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Fewer cheerful givers: The financial crisis facing U.S. churches

Money may be the root of all kinds of evil, but economists know it is also the resource that makes many good things possible for religious groups.

Cheerful and generous givers enable congregations to do everything from keeping the lights on to being the safety net of last resort for those in desperate need throughout the world.

Yet even as the economy improves from the depths of the recession, several U.S. religious groups are not keeping up financially, according to two new studies.

Per member giving as a percentage of income declined for the fifth time in six years, falling from 2.51 percent in 2007 to 2.17 percent in 2013, reported empty tomb inc., a Champaign, Ill.-based research organization on religious giving.

The only longer period of such decline occurred in the midst of the Great Depression, researchers John and Sylvia Ronsvalle said in their just-released annual report on “The State of Church Giving.”

How bad has it gotten?

The executive summary begins with a warning from the biblical book of Revelation: “I know your deeds; you have a reputation of being alive, but you are dead. Wake up! Strengthen what remains and is about to die.”

A separate study lays out the daunting financial issues challenging the Catholic Church — from changing demographics to church embezzlement and the fallout from the clergy sex abuse scandal.

“The bottom line is that the U.S. Catholic Church is in financial distress on nearly every level,” stated the report written by economics professor Charles Zech for the Villanova University Center for Church Management and Business Ethics.

Been down so long …

Religion is still far and away the most powerful motivator for philanthropy. A national study of religious giving reported that 73 percent of American giving goes to groups with religious ties, from congregations to faith-based organizations meeting social needs.

And a Pew study released this week revealed that Americans affiliated with a religion are as committed as ever, and by some measures are even more devout.

The problem, however, is that there are fewer of them. Eight percent of Americans said they had no religious preference in the 1976 General Social Survey; just under 21 percent reported they were “nones” in 2014.

And those that remain are giving smaller percentages of their income, according to the empty tomb study. The study gathered data from major Protestant groups across the theological spectrum representing a little more than 100,000 of the nation’s estimated 350,000 religious congregations.

After-tax income for Americans rose 137 percent in inflation-adjusted 2009 dollars from 1968 to 2013. But per-member giving increased just 70 percent in inflation-adjusted dollars, the study said.

Those in the greatest need were the most affected, according to the study.

From 1968 to 2013, member giving to church finances as a percentage of income decreased from 2.38 percent to 1.84 percent, a decline of 23 percent.

A much deeper decline was reported in giving for benevolences, or the broader mission of the church ranging from supporting seminaries to feeding the poor.

Per member giving for benevolences dropped nearly in half, from .64 percent of income in 1968 to .33 percent in 2013, empty tomb reported.

Follow the money

The Catholic Church continues to grow with the population, with about a quarter of Americans identifying as Catholic. But a steady decline in Mass attendance means fewer are putting money in the collection plate on Sundays.

The Villanova Center’s Zech’s research reveals several fiscal challenges for the Catholic Church in the U.S., including:

A. The buildings are not where the people are. While parishioners in the Northeast and Midwest have moved to the suburbs, the church has a surplus of aging buildings in the inner cities. At the same time, rapid growth in the South and West require resources for building new parishes and schools.

B. The fallout of the clergy sexual abuse scandal: The scandal has cost U.S. Catholic dioceses nearly $3 billion in settlement costs, attorneys’ fees, and therapy for victims and offenders, the report noted. Beyond that, many Catholics have left, or place less trust in the institution.

C. There are still a lot of buck-a-week Catholics: Catholics give less than 1.2 percent of their income to the church, about half of Protestant giving levels.

D. Who’s watching the money? A study of diocesan finances revealed that 75 percent of U.S. Catholic dioceses had experienced one or more cases of embezzlement in the recent past. Some individuals have stolen more than $1 million.

E. Rising costs: The average Catholic parish building was 61 years old in 2010, which means higher maintenance and energy costs. As the number of priests and religious sisters has declined dramatically, the church has increasingly turned to lay staff with higher salaries and more costly benefit packages.

Looking to the future

The financial issues are daunting, but they are not insurmountable, researchers said.

Zech notes that Pope Francis has taken the lead in calling for better management at every level. And it is not too late for the church in the U.S. to address these issues with greater attention to better stewardship practices.

One immediate step would be for each parish to have a professionally trained business manager or parish administrator. Other research-supported recommendations include establishing diocesan fraud policies and having annual randomly scheduled audits of parishes.

“It’s not rocket science,” he said.

The Ronsvalles state the potential for church giving is enormous.

In one small bright spot in their latest report, per member giving for benevolences increased eight-tenths of a percent from 2012 to 2013. But even that small increase meant the churches they studied had an extra $26 million to spend on issues such as helping children throughout the world make it to adulthood.

That sense of urgency permeating empty tomb’s latest report is reflected on its website, where a number that changes every few seconds documents the number of global children under age 5 who have died in 2015. As this column is being written, the deaths are approaching 5.3 million.

In a world where waves of refugees, debt crises and corruption are challenging the social welfare systems of even many of the most developed countries, religious organizations face their own defining moment.

Their financial health, and whether they spend their money to prop up declining organizations or to revive a spirit of generosity to their neighbors in need, matters more than ever.

Image by Alexander Meseguer [CC BY-NC 2.0], via flickr

Image by Tomas Castelazo [CC BY 3.0], via Wikimedia Commons

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