LifeWay Research: Churches not yet enjoying economic rebound

While the U.S. economy shows signs of experiencing a "jobless recovery," the country’s 10 percent unemployment rate is keeping church budgets in a bind, a new study by LifeWay Research found. Yet in spite of the financial difficulty, many churches are launching new ministries to help families in need.

A full 35 percent of the 1,002 Protestant pastors surveyed in November 2009 said giving in their churches was flat compared to the same period in 2008. Another 29 percent said giving was down, including 18 percent who reported a decrease of 10 percent or more.

While the national economy shows signs of improving, churches don’t seem to be recovering yet and, in fact, might actually be doing a bit worse, said Ed Stetzer, director of LifeWay Research.

"It’s not surprising that churches – and their giving – are more impacted by unemployment than, for example, the stock market or GDP [gross domestic product]," Stetzer said. "As unemployment goes up, giving tends to suffer since many churchgoers give proportionally."

More than half the pastors reported higher unemployment in their congregations and almost a fourth said more people have moved away in search of work. Many more churches reported they had frozen staff salaries for 2009 – 47 percent, in contrast to 35 percent as reported in a similar February 2009 survey. Forty percent indicated they had cut back on outsourcing products and services to save money.

Seventy percent of the pastors said they were receiving more requests for financial assistance from people outside the congregation, and 42 percent said their churches had responded by increasing spending on behalf of needy families. Additionally, 44 percent said more church members were involved in volunteer service to their communities.

While 54 percent said their churches felt a greater sense of excitement about opportunities to minister to the needy, 48 percent of the pastors said they sensed greater caution about trying new things that cost money.

On a positive note, one-third of survey respondents said giving in their churches was up, and 62 percent said their congregations were meeting or exceeding their budgets. That number is down, however, from the February 2009 study in which 71 percent of pastors reported meeting or exceeding the budget.

Stetzer hypothesized that the group of churches that report meeting or exceeding their budgets likely includes many who adjusted those budgets downward compared to their previous fiscal years.

"The pastors surveyed clearly indicated that the economy has hurt them and, for many, giving is the same or down from 2008," Stetzer said. "Consequently, they are showing more caution in their budgets and seem to be more hesitant to try new things."

Despite the caution, 24 percent said their churches have launched a new ministry to help people who are disadvantaged.

Among the survey’s other findings:

– 11 percent reduced staff salaries from 2008 levels, 8 percent delayed planned hiring, 5 percent reduced staff insurance benefits, 5 percent laid off one or more employees, and 14 percent delayed large capital expenses.

– 35 percent of the pastors said they had paid more ministry expenses out of their own pockets, 16 percent took voluntary pay cuts, 7 percent added non-ministry jobs for more income, and 7 percent asked their spouses to add a non-ministry job.

– 38 percent of the pastors said they were receiving more requests for assistance from church members, 14 percent said more people in their congregations had lost their homes, and 14 percent said fewer people are volunteering because they are working longer hours.

In many cases, difficult economic times are having the beneficial side effect of enlarging congregations’ vision for helping people in need – both inside and outside the congregation. But the financial pinch is not likely to ease until the unemployment situation improves, Stetzer said.

"The economic downturn is forcing many churches to become more volunteer-driven organizations focused on helping the hurting in times of need," Stetzer said. "But churches have not yet joined the broader economic recovery and, historically, they tend to recover financially when unemployment decreases – and usually after the economy as a whole."

The telephone survey of Protestant pastors was conducted Nov. 5-12, 2009, using a randomly drawn calling list. 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 of 1,002 phone interviews provides 95 percent confidence that the sampling error does not exceed ±3.1 percent. Comparisons were made to a Feb. 2-10, 2009, telephone survey of 1,000 Protestant pastors that was conducted using the same methodology.