spending wisely

Synagogue budgeting and financial sustainability: tips for uncertain times

It is approaching a year since our synagogues across the continent abruptly had to shut their doors immediately following Purim. In quick succession we went from discussions about how to hold safe services, to are we still serving Kiddush, to should Purim Megillah readings be held in person? As our synagogues moved into the virtual space, major budgeting issues arose. Since the vast majority of synagogues operate on July 1-June 30 fiscal years, most congregations were entering the final quarter of the year with the majority of their revenue already collected. However, synagogue boards were trying to navigate the planning for the remainder of the year and the budgeting process for the following year in total darkness. How does one project expenses and revenue without knowing what the future holds and what the government will allow?

Having now finished a full annual cycle under these new conditions, we have learned more about opportunities for revenues and savings, and more than we ever thought we would learn about PPP loans and the SBA! How do we translate this new, broader vision of what the future of our synagogues could look like into a budget with detailed workings? As we enter the new budget season, I have compiled some recommendations  for budget committees and synagogue leaders, both lay and professional, based on the many conversations I have had this year.

  1. Be realistic, not emotional in your projections: We sometimes have a tendency to budget aspirational rather than based on previous history and data, but it is important to use as much data as possible. For the upcoming year three to four years of past data is appropriate. You shouldn’t be too aggressive, but being overly conservative isn’t helpful either as it can cause unnecessary cuts to programs and jobs. Even considering the tremendous upheaval that the pandemic has had on our institutions and budgets I believe we can find some historical data and precedent for our projections. We must also take into consideration the expense differential between virtual and in-person events and programs.
  2. Involve as many people as possible in the budgeting process: Now is not the time to keep the budget process a secret. Transparency is more important than ever in getting and keeping your members and stakeholders involved and supportive. If they know what efforts are being made to keep the synagogue going and what challenges you are facing, they will be more likely to step up and support the synagogue to the best of their ability. The more people that provide input to the budget process, the more people there will be invested in its success.?
  3. Review all business contracts: This process should take place annually, but with this past year of closures and reexamination of our building usage  it is especially critical to look at all of your commitments, including: copiers, phones, mortgages, lines of credit, insurance, security, rentals, etc. Are there better rates or possible renegotiation options? Are you using these resources in the same ways they were previously? This might be a time for a reallocation of resources.
  4. Remember to communicate with your vendors: Many synagogues have established relationships with vendors such as caterers, local businesses, Judaica vendors, supply companies, banks, funeral homes etc. Some of these vendors have weathered the last year better than others. Don’t be afraid to reach out to them to see if they can help you during these difficult times, or to reinforce any support and help they are giving you. In most cases, they will be expecting your call and won’t be offended. If they can help you by cutting fees or costs it will have been worth it, and if they can’t, they will let you know. In some situations where the vendor has had a really bad year the synagogue can show kindness and support by comping ads in a journal or encouraging member support. The vendor will really appreciate the caring.
  5. Technology is here to stay so budget for it: I truly believe that technology including zoom, live streaming, and recording and sharing classes and programs, including school will be with us moving forward even when we fully return to our buildings. That means that investment in hardware, as well as monthly and annual agreements, will also remain with us. It is important to budget for these realities but to also see them as new development and endowment opportunities available to your donor base — perhaps a technology endowment moving forward, or a monthly sponsorship of zoom. There is also an expanded opportunity for synagogues across the state, country, or continent to work on cooperative adult education, holiday programs, or even fundraising events. These partnerships can increase revenue and exposure while managing and sharing expenses.
  6. Recognize changing trends in your expense lines: Certainly with buildings closed, or opened on a limited basis, our spending patterns have changed. Our job is to plan for those trends moving forward. What will go back to “normal” and what has changed for the foreseeable future? For instance, will we go back to the previous buffet plated kiddush of the past, or will it be individually wrapped, single serve products? Will we maintain the more stringent cleaning regimens and supplies that have been put in place? How have our security needs changed, or have they? Are we less reliant on hard copy mailings and more social media based? These expense lines should all be thought out and quantified. Make sure to identify discount or savings opportunities. At USCJ we have created an Operational Effectiveness committee and money saving partnerships with entities like the Buying Networks to help synagogues save important dollars.
  7. Don’t rush to lower dues and fees: I spoke to leaders who tried to proactively anticipate a drop in affiliation support or program fees so they thought they would get ahead of the issue by cutting dues and fees. Please think very carefully before doing this! People who don’t or can’t pay full dues will reach out individually to you and won’t be affected by the discount. Instead, you will be reducing your expected revenues from many who would pay  full dues. In addition, once dues and fees are reduced it becomes much more difficult to raise them again.
  8. Dont be afraid to ask for money: One of my biggest concerns over the last year was how frequently I heard from synagogue leaders who were hesitant to ask their membership, and especially past donors, for contributions. If you don’t ask for money you probably won’t receive what you need. People who are struggling and can’t give as they have previously will let you know. However, there are many people who have the capacity to give and they want to be asked! Don’t miss this important opportunity. Additionally, be sure to acknowledge the support you receive. I have repeatedly heard from synagogue leaders how pleasantly surprised, and even amazed, they were at how many of their members have continued giving through dues, increased donations, and consistent financial support  throughout this year. This group knows that others are hurting and are rising to the challenge. These members should be appreciated and thanked!
  9. Developing or growing an endowment or legacy program has to happen NOW: The time to kick the can down the road regarding endowment and legacy planning has passed. Even in the midst of a pandemic we need to be planning and meeting with members about legacy gifts, leaving money in wills, or adding the synagogue as a beneficiary to life insurance. Too many institutions are lining up to ask our members to consider them in the future and we can’t be left behind. Have the conversations and develop an ongoing plan.
  10. Make sure you are on all the proper funding opportunity lists going forward: Are you on all federal, state, local, and federation mailing lists that might give you updates and information on possible funding or grant opportunities? Synagogues have applied for homeland security grants, PPP loans, as well state and federation relief and stimulus funding. Don’t hear about possible funding after the fact. Be sure to network with other religious organizations and institutions to remain well informed.

The last year has been very trying and challenging for synagogue leadership, and many have faced membership, programmatic, and financial challenges. If you keep these tips in mind, there are ways to maximize our revenues, limit our expenses, and enhance our relationship with members, donors, and vendors, strengthening our financial sustainability for the year ahead.

Barry Mael is Senior Director of Synagogue Affiliations and Operations, USCJ.