The Stresses of Uncertainty

As the uncertainty about the worldwide economic future deepens, the stresses of financial worries for congregations and their leaders is entirely predictable.  According to United Methodist Church finance leaders, as is the case in most Protestant denominations, “local church, regional conferences and the general denomination typically receive 40% of their annual income” in the final two months of the year (Newscope, vol. 36, Issue 48, December 3, 2008).  A story in the Boston Globe quotes the Rev. Jim Antal, president of the Massachusetts conference of the United Church of Christ, which is the state’s largest Protestant denomination, who says that for them “Seventy percent of our budget comes in December, so we live by faith, or by hope.”

As downsizing makes household income security more precarious, churches are holding their collective breaths to discover the impact on giving to local congregations, and through them to denominational structures.  According the the UMC’s Newscope, “In addition to concerns about giving trends, significant decreases in the value of church investment funds also are pinching church-wide ministries.  The UMC Foundation … saw its Balanced Fund decrease by more than 23% by the close of October…”

In the words of Patrick Rooney, the interim executive director of the Center on Philanthropy at Indiana University, churches appear to be “heading into uncharted waters.”  Anxiety is high precisely because no one knows for sure what to expect.  The Lake Institute on Faith and Giving at the Center on Philanthropy reports that “a 2003 study by the Independent Sector indicates that households worried about money may decrease their overall giving to religion from 20% to 50%” while their own Panel Study suggests that “donors with incomes under $50,000 may stop giving when their personal economic circumstances worsen.”

Even such venerable institutions as the Washington National Cathedral have been forced to resort to massive staff cuts and budget reductions in order to weather the current economic downturn.  The Washington Window reports that the steps taken by National Cathedral include closing the Cathedral College and outsourcing its retail operations. Since May 2008, 63 Cathedral staff (40% of its workforce) have lost their jobs, and budgets have been slashed from $25.6M to $14M, a drop of 54%. According to Episcopal Life Online, “The cathedral’s endowment, valued at $66 million in the spring, has declined in value by approximately 25 percent.”

According to a recent survey by The Barna Group, nationwide “churches … will receive some $3 billion to $5 billion dollars less than expected during this fourth quarter. The average church can expect to see its revenues dip about 4% to 6% lower than would have been expected without the economic turmoil.”

It is important to remember, however, that congregations are affected differently by the downturn.  Younger church members with smaller investment portfolios may find their jobs more precarious, but also may have far less fluctuation in their net worth. And as Richard Bass, director of publishing at The Alban Institute, has noted that “many of the congregations with which Alban works were not suddenly thrust by recent events from a position of certainty to one of uncertainty. Many have been dealing with uncertainty for some time.”  As a result, while endowed parishes making significant annual drawdowns on their endowment portfolios may feel the pinch in one way, other congregations report that their long-term strategies to deal with a shortage of resources are now in fact paying off, as they are able to continue, rather than initiate in the midst of crisis, the practices of tithing and the habits of personal fiscal-responsibility.