6 Strategies to Increase Church Funding

Have you noticed that your congregation’s giving isn’t able to keep pace with your congregation’s expenses? At first maybe you thought it was an anomaly and decided to ignore this church funding problem, saying something to yourself like: “After all, in-person worship hasn’t recovered since the pandemic, once everyone is back on Sunday morning it will be fine.” Or maybe you decided to make some minor cutbacks or borrow from savings to keep your congregation afloat financially. You go into the next year thinking that things will get better and instead the gap between income and expenses widens even further. You may wonder: “Are we alone in this? Are other churches experiencing this issue? What can we do to keep the church afloat?” 

In her TED Talk, “Why we ignore obvious problems – and how to act on them”, policy strategist Michele Wucker introduces the concept of the gray rhino: an obvious problem that’s charging right at us and it’s ready to trample us if we aren’t careful. Gray rhinos are preventable dangers that no one wants to talk about until it’s too late. For many congregations, it has become less and less feasible to fund their missions on tithes and offerings alone. This is a gray rhino that I have seen too many congregations ignore until they have no other option but to close. The good news here is this: 

• You aren’t alone in this situation.
• There are many options for bringing in income outside of the offering plate that can help you increase church funding and live more deeply into the mission God is inviting your congregation to join. 

I have spent the last year studying over 100 congregations who are finding pathways to sustainability by bringing in income outside of the offering plate, creating self-sustaining ministries, and/or reducing their budgets. My research team and I also had the opportunity to go deep through a series of interviews with 12 of these congregations. Here are six strategies to increase church funding that our research identified:

1. Rent Church Property: Far and away church property rental is the most common income source I see.

• Over 70% of the 101 congregations we surveyed had used or were considering using it and it was popular amongst congregations of any worship size.
• The income generated from property rental often met or surpassed the congregation’s financial goal (60% of those surveyed) and was used to provide a small, consistent income source. 
• For a little over a third of congregations who had used or were currently renting church property it covered 0-9% of their congregation’s budget, for another third it covered 10-24% of the budget, and for the remaining third, 25% or more! While those numbers may seem small, let’s do the math. If your congregation’s annual budget is $100,000 and your congregation earned an extra 9% each year through rental income that would be an additional $9,000. Imagine what ministry might be possible with that additional income! 

Might there be a space (or two!) in your congregation that you could lease out to a community partner for long-term rental?

2. Create Self-Sustaining Ministries: A self-sustaining ministry is a particular ministry or program of the congregation that brings in enough income to meet its expenses. I was surprised to see that nearly 50% of the surveyed congregations had at least one individual ministry that was self-sustaining, and an additional 20% who did not have one now hoped to in the future. Surprisingly, three-quarters of these self-sustaining ministries became self-sustaining in under ten years and nearly half in less than four years. The sooner the intention to become self-sustaining was set the sooner the ministry became self-sustaining. There were a variety of things these congregations did to make ministries self-sustaining including: 

• developing community partnerships (70%)
• clarifying the program’s mission (66%)
• fundraising outside the congregation (66%)
• soliciting grants from outside of a regional church body or denomination (58%)

Might there be a specific ministry program that could bring in enough funding to sustain itself to free up money for other areas of the budget?

3. Secure Grants: Grants can be a great source of start-up funding and in some very specific cases may provide longer-term funding for a project. Often congregations assume there are no grant opportunities that will be open to them because of their faith-based status. However, there are many funders that are open to working with faith-based organizations if they have a project that aligns with the funder’s goals. Over half of the congregations in the survey had utilized (or were considering utilizing) grants from organizations outside of their denomination or regional church body. Congregations of any size utilized grants, however the most popular demographic tended to be newer (0-59 years old), urban congregations. 

• Interestingly, most congregations had received grants in the last 10 years, so this is a relatively new income source compared to others on the survey. 
• Generally grant funds met or surpassed the congregation’s financial goal (69%). 

