Congregations see drop in giving, face budget cuts

Congregations see drop in giving, face budget cuts

With COVID-19 having dealt a blow to the U.S. economy, 41 percent of religious congregations in the United States saw a decline in donations in the spring, a report from the Indiana University Lilly Family School of Philanthropy and the Lake Institute on Faith & Giving finds.

Based on a survey of more than five hundred and fifty congregational leaders conducted in July, the COVID-19 Congregational Study (9 pages, PDF) found that donations to congregations from February to June fell 4.4 percent on average on a year-over-year basis, ranging from a 9.5 percent drop in March to a 4.5 percent increase in May. Among Christian congregations, 61 percent of Catholic parishes reported a drop in giving, compared with 41 percent of evangelical groups and about 35 percent of mainline Protestant congregations. According to the report, congregations with established online giving options and a higher percentage of online donors fared better after in-person services were suspended than those without such options, while the smallest congregations — fewer than fifty parishioners participating weekly — were least likely to have online giving options and more likely to struggle to maintain donation levels.

The survey also found that 66 percent of respondents' organizations had applied for a federal Paycheck Protection Program loan, 38 percent had cut back on their reduced non-personnel administrative expenses, 30 percent had provided support to other congregations or nonprofits, and 22 percent had created a special fund in support of their members' financial needs. Looking ahead to next year, 52 percent of congregations expect their annual budget to remain about the same, while the rest expect they'll have to make cuts — of between 5 percent and 10 percent on average — and none expect to increase their budget, with evangelical congregations (61 percent) more likely than mainline Protestant (50 percent) or Catholic (41 percent) congregations to say there would be no change in their budgets. Asked what measure they would take if revenue declines persisted into 2021, congregations were most likely to say they would establish new fundraising goals (37 percent), cut non-personnel administrative expenses (36 percent), draw down reserves or their endowment (35 percent), or lay off or furlough staff (19 percent).

"Most congregations stopped in-person religious services in mid-March, quickly shifting online, and they've had to navigate uncertainty in multiple aspects of congregational life and operations ever since," said David P. King, the Karen Lake Buttrey Director of the Lake Institute. "As congregations consider when and how to reopen while planning for their financial futures, they are asking themselves important questions about what comes next."