Summer often brings a slower pace for churches. Whether it’s fewer events, vacations, or a chance to catch our breath, it’s also the perfect time to check on the church’s financial health and plan for the future. In this blog we will explore why churches need a “rainy day fund.”
What Are Cash Reserves?
Think of cash reserves as a church’s “rainy day fund.” Just like families save money for unexpected expenses, churches should be setting aside funds to handle surprises without disrupting their mission.
Why Are Cash Reserves Important?
- Handling Emergencies: Unexpected repairs or needs can arise. Having reserves ensures the church can address these without panic.
- Managing Seasonal Giving: Donations might dip during certain times. Reserves help maintain steady operations.
- Seizing Opportunities: Sometimes, unexpected chances to serve or grow come up. With reserves, the church can act promptly.
- Demonstrating Stewardship: Being prepared financially shows responsibility and builds trust within the community.
What are Steps to Take to Save?
There’s no one-size-fits-all answer, but here are some guidelines …
Step 1
Create a safety net and aim for 3 months’ worth of operating expenses. Having 6 months or more is ideal, especially if the church has debts and other obligations to pay.
Step 2
Include a line in the budget specifically for adding to the reserves.
Step 3
If there’s extra money at the end of the year, consider directing it to the reserves.
Step 4
Organize events or campaigns focused on building the reserve fund.
It’s important to plan ahead. Set clear goals and timelines for reaching desired reserve levels.
Communicating with the Congregation
Transparency is key. Share the importance of cash reserves with church members
Hold meetings to explain the purpose and benefits of reserves. Provide periodic reports on the reserve fund’s status. Use scriptures like Proverbs 6:6–8 to highlight the wisdom of saving.
6 Go to the ant, O sluggard;
consider her ways, and be wise.
7 Without having any chief,
officer, or ruler,
8 she prepares her bread in summer
and gathers her food in harvest.
Proverbs 6:6-8 ESV
Summer is the Ideal Time to Act
With a calmer schedule, summer is an excellent time to:
- Review Finances: Assess the church’s current financial standing.
- Set Goals: Determine how much to save and by when.
- Engage the Community: Involve church members in the planning and saving process.
Conclusion
To answer the question “Why churches need a rainy day fund?”
Building and managing cash reserves isn’t just about money, it’s about ensuring the church can continue its mission. By planning ahead and involving the community, the church can be a beacon of stability and hope.