Many of the 12 congregations we connected with during the interview process received grants from their regional church bodies or denominations – these grants, while smaller, are often easier to access. 

Is there a granting organization who shares the values of your congregation who might be interested in funding a segment of your congregation’s work?

4. Start a Social Enterprise: A social enterprise is a business venture that seeks to create social impact while also generating a financial return. In the survey, my research team and I captured data about social enterprises using a few different categories since we’ve noticed that many congregation leaders aren’t as familiar with this term and thus would not necessarily classify their ventures as social enterprises. We asked respondents about “starting and maintaining a social enterprise or business,” “selling products or services,” as well as “forming a nonprofit organization.” We found:

• 20 congregations had started a social enterprise or business 
• 14 were considering starting a social enterprise in the future
• 17 were currently selling products or services 
• 6 were considering selling products/services and 2 had done it in the past
• 26 congregations were forming/had formed a nonprofit organization 
• 16 were considering forming a nonprofit

For the congregations that did set a financial goal, their ventures generally met or surpassed their financial goal with an 85%+ success rate. For the most part, these ventures funded 0-9% of the church’s budget. However, there were two outliers. For about a third of those who had formed a nonprofit, it funded 10-24% of the church’s budget. And, surprisingly, for about a third of those who had started a social enterprise, it funded 60%+ of the church’s budget. Interestingly, these latter congregations were not large, they had 300 or less people in average worship attendance each Sunday. 

Might there be talents and skills in your congregation or its surrounding community that you could tap into through a social enterprise?

5. Realign Your Congregation’s Budget: 20% of the surveyed congregations had reduced their budget by 5% or more in the last 10 years. Most (60%) had made a medium-sized budget reduction to church programs and/or staffing. While it may be tempting (and more exciting) to tend to the income side of the equation, pruning the budget so you can reallocate budget dollars is often the best first step to gain broader mission alignment and make more effective use of the dollars the congregation is already receiving. Too often congregations try to placate the charging gray rhino by slicing slivers off the congregation’s budget each year. And yet, just like personal finances, sustainability is most often found through creating larger, more lasting changes. 

Might there be a program your congregation could let go entirely in order to find financial sustainability and better align with its current mission?

6. Shift Your Church’s Leadership Model: Many congregations also found financial freedom in changing their staffing model from clergy-led, lay-supported to lay-led, clergy-supported. This didn’t mean that paid ministry leaders went away entirely, but they played a different role. Instead of having one pastoral leader in charge of the congregation’s ministry, they might hire one (or a small team) of part-time ministry leaders who offered specific gifts to the congregation while most of the ministry was led by people in the pews. Considering staffing costs make up a significant portion of congregations’ budgets, reduction in costs for salaries and benefits made a big difference to the congregation’s bottom line while also inviting new voices and gifts into the ministry. 

What might it look like to lift up people in the congregation to not only support the ministry but also lead it? How might this free up pastoral and staff time as well as budget dollars?

More to the Church Funding Story

One of the biggest surprises of the survey data was that generating income outside of the offering plate not only brought in additional funds, but helped the congregation to expand its reach and in some cases created unexpected opportunities for evangelism. For 8 out of the 9 income sources we looked at in the survey, over 50% of the congregations who had used or were currently using those income sources said the income source was successful at creating meaningful relationships with people outside of the church.

With a bulky gray rhino charging at us, it can be easy to think the problem is just about money – but really – it’s less about money and more about mission. Often, congregations struggle to bring in income because they are disconnected from the people they are called to serve and the mission God is calling them to join. Funding Forward is about finding more sustainable models for ministry that emerge organically from the congregation’s mission. 

This isn’t about saving the church, it’s about finding a more sustainable way to live into God’s call. 

Interested in learning more about these income sources and how your congregation might find a more sustainable way forward? Check out a free chapter from Grace’s 2024 book, Funding Forward: A Pathway to More Sustainable Models for Ministry.