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Is Your Congregation Nearing a Financial Tipping Point?

Is Your Congregation Nearing a Financial Tipping Point?


Malcolm Gladwell’s book, The Tipping Point: How Little Things Can Make a Big Difference, could well have included a chapter on congregations unexpectedly reaching the point when they are no longer financially viable.
I know of one congregation that went from being in the black financially, paying all their bills and apportionments one year, to almost being insolvent the next. There was no major crisis that eroded their financial base, just a chain of “normal,” little events that could happen in any congregation. And suddenly, like a precariously leaning stack of quarters, everything tumbled over. 

The congregation’s size had been shrinking year by year as the average age of their members climbed steadily.  At the same time, the basic expenses of keeping the church doors open and having a full-time pastor were creeping up.  The congregation’s fewer members gave more and more.  On the surface, the bills were being paid and everything seemed secure.  But then within twelve months, over a dozen of the congregation’s members died and surviving spouses moved to live with family in other areas of the country.  While the church family mourned the loss of so many of their friends, they suddenly discovered that they had also lost most of their largest givers.  

Many congregations find themselves in financially precarious and unstable situations. How can you recognize if your congregation is precariously near the financial tipping point?  Here are 10 signs of financial unsustainability.   

1.     The average weekly worship attendance for a congregation with a full-time pastor drops below 120. 

2.     Staff and benefits exceed 50% of the total annual budget. (In a small church the level may go to 55 - 60%; in a larger church the level should stay below 45%.)

3.     Payments on indebtedness exceed 30% of the total annual budget.

4.     More than 15% or the annual budget is underwritten by facility use fees or fund raising activities by the congregation. 

5.     Memorial funds and savings are being used to underwrite the annual budget. 

6.     A high percentage of the annual budget is underwritten by 1-3 persons. 

7.     A high percentage of the annual budget is underwritten by persons in their 70’s or older. 

8.     Necessary building maintenance is being deferred year after year.

9.     Not paying apportionments in full is being used as a strategy for making ends meet several years running.

10.  Not ending the year in the black repeatedly, including the inability to pay property & casualty insurance, health insurance, the pastor’s pension or salary. 

In the next blog post, I’ll share some healthy practical strategies that I have seen congregational leaders use to address financial instability.   In closing this post, however, I want to make a missional observation: long before a congregation reaches a financial sustainability crisis, their life together has become increasingly focused on paying the bills, rather than making more and better disciples who are having a Kingdom impact in the world.  In short, when leaders are fretting about financial survival, they aren’t focusing on the mission for which the Christ created His church. 

I recently heard Dr. Tim McNeil say, “Squirrels can either gather nuts or they run from predators, but they can’t do both at the same time.”  He went on to explain that people and congregations, like squirrels, can either be purpose driven or in a defensive, survival mode, but not both together.    

So the real reason for spiritual leaders to look at whether their congregation is nearing a financial tipping point is not to insure survival economically as an organization, but to free people to focus on what really matters: making more and better disciples who have a Kingdom impact in the world.  As Jesus said, “No one can serve two masters.  Either you will hate the one and love the other, or you will be devoted to the one and despise the other.  You cannot serve both God and money. . . [So,] seek first his Kingdom and his righteousness, and all these things will be given to you as well.”   (Matt. 6: 24, 33)

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Dr. Jeff Stiggins

The Center for Congregational Excellence