Economy could cost churches several billion dollars in donations

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VENTURA, Calif. — The nation's economic tsunami could cost churches and religious centers up to $5 billion in revenue over the fourth quarter, according to a survey from The Barna Group.

The estimate was based on the survey results, which found that 20 percent of American households have decreased their charitable giving, and of those who have cut back their donation earmarks to churches, 33 percent have trimmed their giving by at least 21 percent, while another 22 percent have quit giving altogether.

George Barna, whose company conducted the survey, said he believes churches, which are dependent on strong fourth-quarter giving, will find themselves struggling as they head into 2009.

 "Most non-profits and churches count on the fourth quarter of the year to produce at least one-third of their annual income," the researcher said. "Deficit spending is common during the first three quarters, with the expectation that holiday giving will enable the organization to meet its budget projections.

"This year is likely to be very different. The giving patterns we're witnessing suggest that churches, alone, 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 percent to 6 percent lower than would have been expected without the economic turmoil. We anticipate that other non-profit organizations will be hit even harder."

Specifically, Barna discovered that ofthose who have decreased giving to churches and religious centers, 19 percent dropped their giving by as much as 20 percent, 5 percent decreased their generosity by 21 percent to 49 percent, 17 percent reduced their giving by half, and 11 percent sliced their provision by more than half. In addition, 22 percent said they had stopped their giving altogether.

The survey also found that church cutbacks have been most common among downscale households— individuals are those whose annual household income is less than $20,000 and who have not attended college— (30 percent) and those families that are struggling with "serious financial debt" (43 percent). Not surprisingly, 31 percent of those who have lost 20 percent or more of their retirement fund value have sliced their church donations, as have 29 percent of the people who have lost 20 percent or more of the value in their stock portfolio.

 The most widespread reduction in the amount of money given to religious centers was detected among people under 25 (47 percent who had been affected by the downturn reduced their gifts by more than half of what they usually gave); upscale households—those whose annual household income is $75,000 or more and they have graduated from a four-year college—(48 percent); Hispanics (43 percent); non-born again Christians (40 percent); and sociopolitical moderates (39 percent).


Offering resources
Recognizing the severity of the financial climate, many churches have attempted to help their congregants understand and responsibly address the current economic challenges, the Barna survey found. Among those who attend a Christian church, the survey found that one-third (35 percent) said their church had offered a special talk about the financial situation and ways to respond to it. Such a presentation was more commonly cited by those who attend a Protestant church, (38 percent), than by those who attend a Catholic church (27 percent).

A similar proportion (37 percent) said their church had offered specific opportunities for personal financial counseling. This response was more frequently cited by those who attend a Protestant church (39 percent) than by those who attend a Catholic church (28 percent).

Providing special prayer support for those who were struggling financially was noted by 73 percent of church-goers. Once again, this response was more likely to be identified by Protestants (78 percent) than by Catholics (64 percent).

About half of Christian church attenders (52 percent) said that their church had increased the amount of material assistance made available to congregants during the past three months, such as food, clothing and other basic needs. In this case, there was no difference in the responses of those attending a Catholic church and those going to a Protestant congregation.


Churches cautioned
Even as churches are offering resources to its members, Barna is warning its leaders to exercise restraint in determining church-based budgets and spending policies.

"With a large share of congregants expecting the nation's economic woes to drag on for several years, it would be wise for churches and non-profits to reconfigure their financial models and plan to spend more cautiously over the coming two or three quarters," he said. "Even if a congregation continues to grow numerically, this is not a good time to use dated financial projections and models. People's attitudes about generosity have been altered, as shown by their immediate donation behavior. We anticipate that a greater percentage of church-goers will decrease both their giving levels and frequency over the next year or so. This is a time for church leaders to demonstrate restraint and wisdom in their financial decisions."


Other findings
• Two out of every three families—68 percent—have been noticeably affected by the financial setbacks in America. Nearly one out of every four (22 percent) said they have been impacted in a "major way," almost four out of 10 have been affected "only somewhat," and about one out of every 12 (8 percent) say they have not been affected too much.


• The people least affected have been those under 30 years of age—perhaps because relatively few of them have substantial retirement funds—as well as Asian households and those who describe themselves as mostly conservative on social and political issues.


• Overall, more than one-quarter of adults (28 percent) said they had lost at least 20 percent of the value of their retirement and 401K accounts. The same share of the public (28 percent) said they had lost 20 percent or more of the value of the stocks and bonds that they owned.


• Born-again adults were slightly less likely than were others to have sustained such substantial financial losses in recent months. While 30 percent of the born-again public has lost 20 percent or more of its retirement portfolio value, the same was true for 37 percent of non-born again adults. Similarly, just 31 percent of the born again segment had lost 20 percent or more of the value of their stocks and bonds, compared to 36 percent among the non-born again Christians.


• On average, Americans believe it will take about three years before the economy fully recovers. Only one out of four adults (24 percent) said the economy would completely recover within a year; 30 percent said it would take two or three years; and 32 percent said it would take more than three years. A small proportion (2 percent) said they do not believe the economy will ever completely recover.


• The most pessimistic people are Asians, upscale adults, and sociopolitical liberals. The study also showed that people who voted for Barack Obama are significantly more likely to expect a prolonged period of recovery than are people who voted for John McCain.