Churches Face Large Shortfalls

The survey, conducted November 1-5, found that one in five American households had decreased giving to churches and other religious centers. According to The Barna Group, American churches could see revenues dip 4-6% in the final quarter of the year which would translate into a $3-$5 billion shortfall from a year ago.

“Most non-profits and churches count on the fourth quarter of the year to produce at least one-third of their annual income,” said George Barna, directing leader of The Barna Group. “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 survey found that giving cutbacks were most common among lower-income household and those households with “serious financial debt.” Among other non-profits, the cutbacks were more severe. Nearly one-third of all households and nearly half of households with serious debt had reduced giving to other non-profits.

Regarding the economy, most Americans believe it will be two years or more before the economy recovers. One fourth of respondents indicated a belief that the economy would recover within a year. The survey was conducted before the National Board of Economic Research announced that the current recession started in December 2007. A recession lasting beyond May of next year would make the current downturn the longest since the Great Depression.

“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,” Barna 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.”

The Barna Group is a Ventura, California-based market research firm that analyzes cultural trends related to values, beliefs, attitudes and behaviors.