Inflation’s effect on houses of worship
It is a difficult time for houses of worship: You have experienced the one-two punch of, first, COVID-19 closures, and now inflation. Inflation affects both your finances and your members’ finances, as the price of groceries, gas, clothing and other necessities rapidly increases. While these prices are going up, cost-of-living increases aren’t matching them, which means a dollar is worth less today than it was a year ago.
So, how can you weather this latest crisis and come out on the other side with a still-strong ministry? Church Mutual is publishing a series of blog posts on how different types of organizations can best handle inflation. Here, we offer five tips for houses of worship.
- Don’t overpay for building materials. If you are in the midst of a construction or renovation project, your budget may be taking a hit as the price of certain materials soars. Rather than borrowing from one part of the project to pay for the increased prices in the other part, consider whether a pause for a few months makes sense to see if prices stabilize. In today’s market, there are vast changes from month to month, and if you can afford to wait, that might be a better option than scaling back your project scope.
- Consider “wants” versus “needs.” Now is the time to carefully contemplate what you truly need for your ministry. The best way to do that is to think about your mission. What kinds of projects do you absolutely need to continue to fulfill your mission in the community? What items on your to-do list can wait until the economy is more stable?
- Obtain a properly prepared financial statement. Your members want to know where their money is going — especially now, when the amounts they give purchase less than they did a year ago. A financial statement can also enable you to see where you are spending your money, spot any trends and account for every single dollar.
- Keep this economic downturn in perspective. If you lead a house of worship, that means your congregation has faith. And your faith will be what brings your through this time. Remember, there are others who share your faith around the world who have much bigger struggles than you do.
- Communicate with your members. Make sure they know how inflation has affected your congregation. If you have investments that have taken a downturn, be transparent about your losses. This is the best way to build trust among the people who worship with you.
Remember that this, too, shall pass, and you will be that much more prepared to handle the next crisis. Visit Church Mutual’s website for more resources for houses of worship.