President's Blog

Gift, Loan, Subsidy: Addressing the Financial Ripple Effect on Churches this Summer

I was on a Zoom call with 40 evangelical denominational leaders the other day discussing COVID-19 and the Church’s response within Canada.

Among other things discussed was the financial effect our current crisis will have on the local church in the short- and long-term. A few leaders mentioned that some of their churches had already laid off their pastor. That same week I connected with our five Fellowship Regional Directors to discuss the same subject matter.

Several weeks ago I shared about a survey that was taken reflecting the views of 1,573 pastors, most of them evangelical (posted March 27). They were asked about a variety of subjects related to the COVID-19 crisis. [Click here to view the full report.] When pastors were asked how confident they were about finances, all recognized the coming challenges. Most pastors also admitted we have not experienced the full ripple effects of COVID-19 on church giving.

When asked, “How prepared is your church financially to face the crisis?” the responses were:

  • 52% admitted it would be tight but they would manage by reducing expenses without too much pain
  • 20% responded that finances are not a significant concern
  • 7% reported they would likely have to cancel or delay key upcoming initiatives
  • 14% admitted the likelihood of significant cuts including pay cuts and layoffs
  • 6% admitted that if the crisis lasted more than a few months they would be in financial trouble. This percentage is likely to grow as giving potential slows down in the historically slower summer months.
  • Smaller churches seemed to indicate a greater degree of concern. In fact, of those who replied that their church might have to close, 53% were pastors of churches under 50 members.

In light of these initial findings, I thought I should inform you of some Federal government subsidies and loans available to non-profits, including churches. You may already be aware of these programs [as of the April 16th, the time of production of this blog post]. Our Regions have been getting the word out. [Note that some of this information is changing.

  1. Temporary Wage Subsidy
    This program is for small businesses including non-profits and registered charities, which means our churches can definitely benefit from this.
    Basically it relates to payroll deductions; the church would calculate the payroll the same as before, but when they go to submit the deductions owing to the government they can reduce the amount of the deduction by up to $1,375 per employee for up to a total of $25,000 per church over the period between March 18 and June 20. You can find further explanation HERE.
  2. Canada Emergency Business Account
    To ensure that small businesses have access to the capital they need to see them through the current challenges, the Government of Canada is announcing the launch of the new Canada Emergency Business Account, which will be implemented by eligible financial institutions in cooperation with Export Development Canada (EDC).
    This $25 billion program will provide interest free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced due to the economic impacts of the COVID-19 virus. This will better position them to quickly return to providing services to their communities and creating employment. Small businesses and not-for-profits should contact their financial institution to apply for these loans.
    To qualify, these organizations will need to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25% (up to $10,000).

  3. Canada Emergency Wage Subsidy
    The Government of Canada has established the Canada Emergency Wage Subsidy which, once the bill has passed into law, will provide a 75% wage subsidy to eligible employers for up to 12 weeks retroactive to March 15, 2020. If a company (including not-for-profit organizations) has had a reduction in revenues by more than 15% in March 2020, and 30% for the following months, they can receive up to 75% of the amount of remuneration paid up to a maximum benefit of $847 per week per employee. (For more information and/or to see if your church qualifies for this subsidy, CLICK HERE.)

  4. Churches Supporting Churches
    Occasionally I hear an encouraging story of a Fellowship church coming alongside a sister church and helping them financially. For the past five years I’ve had the joy of partnering over 75 English-speaking congregations in four Fellowship Regions with French-speaking church plants in our AÉBÉQ (French) Region. The partnership is for seven years, which includes financial support along with other kinds of resources. This partnership has been instrumental in establishing the planting of about a dozen church plants in our AÉBÉQ Region. From my seat, this has been incredibly gratifying to watch. Imagine your church coming alongside another sister church during the COVID-19 crisis and helping them financially for the next three to six months. This could possibly be a church in your neighbourhood, your Association, or Region? What an encouragement it would be to temporarily lift the burden and give them a leg-up. Something to think about? Pray about?

One interesting find in the survey was that half the pastors requested content on how to maximize online-giving. This is not so much a reflection on a concern for finances, but a recognition that many of our church members are just learning how to give online. This crisis will likely change the way the faithful give forever.