Churches Continue to Face Budget Shortfalls

Why are many American churches falling short of reaching their budget goals?
Why are many American churches falling short of reaching their budget goals? (Lightstock )

When it comes to finances, the new normal for American churches seems to be "just getting by."

A third of Protestant senior pastors say their church's giving was under budget in 2015, according to LifeWay Research.

One in 5 saw their finances decline.

Overall, about half of pastors say the economy negatively affected their churches this year.

Scott McConnell, associate director of LifeWay Research, says pastors are still uneasy about their church's finances.

"Wages grew in 2015, and inflation and unemployment remained low," said McConnell. "Yet the financial picture for many churches did not improve."

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LifeWay Research has polled Protestant pastors about their churches and the economy since 2009. During that time, pastors reported the sluggish economy's toll on their churches has lessened.

In October 2010, most pastors (80 percent) said the economy negatively impacted their church. That number dropped to 64 percent in 2012 and then 56 percent by 2014.

The most recent telephone survey of 1,000 Protestant senior pastors found 51 percent said the economy is hurting their church—the lowest total since LifeWay began researching the topic. One in 8 (13 percent) say the economy had a positive effect on their church.

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About 3 in 10 (32 percent) pastors say their church failed to make budget. That's better than 2010 (46 percent), according to LifeWay Research, but not as good as 2012 (22 percent).

In the most recent survey, larger churches fared better than smaller churches. About a third of churches with 100 or more people (32 percent) saw their offerings exceed budget expectations. Among churches of fewer than 100, 1 in 5 (21 percent) had higher than budgeted offerings.

LifeWay Research also asked pastors if offerings at their church increased, remained the same, or declined over the past year.

For the most part, pastors say giving remained steady. Offerings went up in 4 of 10 churches (41 percent). Three in 10 (29 percent) saw no change. One in 5 (21 percent) saw a decline.

Larger churches also fared better in total giving.

About half (51 percent) of churches of more than 100 people saw their offerings go up in 2015. Among churches with less than 100 people, about 1 in 3 (33 percent) had higher offerings in 2015.

LifeWay Research's report echoes the findings of other studies. The "Giving USA" report from the Chronicle of Philanthropy found giving to churches and other religious causes has lagged in recent years. While charitable giving overall increased by 5.4 percent in 2014, according to Giving USA, giving to religious causes like churches grew by less than 1 percent.

Giving to churches and other faith-based causes now makes up about a third (32 percent) of charitable giving in the U.S.—down from 56 percent in the 1980s, according to the Chronicle of Philanthropy.

A recent Faith Communities Today report found the median church budget fell from $150,000 in 2009 to $125,000 in 2014.

McConnell said not all the financial struggles churches face can be blamed on the economy.

"Many factors affect a church's finances," he said. "Pastors are quick to blame the economy when in fact attendance trends, spiritual growth and good stewardship all play a part as well."

Bob Smietana is senior writer for Facts & Trends magazine. For the original article, visit blog.lifeway.com.

Methodology  

The telephone survey of Protestant pastors was conducted Jan. 8-22, 2016. The calling list was a stratified random sample drawn from a list of all Protestant churches. Each interview was conducted with the senior pastor, minister or priest of the church called. Responses were weighted to reflect the geographic distribution of Protestant churches. The completed sample is 1,000 phone interviews. The sample provides 95 percent confidence that the sampling error does not exceed plus or minus 3.1 percent. Margins of error are higher in sub-groups. Comparisons are also made to the following telephone surveys using the same methodology: 1,000 pastors conducted Oct. 7-14, 2010; 1,002 pastors conducted Jan. 17-27, 2011; 1,000 pastors conducted May 23-31, 2012; 1,000 pastors conducted Sept. 11-18, 2014.

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