As I have mentioned before, I am the current chair of our congregation’s Finance Committee. Why would a person who is pathologically afraid of numbers and who was an English major take on such a role? Now that, ladies and gentlemen, is an excellent question. Three years in, and I’m still asking that same question.
However, I’ve learned a lot. Did you know, numbers are interesting? And…they are very, very important? Of late, I have become more invested (see, I’m even using number-related puns) in understanding Inflation Adjusted Dollars.
In short, Inflation Adjusted Dollars means the impact that inflation (increases) has on the dollar year-after-year.
For instance, if you spent $100 dollars in 2020 – because inflation has cumulatively gone up 16% – it will now cost you a whopping $116 to buy the same product in 2023.
Why does it matter? Most of us are thrilled if our congregants match what they gave the previous year. If giving to the budget stays the same, we’re not “losing” ground right?
In fact, you are. Because costs are going up, less ministry is getting done if your giving stays static each year.
As Joe Park, CEO of Horizons Stewardship, says in his brief 2022 video overview of the impact of the economy on the church:
On average, it’s going to cost 9% more just to provide the same level of ministry impact that we are experiencing today.
You need to grow giving by 9% just to stay even.
Ken Sloane, Director of Stewardship & Generosity for Discipleship Ministries of The United Methodist Church, has also outlined in his excellent post, For What It’s Worth: Inflation-Adjusted Dollars and Your Church, things you should be thinking about related to Inflation Adjusted Dollars:
1. What is happening with your church budget?
2. What is happening with clergy/staff compensation?
3. What is happening with church/building repairs?
4. What is happening to contribution income?
5. What is happening with individual givers?
What’s a church to do?
Take a moment for the shock to wear off. Then, dig in to explore what a realistic inflation-adjusted budget might look like for your congregation. Spend some time with the nifty US Inflation Calculator.
Start thinking about how you will educate your congregation about Inflation-Adjusted Dollars. No doubt, your folks are feeling that inflation pinch and you know how much they love your congregation and the ministry you’re providing. Let them know how the economy is impacting the church.
Plan now for how you will ask your congregation to respond to the challenge of meeting (and even exceeding) the inflation rate.
A “faith budget” – setting a budget with only prayers to meet the income need – rarely, and I mean rarely, works. This is the time to start educating yourself and your congregation about Inflation Adjusted Dollars so that there are no surprises when it comes time to set your budget or your stewardship goals this year.
Take it from me…a sworn arithmophobe, it’s better to know than not know. And if I can understand it (and be inspired by that knowledge), then you can too.
Photo credit: Gerd Altman @ Pixabay.com