Congregations must reimagine ministries, repurpose facilities and reinvent donor appeals if churches are to survive the ravages of the COVID-19 pandemic and the continuing decline of religion in the 21st century.
That was the advice offered by two panelists in a recent episode of “Cultivating Generosity,” an ongoing web series presented by the Center for Healthy Churches.
The session, moderated by CHC Director Bill Wilson, introduced the “big picture” on giving trends, church financial health and the missional innovations that are helping many congregations face significant health and cultural challenges.
Panelist David King provided statistics illustrating the revenue hurdles churches face today and in the future. He was joined by Paul Grier, who presented creative approaches for faith-based groups to maximize giving in difficult times.
The challenges congregations face are serious, said King, director of the Lake Institute on Faith and Giving and associate professor of philanthropic studies with the Indiana University Lilly Family School of Philanthropy.
“The headline really is that the number of Americans who give anything continues to decline. Under half of all Americans for the first time in our history are givers. It was 66% in 2000,” he said in the first installment of the four-part series that continues Aug. 12 and 19.
King cited a newly released Giving USA study that found charitable contributions increased by more than 5% in the past year, including a 17% increase in giving by foundations and a 2% increase in individual giving. Yet congregations didn’t fare well, statistically.
“Religious giving continues to hold steady or loses just a bit of ground in its overall market share. This year it declined to 28% of all giving. That still by far remains the largest percentage of all giving, but it was 50% in the late 1980s, so that’s a tremendous slide,” King said.
“Overall, you’re dealing with a declining number of possible donors engaged with your work.”
A separate study by the Indiana University Lilly Family School of Philanthropy also found that, as of 2018, “an even smaller percentage of Americans give to religious causes. It was 46% in 2000, now it’s down to 29% in 2018,” he said.
The reasons are numerous, but include declining religious affiliation, dwindling attendance and membership and an aging population. “About 30% of Americans in a given year give to a congregation. Overall, you’re dealing with a declining number of possible donors engaged with your work,” King said.
Lake Institute research found that 2020 was not as financially traumatic as expected for churches that found ways to stay in the black or break even through receiving gifts during the pandemic and by participation in the federal Paycheck Protection Program, he said.
But those financially thriving churches tended to be larger in size, he said. “There was a division between the haves and the have-nots, so many congregations really did struggle. Smaller congregations — congregations that did not have the digital technology in place, the capacity to transition quickly — saw a very difficult ending to the year.”
“There was a division between the haves and the have-nots, so many congregations really did struggle.”
The study also uncovered differences in attitude that can affect congregational health in the pandemic and afterward. About a third of pastors surveyed said they wanted to see a return to normalcy after the pandemic while “over half talked about some sort of meaningful change, whether it’s a reset, some type of growth or innovation. Despite these challenges they were facing, they were really hoping for something new,” King said.
Many pastors reported a refocusing on purpose and mission and a deeper commitment to local communities, including through increased outreach.
“Many of those congregations are more aware of these needs than they were a few years ago, even as they were remote,” he said. “I think the headline that we’re seeing, big picture, is that many congregations are ready to focus on repurposing some of those existing resources to produce a new normal or even a new streamlined version of themselves.”
Churches will find that engaging in core missions and neighborhood outreach can translate into higher giving, said Grier, vice president of Project Regeneration at the Presbyterian Foundation.
“We are seeing that churches are beginning to have a new interest in who their neighbors really are – not just the biblical terminology of neighbors, but the people who actually live next door to church campuses,” he said. “And that can have a very positive impact on donor reaction and behavior.”
Results also are positive when churches customize donor communication strategies based on demographics, giving patterns and generosity history. Donors in their 20s might be approached in different formats and messaging than those in their 80s or 90s, he said.
“We don’t know yet whether our new virtual worshipers will become donors, and it’s probably too early to tell. We know that a lot of our existing members that are now virtual members or virtual participants have chosen to give electronically.”
But a lot of churches have yet to adjust to the virtual environment for worship or fellowship, Grier said. Usually, these are the same congregations that have not embraced online forms of giving and pledging.
“We see a lot of churches in danger because they have too few donors who make up too large a percentage of their church giving and too few donors who are not in the 90s and better.”
And some churches that have moved into virtual spaces remain reluctant to ask online participants for contributions. Meanwhile, far too many congregations are relying on donations from fewer, mostly older, members.
“We see a lot of churches in danger because they have too few donors who make up too large a percentage of their church giving and too few donors who are not in the 90s and better,” Grier said.
He encouraged churches to consider alternative revenue streams, such as day care, preschools or renting out their parking lots. “There is a lot of homework involved, but there can be significant impacts and results.”
The relevance and expense of church buildings also should be studied. “We have many cathedral-size facilities that hold family-size congregations,” Grier said of the Presbyterian Church USA.
And church size is a significant factor in survival, Grier added, explaining that larger Protestant churches are statistically more likely to grow financially and numerically.
The PCUSA is emblematic of the trend with just under 9,000 congregations in the U.S. and Puerto Rico, with an average membership of 140 and 51 worshipers on Sundays.
That makes for a severely uneven distribution of church members into a relatively small number of larger congregations, both in the PCUSA and in other churches as well, he said. “Half our members are in 11% of our congregations” while “50% of church-going Protestants attend 7% of churches.”
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