Continued from Part 2.

It is imperative that a ministry has guidelines that shape its financial decision-making. Simply, without sufficient overarching principles in place, making particular decisions about how monies should be spent and how budgets should be cut becomes very subjective and inconsistent. This becomes increasingly important in larger ministries where multiple people are making budget decisions. Therefore, the following principles are offered as examples that we are using to guide some of our financial decision-making at Mars Hill.

4. Fairness

When financial cuts need to be made, don’t subscribe to fairness and make cuts across the board and across all ministries and staff members.

Instead, fund your core ministries and key leaders first and best.

One of the great errors that ministries make in hard times is imposing cuts across the board. This is unwise because cutting core ministries will compromise the health and viability of the church. Some ministries are supplemental—not primary—ministries. Secondary and supplemental ministries need to be cut back or even eliminated before there are deep cuts to primary ministries.

5. Terminations

It is wiser, if needed, to fire a few people than to cut everyone a little bit, because that hurts and discourages the best performers and carries the worst performers. If terminations are necessary, it is important to do so sooner rather than later. This allows you to give generous severance to those who are losing their jobs in hopes of giving them time to find replacement work. If you wait too long to cut staff, you will not have the money to pay them decent severance, which is unkind and really hurts morale. Additionally, just because there are terminations does not make it wrong to also give some people strategic raises. If some people are doing an amazing job and carrying more responsibility than ever, they may still merit a raise, even in tough times.

6. Hiring

Financial downturns are a great time to hire strategic senior-level leaders because the market for them has shrunk and they are available.

Many ministries are overly concerned with keeping everyone they have on staff, and in so doing they can easily overlook the opportunity that is before them to hire world-class staff members that could increase the bar of excellence in the ministry.

7. Real Estate

This is the time for multi-campus churches to pursue real estate from dying and struggling churches that are facing an uncertain future and would benefit from a partnership that breathes life into them. This is also a good time for any church, if it is able, to pursue purchasing real estate because the market is down and prices are cheaper than they have been in many years.

8. Visibility

People judge the love and health of a church in large part by what they see and do not see.

Therefore, to not give the impression of greed, we need to watch the appearance of lavishness personally and organizationally.

To not give the impression of ingratitude, we need to make sure the last things we cut are thank you gifts, volunteer appreciation, and bonuses. To not give the impression that we are poor stewards, we need to watch visible areas of waste. To not give the impression of being untrustworthy, we need to always spend money we receive on what we promised we would spend it on. Ministries that inappropriately spend designated funds are destroying their credibility with their donors and in so doing are sawing off the branch they are sitting on.

To be continued.