By Todd Adkins
The purpose of contingency planning is to ensure continuity of church and ministry operations or financial stability. Contingency planning can help churches and ministries recover from disaster and minimize the amount of impact caused by a crisis. The goal of a contingency plan is to restore normal operations at a minimal cost and with the least amount of disruption to ministry activities, following a natural disaster or other major event. This approach is not done out of fear or a lack of faith but is ultimately a stewardship issue.
It may be easy to find contingency plans online, but it is important to contextualize any plan for your church or ministry, as it will be unlikely that you will find one that 100% matches your local church or community.
Three Considerations for a Contingency Budget
Businesses make contingency plans as a part of their budgeting process each year to ensure they have a specific plan for any surplus or deficits they may encounter. While churches are less familiar with this type of plan, they are often more vulnerable than many other organizations because they are heavily dependent on one area of income: weekly giving.
Whether your weekly giving is up or down compared to last year, you need to have a plan. With events in recent months, none of us know how long this crisis will last or what giving will be like in the coming months. At the very least, you should be assessing your cashflow, your uncommitted reserves, and budgeted expenses.
- Cashflow. Be sure to track your cashflow projections. A simple way to do this is to monitor your giving week to week or month to month compared to the last three years to see where you are headed.
- Uncommitted Reserves includes your surplus cash, instant reserves, and unused lines of credit, as well as additional assets.
- Your budgeted expenses are fairly straightforward. This part of your budget is where you have the most control to reduce expenses or shift resources as needed.
Ministry Contingency Plans
In addition to budgeting contingencies, there are other contingency plans to consider like ministry programming. What does ministry programming look like if your church facility remains closed for various lengths of time? How will you adjust essential ministries as well as procedures through different phases of reopening?
To help your church move toward a new normal in response to COVID-19, Ministry Grid has created a free course, which includes sample contingency plans and budgeting templates. This course will help your team to establish clarity in the midst of chaos, think through who you’re serving, create financial and ministry contingency plans, shift focus and resource the right things, and emerge from this season stronger than before.