Research: Recession Catches Up to America's Churches

Methodology: The LifeWay Research telephone survey was conducted among Protestant pastors Oct. 7-14, 2010. Churches were selected randomly and each interview was conducted with the church’s senior pastor, minister or priest. Responses were weighted to reflect the geographic distribution of Protestant churches. The sample of 1,000 provides 95 percent confidence that the sampling error does not exceed ±3.2 percent for the total sample. Margins of error are higher in subgroups. Comparisons are also made to the following telephone surveys, conducted using the same methodology: February 2-10, 2009, among 1,000 pastors; Nov. 5-12, 2009, among 1,002 pastors; and March 1-9, 2010, among 1,000 pastors.

NASHVILLE, Tenn. — The National Bureau of Economic Research (NBER) declared in September that the recession that began in December 2007 ended in June 2009.

According to a recent LifeWay Research study, pastors of Protestant churches might disagree. After feeling moderate impact for two years, for the first time offering dollars have reportedly declined, and now 79 percent say the economy is impacting their church negatively.

Data gathered Oct. 7-14 by LifeWay Research reveals that 2010 is on course to be the third straight year with an increased number of churches receiving lower offerings than the prior year. Thirty-four percent of churches report receiving less offering this year than in 2009, as compared to 23 percent in 2009 that received less than in 2008, and 19 percent in 2008 that received less than in 2007.

"It’s hard to explain in financial terms how churches have done as well as they have the last three years," said Scott McConnell, director of LifeWay Research. "Churches actually saw average offerings rise 3 percent in 2009, but the recession – though officially over mid last year – has finally taken its toll on churches in 2010."

In the October telephone survey, churches reported average 2010 offerings of 3 percent less than their 2009 offerings, though the median amount hasn’t changed.  A large minority of churches (42 percent) report offerings that are the same as those of 2009.

Twenty-one percent report 2010 offerings to be at least 10 percent below last year’s giving and 19 percent of churches report that the 2010 offering is above what it was in 2009 by at least 1 percent. The smallest churches, those with less than 49 people in average worship attendance, are least likely to have experienced growth in offerings over 2009.

"Six in 10 churches have at least remained at their 2009 giving levels," McConnell pointed out. "But the small number of churches with growth in their offerings in 2010 is striking."

McConnell explained that key elements such as flat Social Security benefits as well as sustained high unemployment leading to long-term decreases in consumer income are now, likely more than ever, impacting churches even as the economic news has grown more positive.

"Because many members give in direct proportion to their income, Protestant churches may be more impacted by unemployment and Social Security than the Stock Market," he said. "Until unemployment turns around, Protestant churches may continue to struggle financially."

Two-thirds of pastors now say the economy has "Somewhat negatively" impacted their churches and 13 percent say it has "Very negatively" impacted it. These numbers represent the highest level of negativity expressed out of the four occasions – February 2009, November 2009, March 2010 and October 2010 – LifeWay Research has asked pastors, "How is the current economy impacting your church?"

Encouraging trends

In the midst of this less-than-encouraging financial data, LifeWay Research did uncover some heartening trends.

Forty-nine percent of churches report that in comparison to recent years, volunteering in the community has increased in the past year. And in spite of the overall lower offerings, 47 percent of churches have increased spending from the church budget to help the needy.

"Scarcity brings clarity. Economic realities call for churches to be cautious with their spending," McConnell said, noting that more than half of churches (54 percent) have frozen staff salaries in response to the economy. "Still, there are clear indicators that churches can simultaneously take bold steps forward in serving their communities. Even while limiting spending, 35 percent of churches have explored launching a new ministry to help disadvantaged individuals, and 25 percent have gone ahead and launched one."

While the increased community service and spending on ministries to the disadvantaged is encouraging, other data reveal that churches are simply confirming the idea that "necessity breeds invention."

In 2010, more than two-thirds of churches report receiving increased requests for financial assistance from individuals outside the congregation, and 46 percent report increased requests from those within the congregation.

"Our studies at LifeWay Research have shown that churches quickly responded at the beginning of the recession to address emerging needs in their communities," McConnell explained. "Now, as a third of all churches are directly dealing with declines in giving themselves, they have actually made their community service more permanent by building spending into their budget and launching new ministries to meet needs."

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