The Great Recession has created seismic shifts in religious life in America. During the Exceedingly Long Recovery, congregations need to pay careful attention to equations that describe our “new normal” or help pave the way forward.

Low interest rates = reduced contributions from senior adults

Most senior adults live on fixed incomes, with declining disposable incomes. As seniors age, their medical costs rise. Low interest rates reduce the income seniors derive from CDs and other financial instruments. In addition, low interest rates tend to go hand in hand with very low inflation, keeping automatic cost-of-living increases for Social Security recipients low.

The cost-of-living increase for Social Security has been zero the last two years (unprecedented). With medical expenses up and all sources of income either level or down, seniors will have less money to donate to churches – for years to come.

High unemployment = increased need for benevolent ministries

The unemployment rate is above 9.5 percent. Typically economists think it takes GNP (gross national product) growth of 5 percent or more to diminish unemployment ranks. GNP rose 1.7 percent last year. It could be years before GNP grows by more than 5 percent.

This long economic recovery means the unemployment rate is going to continue at unprecedented levels for years to come; thus, the need for benevolent ministries will grow over the next three to five years.

Unfortunately, because of limited financial resources, many churches will be unable to respond to the needs of their own communities. This may require local congregations to re-evaluate “mission funding” beyond the local church’s ministry.

Weak housing market = entrenched ministers unwilling to move

Most ministers are hesitant to leave their present ministry – for financial reasons. A church may offer a larger salary and a larger audience, but moving could destroy a minister’s finances. With housing costs down, the minister’s home isn’t worth what it once was and it could take a long time to sell the minister’s house. A minister’s “balance sheet” could take a terrible beating in this economy with a move; a $10,000 salary increase will be more than offset with an extra house payment for 18 months and substantial losses on selling a home.

I tell churches these days that if you want a new pastor, you may have to “pry” her from where she now lives. It can be done, but churches will have to become creative.

Churches looking for pastors need to consider three adjustments.

1. The church should consider paying all closing costs associated with a minister selling or buying a home; this is the normal practice when businesses ask an employee to relocate. While this may seem unusual for churches, we live in very unusual times.

2. Churches should consider paying for the new minister to live in an apartment for up to a year to help ease costs of the transition.

3. Congregations should first look for ministers serving in their own general geographical area. Talented ministers are just a few miles down the road; churches in other states are pretty impressed with them.

Successful congregation = reduced costs

The historic nature of the Great Recession requires a major shift in the way churches trim expenses. In other recessions, churches have just cut back on everything until the economy bounced back. There will be no bounce this time, and churches must look at more fundamental alterations.

The two largest costs for churches are personnel and costs associated with buildings. Both need to be trimmed in this troubled economy. In the case of personnel, churches need to outsource as much work as they can and reduce their number of employees.

Not every ministry position requires a seminary graduate. Historically, church personnel expenses have been 45 percent to 55 percent of the church’s operating budget. Local churches need to move their personnel expenses to 40 percent of the operating budget as soon as feasible.

With regard to facilities, churches may want to consider leasing unused space to organizations with a similar mission. “Sharing facilities” can significantly reduce costs. Letting a building stand unused all week is a terrible “financial loss” for a church.

Successful congregation = focused spending

Where a church spends money is critical in hard economic times. As noted above, historically churches in this country have “invested” in personnel and buildings as an effective way of growing congregations. The assumption has been that personnel and buildings grow ministries and services to people.

In hard economic times, churches tend to reduce program costs, which leave personnel without money to spend on programs or without funds to keep the lights on in buildings. Because of the protracted nature of these hard economic times, churches will be better served to reduce costs associated with personnel and buildings and substantially increase program costs.

“Free pizza,” debt counseling provided by members who are accountants, and retraining and debt management courses – not people who are good at public prayer – will draw new members.

The world has changed. The Great Recession and the Exceedingly Long Recovery have dramatically altered ministry funding for the next decade. Churches need to “do the math” and adjust the way they do ministry.

Ron Crawford is president of the Baptist Theological Seminary at Richmond. This column first appeared on his blog.

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