“Uncertainty about the economic outlook has increased further.” Those words from Federal Reserve’s policy statement in May¹ couldn’t be more accurate. In the wake of the widespread tariffs on imports to the U.S., a few primary risks are coming into focus for religious institutions and other nonprofit organizations.  

Over the past year we’ve seen pent-up demand for new construction and renovation projects among houses of worship begin to loosen. Projects that had been shelved are getting dusted off and moving forward. As in-person attendance is now exceeding prepandemic levels for many growing churches, the need to expand or add sites is reaching levels that require action.  

When our clients revisit their plans, they’re finding that costs have risen considerably. The recent tariffs could further raise material costs, especially for steel, lumber, and audio, video and lighting (AVL) components. The complexity of navigating tariff realities could also cause supply chain disruptions and lengthen project timelines.  

Organizations considering construction or renovation projects can explore the following: 

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  Consider completing projects in phases to prioritize the more manageable pieces of the larger plan. 

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  Explore adaptive reuse of existing structures. Some churches are finding that converting an existing big box retailer or warehouse can be half the cost of ground-up construction. 

While the competition for talent has always been a challenge for faith-based nonprofits competing with for-profit businesses, we’re seeing increasing competition not just based on wages but also perks, benefits and work environment flexibility. And just as tariffs can affect your organization’s bottom line, they can also have an impact on your employee’s finances. In this type of environment, workers are increasingly looking to maximize their earnings potential, which could further squeeze a tight labor market for the best talent.  

While increasing salaries may not be an option, organizations can offer perks such as flexible work arrangements to be more competitive. 

This is perhaps the most concerning variable. As your donors’ costs rise, they may have less discretionary income, which could impact their ability to give. Many churches may not experience a significant decline immediately, but studies show that negative GDP trends can impact charitable giving.² Donations are also sensitive to movements in the S&P 500 index. Given the recent market downturn, that could be another cause for concern for ministries that had been budgeting for an increase in year-over-year giving.  

In response, organizations can communicate clearly and often the positive impact of their donations on facilities, programs and the community.   

Be proactive with your finances 

With all this to consider, where does that leave the nonprofit leader trying to adjust to the shifting economic sands?  

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  Consider increasing the frequency of your budget review. In stable times, a semiannual review may suffice. In an uncertain environment like the current one, organizations should conduct reviews quarterly or even monthly depending on conditions.  

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  Pay particular attention to the costs you can control. If you accept online donations, for example, you may be able to reduce the merchant services fees you pay to process those transactions. It’s a way to cut costs without impacting services. 

Religious institutions have always been sources of refuge in difficult times. In times of financial precarity, a well-run organization can set a positive example for both their peers and their parishioners in how to remain steadfast in the face of uncertainty.  

^{1 Federal Reserve Issues FOMC Statement -- May 7, 2025} 

^{2 Economics Observatory: "What happens to charitable giving in a recession?"}