What Tim Jacobs is Advising EFCA West Churches in Preparing for Financial Challenges From the COVID-19 Recession

As the economic challenges mount in the Western United States, District Superintendent Tim Jacobs communicated how EFCA West churches can prepare. There are 260 EFCA West churches in this large EFCA District and this blog is curious as to how many will fold as a result of the COVID-19 recession. This post is looking at some of the economic issues unfolding in places like Nevada, Arizona and California and offers some additional advice to the EFCA encouraging additional planning as well.

“I think it’s realistic to have hope. One can be a perverse idealist and say the easiest thing: ‘I despair. The world’s no good.’ That’s a perverse idealist. It’s practical to hope, because the hope is for us to survive as a human species. That’s very realistic.“

Studs Terkel

“It’s the economy, stupid.”

James Carville

Do not be anxious about anything, but in every situation, by prayer and petition, with thanksgiving, present your requests to God. 7 And the peace of God, which transcends all understanding, will guard your hearts and your minds in Christ Jesus.

Philippians 4:6-8 NIV

Tim Jacobs

Washington Post video on the effects of the economic shutdown of Las Vegas.

The COVID-19 pandemic is hitting the United States hard. It is not equal and it varies upon the differing parts of the country. In Nevada its estimated that one in three workers is in the hospitality industry.  In late March the Nevada Resort Association warned that southern Nevada would lose over $40 billion dollars from the economic shutdown. And that 158,000 jobs will be lost in the tourism industry plus Nevada tourism is responsible for 40% of the state’s general fund revenue. Within the Silver State the financial implications are expected to be twice as worse then the effects of the Great Recession of 2008.  Many other areas across the American West are financially being hammered. In Utah according to the Salt Lake Tribune 150,000 people filed for unemployment since the COVID-19 pandemic began. South of Utah in Arizona the effects of the pandemic are hitting hard as well. Since mid March over 345,000 have filed for unemployment. In the week ending for March 21, 29,348 filed unemployment applications. That soared to nearly 90,000 one week later. By April 4 that number jumped significantly to 132,383 applications before going down a bit to 95,382 for the week of April 11. In Arizona each week of claims for unemployment surpassed a single week during or after the Great Recession of 2008. In Southern California the COVID-19 pandemic is both a medical emergency and economic problem with Los Angeles County hardest hit. Half of the 52,000 coronavirus infections in California are in Los Angeles County alone. As Los Angeles deals with this health emergency the shut down is affecting the local economy. According to one source 1.3 million jobs have been lost in the Los Angeles area since mid March 2020. 

So here is the question what does all this economic news mean for for the 260 EFCA congregations under Tim Jacobs? Tim Jacobs has only been in this position for roughly four months now. You can read about him in the following posts. “District Superintendent Steve Highfill Leaves EFCA West as Tim Jacobs Steps into the Key District Role” and “Open Letter to EFCA West District Superintendent Tim Jacobs (On When Evangelical Christianity is Abusive Your Witness is Pointless)” What does this hard economic news mean for for places like Kevin Scott’s The Stream in Las Vegas, Nevada? What does it mean for Brian Hammonds of First Evangelical Free Church of Las Cruces, New Mexico? What does this mean for Darin McWatters of Fullerton Free in Fullerton, California? What does this mean for Scott Yetter of the Evangelical Free Church of Los Angeles? To be frank this economic news will mean quite a bit and its going to be challenging. 

 

What Tim Jacobs is Communicating to Churches in EFCA West

You can read the communication below but to the EFCA churches in the district planning is underway and churches are being advised how to proceed and what they should anticipate. Some of what the EFCA West has communicated is the following:

1. This economic news can have implications for smaller churches which could have been struggling to get by originally. 
2. Larger churches may have to make significant cutbacks in their budget and plan for a hard road ahead. There problems will be different. 
3. Within the EFCA West district there is a ministry that can help connect churches that are experiencing financial difficulties to those that can help keep them afloat. This program allows money to change hands and the EFCA West does not touch the money. From what I read below its almost as if the district matches churches up and lets them work out the challenges or issues. The money goes into the church general or benevolence fund. EFCA West is encouraging churches to plan and work on issues now before things become difficult. 
4. The EFCA District is communicating about Church Surviveability Planning. EFCA West is encouraging churches to plan ahead and work on programs for anticipated  financial challenges. Its easier and healthier to plan and come up with a plan that can be implemented if need be. By making the hard decisions now that will help when those decisions need to be implemented. It removes the emotion from the decision making as people are thinking more clearly now. Churches should know their funding. They should know their major donors and plan accordingly if they can’t give. Likewise what about the economy of where you are at? How will the economic turmoil affect those who are employed? In addition plan now for giving to drop. Work out a plan so that if giving drops 10 or 20% or higher you respond accordingly.  

 

Some Closing Thoughts on the Economic Challenges That Are Coming

When this economic crisis is over it would be fascinating to go through the list of churches and see which ones made it and which ones folded. These are going to be challenging times for many churches and the people within those churches. What the EFCA should also do in this blog’s opinion is create a program that helps those within the churches who may lose their job. A program that helps people make cut backs, reviews spending and can connect them with others who can assist in dire situations. These needs are usually met by the benevolence fund but this blog wonders if those funds are up to the challenges that are coming? This blog believes many benevolence funds are going to be underwater with the need being too great. The unemployment numbers are historic and breathtaking. But there is also another component to consider in this calamity. Many members in the congregations are going to develop mental health needs as the stress from this situation continues. It will actually be two fold. One side of the stress is relates to the COVID-19 pandemic. An airborne virus and the fear and anxiety that comes along with being infected. The other side is the economic that is related to job losses, closed businesses and the anticipated budget cuts that are coming from city and state government. This afternoon the Washington Post reported on the growing mental health crisis happening in the United States. Is that issue on the mind of the EFCA? If not it should be. You can’t just say “God is sovereign” and leave it at that. The ramifications from this pandemic are severe. Its my hope that people remain safe and that this troubling times will one day be behind us in the near future. 

