Hey Friend -

This is part 4 of the series on the Vitality Matrix. This email is about how church finances work inside of healthy church systems. If you missed one of the last emails, you can get the archives here.

Is my church healthy (Understanding the Vitality Matrix)? | https://bit.ly/40hTSZh​

How healthy are the relationships in your church? | https://bit.ly/4atjA0g​

How good are your metrics (and do they really matter)? | https://bit.ly/4hpycAk​

So finances.

First, let me say something a bit crazy.

This isn’t about money (necessarily).

It’s about realizing how your financial information is the most objective data set you have in your church. If you are struggling with stability, you might be most anxious about finances. Don’t worry, at the bottom of the email I am going to share with you some of my regular ways we can start to grapple with this.

But first, let’s look at how the vitality matrix digs into financial health.

Unstable Churches

These churches face financial difficulties and cannot cover their current operating expenses. Churches will experience “red” months. But if you are often in the red, relying on reserves to pay the bills, or you have to send out requests for extra money for normal ministry expenses…you are here. If your church has significant deferred maintenance, let’s say more than 20% of your annual operating costs, you are probably here as well.

Stable Churches

Stable churches have the money necessary to continue ministry at the current level. They might find a bit of extra for new things or emergencies, but their income is only slightly above what is needed. You might say this is where you need to be, but there isn’t room for expansion of ministry or emergencies that come up. Many established congregations get more money in donations each year. But, the cost of ministry, especially building maintenance, keeps rising.

Vital Churches

Churches in the vital category can identify places of strategic financial growth for future ministry potential. Things are changing and they realize certain ministries will need extra funds to continue to reach new people. These decisions aren’t difficult to make. Yes is a simple word to say, but the affirmations are often rooted in deep strategy.

Sustainable Churches

These churches have steadily increased generosity to enable future generosity. They are able to build and adapt the current budget without sacrificing necessary items. Remember, this category is about replication. It remains highly strategic, but an increase is anticipated. This doesn’t necessarily happen with the same people giving more, but these by understanding scaled giving. They are growing at all ages and understand generosity is part of discipleship. They know how to work with people who are new to giving, as well as understand the pathway of financial generosity as part of discipleship.

So let’s get into the weeds a bit.

Say your ministry is in the unstable or stable category. When I work with churches in these categories there are a few actions I rarely see present. Often it is hopes and dreams.

Just like our personal finances, we always hope to find something that doesn’t cost much time or extra energy and can provide more money to do what we want.

We all know the lottery isn’t a thing we should plan for.

And in church ministry, some secret windfall is the hope many cling to.

Or the church looks at additional ideas such as alternate revenue streams or renting out facilities.

I feel those are band-aids to cover up the real problem we don’t want to face.

We need to learn about strategic generosity systems and build them into our churches.

I've rarely, if ever, worked with a church that is both struggling financially and has a real strategy for giving and budgeting. Let’s talk about a basic idea of what to build.

What would I pay attention to?

Go start a spreadsheet and start keeping this information each month.

• Number of giving units
• Number of individual gifts
• Monthly average gift (# of giving units divided by monthly giving income).
• What percentage of your monthly gifts are:
  • pledged
  • recurring
  • regular
  • random

Tracking this info for a few months will help. It will show you how money is coming in through donations.

What would I do?

These are the practices I had when church planting and always riding the line. We managed to stay ahead, and it was because of our giving strategy and systems. Over the last two years, I’ve used these same systems in dozens of churches to find financial stability and vitality.

• Send a monthly email to all donors. I do it on the first Monday of a month. It isn’t complicated. Follow this script.

Sending this email monthly might sound complicated, but using a modern church database linked to an email service like MailChimp or ConstantContact can do it really fast.

• It needs to start the day after they give for the first time.
  Again, using a modern database and email service allows you to automate a thank-you email. Take advantage of this email. A quick note from the pastor early on in the sequence is also a must. I would also have an email in the sequence letting them know how powerful an automated, recurring gift is for the ministry. I usually have this scheduled to send a week after the first donation. In the email, I also would share how they can log in to our database to check in on their past and any future gifts.

Remember, generosity is part of discipleship!

• Take a month to do a quick campaign to share the benefits for the giver as well as the church.
  I used to use the phrase “we automate what’s important” when I would do these campaigns once a year. Some churches are full of generous people. But, when they don't attend, they don't give. Many don't "catch up" when they are in town. I’ve seen churches increase generosity by 30% through a focused campaign on automated digital giving.

When churches are in a financial crisis, they can struggle to see a way out. Applying a more strategic approach to generosity is the first step.

The next email is all about how the vitality matrix helps a church understand its external ministry. See you then!

Chad

PS. If you want to see the entire vitality matrix you can download it here.
​Individual Areas of Congregational Vitality.pdf​