A recent survey of more than 1,500 mostly Protestant congregations found that the first half of 2009 was more financially challenging for churches than 2008, but the leaders of the organizations involved in the research also find cause for hope—and even celebration—in the survey results.

The 2009 Congregational Economic Impact Study,¹ a joint project of the Lake Institute on Faith & Giving at the Center on Philanthropy at Indiana University and the Alban Institute, had three primary objectives:

• to examine the financial impact of the recession on congregations
• to learn what congregations are doing to help their members and communities cope with the economic downturn
• to find out which types of congregations are faring best in the recession

Alban Institute members constituted the vast majority of the 1540 survey respondents, and nearly three-fourths of the survey participants are from Protestant denominations.

While not a representative sample of U.S. congregations, the researchers believe the responses of the congregations in the survey are “suggestive of the response of a typical Protestant congregation to the economy.”

“While the media has frequently focused on the recession’s impact on megachurches like Saddleback and larger churches like the National Cathedral, there is a silence that has wrapped itself around the experience of smaller and medium-sized churches,” said William G. Enright, executive director of the Lake Institute on Faith & Giving. “I think this report with a broader brush describes the impact of the economy on these churches and paints a more realistic picture of how the nation’s churches are being affected.”

Fundraising Changes

The survey began by examining congregations’ financial status in the first half of 2009 compared to 2008. Overall, more congregations reported that fundraising receipts increased in the first half of 2009 compared to 2008 than reported a decrease. However, whereas 49.4 percent of congregations reported an increase in giving in 2008 compared to 2007, only 37 percent reported an increase in giving during the first half of 2009 compared to 2008. Another 34 percent reported that their fundraising receipts had stayed the same between 2008 and 2009. Nearly 30 percent of the responding congregations said they had experienced a decrease in giving in 2009 compared to 2008, up from 21.3 percent who had experienced a decrease in 2008 compared to 2007.

Almost 36 percent of the congregations tried new fundraising approaches, such as musical festivals, church fairs, and applying for grants. Another 19 percent put greater emphasis on financial stewardship, and almost 10 percent expanded their outreach to the community as a means to improve fundraising success, trying initiatives such as increasing space use by outside groups and adding programs for nonmembers. Nearly 40 percent reported that they discussed charitable giving more in 2009 than in 2008.

One especially hopeful note, Enright said, was found in the distribution of givers. “While in most congregations there were people who increased their giving and people who decreased their giving, the number increasing their pledges was greater than the number decreasing their pledges.”

Budget Cuts

While 41.7 percent of congregations indicated that their budgets had increased in 2009 compared to 2008 and another 24.3 percent said their budgets had remained the same, approximately one-third of the churches surveyed (34 percent) reported making budget cuts in the first six months of 2009. Of these churches, nearly 16 percent froze staff salaries, almost 15 percent reduced utility costs, and more than 13 percent reduced their program costs. Only 6.8 percent cut their full-time staff positions, and 10.7 percent laid off part-time staff.

“I was really impressed that where budget cuts were made the congregations focused on salaries, utilities, and internal programming first,” said Enright. “The last things they wanted to touch were mission and their outreach to the community.” Only 3.1 percent of the churches reported cutting their outreach programs in 2009.

Serving the Community

Congregations responded to the recession in a wide variety of ways, both traditional and nontraditional. Since the beginning of 2008, 27.7 percent have begun offering classes on personal finance or giving. Some have also offered job fairs, job banks, computer training, or support groups for the unemployed or those in career transition.

A significant number of congregations reported offering help to the community in the form of donated food and clothing or home repairs. Many have increased their outreach to the homeless or adopted a needy family, and others report partnering with or contributing to local food banks or shelters, or national organizations such as Meals on Wheels and Habitat for Humanity. Some are also making their building space available to local nonprofit organizations.

Others have begun offering educational events, such as a free day camp for children reading below grade level or an affordable preschool.

A few congregations responded with medical treatment for the community through such means as well child clinics, a mobile dental van, a free health fair, and rides to medical appointments.

Other creative responses included offering a free family fun night, tutoring and mentoring the children of the working poor from the local community, investigating what it would take to start a community credit union as an alternative to predatory lending, providing emergency gas cards, offering camp scholarships, increasing the number of 12-step meetings offered through the church, and providing free “date night” child care.

The churches also reported offering their support for congregants and the community in the form of prayer. “We opened the church at lunchtimes for prayer,” said one respondent. “We have increased listening/praying time with people who stop by,” said another.

All of these responses, said Enright, “underscore the resiliency of the American congregation, and the unselfish and creative ways these faith communities have responded to the recession.”

“The survey results demonstrate that local congregations are much more dynamic, creative, and strong than many people think,” added James P. Wind, president of the Alban Institute. “Clearly some are struggling to make ends meet, but many more are holding their own and growing during one of the toughest seasons in our national history. More than that, the survey reveals the great variety of ways they are ministering to an overextended nation.”

Who Fared Best

The recession has not affected all churches equally. Weekly attendance, regional location, congregants’ average age and income, and the degree of reliance on endowments are all factors in how well churches have fared.

Changes in weekly attendance were particularly telling. As the researchers note in their report, “Those congregations that reported a decrease in their weekly attendance over the past five years were statistically significantly less likely to report an increase in fundraising for 2008 and 2009, an increase in 2009 pledged giving, or an increase in their 2009 budget when compared to congregations that reported their attendance has stayed the same over the past five years. This is true even after controlling for differences in revenue, denomination, and average income of congregants, as well as other factors.”

“There is a clear correlation between church attendance and religious giving,” commented Enright. “Where attendance was down, churches were less likely to report an increase in giving, and where it was up they were more likely to report increased giving.”

Dependence on an endowment was also an important predictor of the impact of the
recession on churches’ budgets. Congregations with an endowment were significantly less likely to report that budgets increased in 2009 than were other churches.

The survey also confirmed that the age of congregants is a significant factor in whether or not churches were likely to report increases or decreases in giving. “In this study, where the average age of members was under 50 churches were more likely to report an increase in giving during the first half of 2009 than in 2008,” Enright said. “The churches least likely to report an increase in giving were those where the average age of congregants was over 61.”

Other Findings

“The study also validates what previous research has disclosed about what influences giving and that people of faith tend to be among the most generous givers,” said Enright, citing statistics from Giving USA 2009: The Annual Report on Philanthropy for the Year 2008,² which indicated that in 2008 religious giving showed the largest increase in giving over 2007 when compared to other subsectors of charitable giving. According to that report, 35 percent of the $307.7 billion given to U.S. charities in 2008 went to religious organizations, more than any two other categories combined.

“Most charitable dollars from household giving go to religion,” Enright said. “This suggests that if my income is less and I am having to reexamine my charitable giving, the last thing I may cut is my contribution to my local congregation.”

“I found a lot of hope in these findings,” said Enright. “For one thing, the recession has allowed congregations to talk about something they don’t like to talk about—money—and they are talking about it more openly and frequently now. Only good can come from that.”

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NOTES

1. The 2009 Congregational Economic Impact Study can be found online at http://www.philanthropy.iupui.edu/LakeFamilyInstitute/economyGiving.aspx.
2. Giving USA 2009: The Annual Report on Philanthropy for the Year 2008 is available online at http://givingusa.org.