 

Below What EFCA West Communicated to its Churches

EFCA West staff anticipates economic hardships to be especially severe in the coming weeks and months among our smaller congregations. While not always true, smaller congregations tend to have fewer margins in their finances and little, if any, money held in savings. Larger churches may need to make significant cutbacks while smaller churches fight for their survival. EFCA West’s Financial Support Ministry is now available to connect churches and individuals that are able to share financially with churches experiencing severe financial distress during this event. It is a simple process where EFCA West connects those in need with those willing and able to help with the giving done between the parties and EFCA West not handling any funds. Here’s how it works. Churches and individuals that may be able to help other churches should send an email to efcawest@efca.org expressing their willingness to do so. Include your name and contact information (phone number and email). It would be helpful to include an approximate amount that you might be prepared to give so that we have an idea of who to connect with whom. Churches that have needs should let their needs be known by sending an email to efcawest@efca.org specifying the need, the amount, and the person to be contacted should a donor be located. The types of needs we envision meeting include helping churches unable to pay pressing bills; helping pastors and church staff with bill payments or salary assistance caused by reductions in giving due to the COVID19 event and helping churches with benevolence. Note that these gifts are intended to help churches with significant problems. Everyone will likely hurt some and need to make cuts in their living expenses before seeking assistance from others. When such curtailments no longer work, it’s time to ask for help. Donor churches and individuals will generally be encouraged to give directly to the church in need by giving to that church’s general or benevolence fund rather than giving directly to individuals (an individual’s monetary gifts to another individual is an exception). Churches typically cannot give cash gifts to individuals but can give them to other non-profit religious organizations including churches which can then provide benevolence. Note that, in general, tax deductions for individual gifts to other individuals are not allowed, and benevolence provided to employees of the church is treated as taxable income. EFCA West will only assist with needs presented by churches whether for the church or one of their members to ensure legitimacy of needs. We will not process requests received directly from an individual. EFCA West believes this is a time for churches to share with one another and we encourage you to be generous if you can. Should you have questions, please contact us at efcawest@efca.org for more information.

CHURCH SURVIVABILITY PLANNING Other than house churches, churches and other non-profits survive financially on the generosity of others. During times of localized crisis (e.g. earthquake, tornado, etc.), generosity typically peaks fairly soon and then subsides. This pandemic is different in that the economic impacts will not just be local, but will be nationwide and even worldwide. There will be no geographic area or economic sector untouched by this crisis from which to receive significant financial support. In short, there may be no peak in generosity EFCA West recommends that church leaders begin now to address their current and projected financial situations. The principle behind acting now is that it is much easier and less traumatic to address financial shortfalls very early than to watch and wait, hoping it will go away, and having to make much deeper cuts later. Here are some suggestions to consider. Do you know where the funding for your church comes from? Are there a couple of major donors upon whose gifts you are quite dependent? Have you talked with them about what financial issues they are facing and how that might impact the church’s finances? Upon what economic sectors are your congregants dependent? For example, if you are in a travel-dependent community, the loss of travel-related jobs and income will be a significant impact. Does the church have savings that could be used to help navigate a short- to moderate-term cash flow deficit? How long will it last if we don’t make curtailments now? If giving falls to 75-80% of normal for a period of three months or more, where would you need to make spending cuts? Note that I invented the 75-80% figure – there’s no science or prescience involved. Consider creating spending curtailment plans such as the following: Curtail all non-essential spending immediately. Create a list of spending cuts required to meet a drop in giving of 10, 20, 30, 40 and 50 percent as soon as possible. It is better to make these plans today while we can think logically than waiting until the last minute when we are more likely to be impacted by emotions. If possible, set aside some funds to share with those in need.

 

CARING FOR LONG-TERM FINANCIAL NEEDS OF CONGREGANTS It is anticipated that there will be severe economic damage resulting from the COVID-19 event and that many of our congregants will experience severe financial problems. How do we care for them? Leaders may start by preparing them for the potential of a “new normal” in their lives. Economic recoveries tend to take time. People will find that their business doesn’t survive, their jobs don’t come back and they will need to make major adjustments from their previous standards of living. Some will lose homes. We can prepare people for these things through our teaching of scripture, providing training on handling personal finances, providing third-party mentoring or advice for those needing to make significant decisions and supporting them through prayer and trained counseling. We can also encourage those experiencing less loss to be sacrificially generous to those that have suffered more greatly. Churches will likely find significant increases in requests for benevolence. Because this crisis will likely be prolonged, consider exercising even more discretion in distributing these funds so that you have funds to distribute in the future. Leaders may need to triage financial needs to differentiate between the most compelling needs and those that we might not be able to meet. We may need to help people find creative means for meeting needs that do not require spending funds we don’t have to spend. All of the guidance and recommendations that have been provided by EFCA West assume that church leaders are bathing their actions in prayerful dependence upon God for wisdom and guidance in the decisions they make and in obedience to scripture. This is our prayer for you and for us as we walk through this together.