Churches often make budget cuts the easy way, as shown in the chart above. They choose a percentage by which the entire operating budget should decrease. Then they force every department to cut the same amount across the board. Essentially, the waterline is lowered for everyone.
It sounds fair to treat everyone exactly the same. Hard conversations are unnecessary and no one gets their feelings hurt. The ship might be sinking but at least everyone is going down together! (Actually they won’t. The best leaders will recognize what is happening and jump ship before it is too late.)
Here are some problems with flat-rate cuts:
Not every ministry is equally essential to your mission.
Forcing the same cuts on everyone does a disservice to your strategy.
It discourages high performers.
They worked hard to build the ministry only to be forced to scale back efforts, receiving the same treatment as underperforming peers.
It focuses on a money issue, not a ministry issue.
In most cases, if the budget is being cut because the church is in decline, the real problem is not the budget. Avoiding tough calls leaves real problems unaddressed.
Budget cuts, when led well, can actually create a healthy season of pruning in the life of a church.
So if you are faced with budget cuts this year, how can you approach them in a healthy way? Work through these five levels of a healthy pruning process. Start at the top and exhaust each level of cuts fully before moving down to the next, if necessary: