Congregational Finances

My friend talked for almost 90 minutes. A few times I asked a clarifying question, but mostly I just listened. I met him fifteen years ago, and never before had I heard him speak with the emotional intensity that saturated the conversation in early 2016. When he discerned God’s will in the congregation’s call that he serve as their pastor, he moved his family to a new city. Soon after he arrived, however, he learned that the congregation’s finances were different than he had been told in the interview process. Much of the passion in his words that afternoon, I began to see, came from his concern about how the family’s sudden financial vulnerability might negatively impact his children.

Unfortunately, pastors in many places seem to be facing similar circumstances. I’ve talked with associate pastors who have had to move because of changes in the congregation’s financial standing. I’ve talked with pastors who had to find employment beyond the congregation because the congregation needed to reduce expenditures. I started hearing these types of stories in 2011, but it seems more common today than it was then.

In the past five years, in various ways, I have tried to understand what has happened in hopes of finding something that might hint at an appropriate way forward. I have looked at research in general trends in personal finance. The Time magazine February 22/29, 2016, issue, for example, had an article that reported, “Today’s old are better off than yesterday’s old, while today’s young are worse off than yesterday’s young.”

Maybe that is a factor in generational differences in charitable giving. Numerous studies show that young adults give significantly less than older adults. But this trend did not begin with the Great Recession of 2008. It started with the baby boomers, my generation. When baby boomers were 35 years old, our giving to religious organizations was 20 percent less than what our parents gave when they were 35 (adjusted for inflation). What we see today in generational giving is the continuation of a trajectory started decades ago.

Data like this suggest that systemic economic issues are factors in the financial challenges congregations face today.

Economic Pressures

In the summer of 2015, a conversation with a friend about financial challenges in his congregation prompted me to go to the Church of the Nazarene Research Center’s website. I found data for my friend’s congregation. I looked at eight other congregations in the same metropolitan area. In this study, on average the congregations received in 2014 just 65 percent of what was received in 2004 (all figures are adjusted for inflation).  Expenditures declined too, but by a smaller percentage. In 2014, these nine congregations spent 70 percent of what they had ten years before. These congregations spent almost 105 percent of their income in 2014 – one congregation spent 136 percent of income – so they seem to be using up reserve funds in these challenging economic times.

I pulled the data for ten congregations in a metropolitan area in a different part of the country. This second group received 62 percent in 2014 of what had been received in 2004. Expenditures were at 65 percent at the end of the decade. The congregations expenditures in 2014 were 105 percent of income for that year.

A Pastoral Response

A pastor can lead the congregation to address the financial concerns. Attention to biblical stewardship is needed to help people act responsibly with all financial decisions. John Dickerson, in The Great Evangelical Recession, asked, “Will we spend the next decade working harder and harder at fundraising—or working harder and harder at disciple making?”

Dickerson also talked about a “dollar-centric deformity of the gospel” that has “led to an assumed dependence on the dollar to fulfill a commission that originally had nothing to do with material wealth.” A pastor may need to lead the congregation toward ministry not overly dependent on a cash outlay.

Further, congregations probably need to give attention to paying off the mortgage on the church facility. Given the trends, Dickerson urged congregations to be debt free within ten years. The elimination of a “fixed” expenditure like a mortgage payment will allow the congregation to be more nimble in difficult economic times.

Some denominations use a worksheet to determine pastoral compensation. All congregations in a conference, for example, will use the same calculations so that all pastors are compensated uniformly. In the Church of the Nazarene, pastoral compensation is the purview of the local congregation. A district assembly may pass an annual report that describes and recommends appropriate pastoral compensation, but it is not binding. Economic pressure on congregations can have a direct impact on the financial stability of the pastoral family.

A pastor must be wise with her or his own finances. Debt must be eliminated. Savings must be prioritized. Net worth, that is, what is owned (assets) minus what is owed (liabilities), is ultimately the key financial figure, not income. Over time, a person should see an increase in net worth as a basic measure of financial stability.

From my perspective, it seems like we will continue to experience profound change in the economics of congregational and pastoral ministry. So far, I have seen nothing that suggests we have bottomed out. The swirling continues and I have found no hand hold to help slow the spinning. More change is coming, I’m afraid. But that does not mean we cannot make adjustments that will lessen the impact.

Originally published by Pensions & Benefits USA.