the lowest leadership lid. No level of competency will ever make up for a fatal flaw in character because ministry and leadership run on trust. Character flaws erode trust every time.

Posted in Leadership

Why People don’t Financially Invest in your Church

Sunday, March 15, 2015

I recently read Not Your Parents’ Offering Plate by Clif Christopher. It’s a quick read that you can get through in one sitting, but it’s full of principles that you’ll come back to over and over again. There are a lot of reasons why people don’t give to churches as much as they used to. This book does a great job of helping to identify those reasons but it also gives pastors and church leaders steps they can take to move things in the right direction. If you’re a church leader and you haven’t read this book…you should. Here are some of the key ideas that stood out to me from my reading:

1. There is more Competition than ever for Charitable Dollars in America

The number of non-profit organizations is increasing every year and as a result competition for charitable dollars is increasing. It’s not that people are less charitable; it’s just that they’re directing it to other places than the church. “Since 2001, giving to religion has shown a rate of growth of 3.6%, while disposable income has increased more than 8%. People have the money and they continue to give. Religion is just no longer their charity of choice.” Church leaders should be asking themselves, “Why?”

2. Nonprofits know Why people Give while Churches just think people should give out of Obedience to the Scriptures

Multiple research studies have shown that there are three key reasons that people give: (1) A belief in the mission of the institution, (2) A high regard for staff leadership, and (3) Fiscal responsibility of the institution.

3. Nonprofits communicate from a position of Strength while Churches communicate from a position of Weakness

Nonprofits rarely, if ever, communicate about finances. What they communicate is stories of life change, real results from the investments that others have made in the nonprofit. Then they ask for more money. Churches don’t talk about results (probably because truth be told not many are actually producing many life changing results) instead they talk about their needs and how they are behind budget or need more volunteers. People with the ability to significantly invest in the Gospel work at your church don’t want to throw good money after bad. They are looking for a return on their investment, and rightly so. The Scriptures teach us that Jesus is too.

4. The Pastor should know who gives what

I know this may sound off to some but listen…(1) It will help them raise more money to fund the work of the Gospel [different people have different gifts and roles to play in the body of Christ] (2) It helps determine if what the church is doing is actually working. [people give to and support what changes their lives] (3) It allows the pastor to say thank you to donors [the church is notorious for not saying thank you]. Most people whose hair stands up at this idea simply don’t want their pastor to know what they give because they’re not being generous and following the Bible’s teachings on finances.

5. Help people Give

Many people want to obey Jesus and be generous with what they have to advance the Kingdom of God through the local church. Unfortunately many of those same people have not used the money that God has given them very well up to this point and they’re not in a position to be generous. Does your church have a plan or resource to help people learn how to manage what God has given them in a God honoring way?

6. The best way to raise money for your church is to DO YOUR JOB!

Peter Drucker wrote, “A business has discharged its task when the customer buys the product, pays for it, and is satisfied with it. Government has discharged its function when its policies are effective. The nonprofit institution neither supplies goods, services, or controls. Its product is neither a pair of shoes nor an effective regulation. Its product is a changed human being. The nonprofit institutions are human change agents. Their ‘product’ is a cured patient, a child that learns, a young man or woman grown into a self-respecting adult; a changed human life altogether.” In other words when your church consistently shows how lives are being changed, when marriages are healed, addicts find freedom, people fall on their knees and follow Jesus – people will support your church.

Posted in Leadership, Spiritual Formation

How Many People should your Church have on Staff?

Sunday, March 8, 2015

Before you buy into the idea that you need another staff person at your church, think again. That just may be the worst decision you make at your church this year.

It’s not uncommon in churches that I work with to hear them say, “We need to add more staff.” After all if there are problems or areas where the church is stuck then throwing staff at that problem will surely fix it…right? Well, not always. In fact the opposite may be true. In fact the most effective churches that I see have a tendency to hire fewer staff not more staff. They hire more competent team members who have the ability to turn attenders into volunteers, volunteers into leaders, and build teams. Instead of paying people to do ministry they pay people to lead others to do ministry.

At the Unstuck Group we encourage churches to staff to a ratio of 100:1. As you can see in the chart above the average ratio of attendance to staff in most churches is 86:1. In other words for every 86 people in attendance at the church (including adults and kids), there’s typically one full-time staff person.

This number includes all paid staff at the church. That means administrative staff, support staff, ministry staff and pastors. This number also includes both full-time and part-time staff. We calculate the full-time equivalent (FTE) number by adding the total average number of hours part-time staff work and then dividing by 40. That number is added to the number of full-time staff to get the FTEs. For example, if there are 5 full-time employees and 10 part-time employees working a combined average of 200 hours per week, that makes for a total of 10 FTE’s.

Over staffing is a big deal in churches because it’s usually an indicator that:

1. The church has become Insider Focused

Typically an overstaffed church is paying people to do ministry and run programs to keep long-time people in the church happy.

2. The church has a Poor Culture of Volunteerism

There is a direct connection between staffing and volunteerism at churches. Generally the more a church spends on staffing the less likely attenders are to serve.

3. The church has Stopped Growing

There is also a direct connection between staffing and church growth. What we’ve discovered in our research at the Unstuck Group is that the more a church spends on staff the more the rate of attendance growth slows.

In other words the more staff your church has the more likely your church is to become insider focused, have a low level of buy-in and volunteerism by attenders, and to be plateaued or in decline.

Interested in learning more? Download the ebook “Vital Signs: Meaningful Metrics That Keep a Pulse on Your Church’s Health” or consider engaging the Unstuck Group to do a Ministry Health Assessment with your church.

Posted in Leadership, Staffing, Volunteers

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