It’s that time of year again when religious institutions begin preparing their 2026 budgets. But this year brings new uncertainties, primarily from the impact of tariffs, while regional and denominational differences are more pronounced than in recent years. Let’s take a look at some of the factors that could impact your budget forecasts. 

Institutions considering major capital expansion or improvement projects will find costs rising higher than inflation. For example, if you priced out the cost of replacing your HVAC system last year as part of your long-term budgeting, you can expect that figure to be even higher as tariffs are making building materials more expensive. 

We’re in a situation in which how confident you are about forecasting for 2026 may largely depend on your location and your denomination. On the plus side, participation is booming in areas with growing populations, such as Florida, and we’re seeing many churches proceed with large construction projects. Major urban centers, on the other hand, are still struggling to return to pre-pandemic levels of participation. For these regions, expansion isn’t on the radar; it’s more a matter of how to cut back without negatively impacting the services they provide to their congregants. 

The topic of donor contributions is also nuanced. Overall, giving is relatively flat compared to last year. Some donors are taking a cautious approach as they await the full impact of tariffs and interest rate policy. On the flip side, the strength of the stock market is helping boost participation on the top end of the donor market. Following budgeting management fundamentals (see below) can help you manage this situation. 

Based on discussions with our clients, there’s been an uptick in fraud attempts against religious institutions. That’s why it’s a good time to make sure you’re working with your bank on fraud prevention measures, including tools such as positive pay and account validation. It only takes one fraud event to wreak havoc on your finances and, therefore, your budgeting plans.  

Every year brings new challenges and opportunities. As always, it’s important to stick to budget management fundamentals, including:  

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  Managing interest rate costs  

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  Budgeting for higher wages  

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  Preparing for unanticipated expenses 

The uncertainties religious institutions are facing right now are different from the ones they faced last year. But with proper planning, you’ll put your organization in a better position to navigate these challenges from a position of strength.