April 21, 2011

The 2008 recession extended a decade-long erosion of the financial health of American congregations, with just 14 percent of the 11,077 randomly sampled congregations saying in 2010 that their financial health is excellent.

Of those who characterize their financial health as declining between 2005 and 2010, a full 80 percent reported a negative impact from the recession.

And the recession affected just about every kind of congregation equally.

These are among the conclusions drawn from the new Faith Communities Today 2010 survey of American congregations, at http://faithcommunitiestoday.org/fact-2010.

The Cooperative Congregational Studies Partnership (CCSP) conducted the FACT 2010 survey and analyzed responses from a variety of faith traditions in the United States. The survey updates results from surveys taken in 2000, 2005, and 2008 and is the latest in CCSP's series of trend-tracking national surveys of U.S. congregations.

David A. Roozen, Director of the Cooperative Congregational Studies Partnership and Professor of Religion and Society at Hartford Seminary, said that, "Although the downward trend [in financial health] has been relatively constant, there is no doubt that the recession at least temporarily set back any hope of recovery."

Still, he said, "To the extent that there is good news in the FACT 2010 findings regarding the impact of the recession, it is that one in ten congregations reported that they had already begun to recover from an initial recession-driven dip in income."

"The worst of the recession's impact on American congregations may be over," he said.

According to Marjorie Royle, UCC researcher with the FACT team, it seems less vital congregations – those that were declining before the recession – may have already used their reserves. When the recession hit, they were less able to bounce back than more vital ones.

Since the period of the 2008 recession 60 percent of UCC congregations surveyed said their congregational income "declined a lot or a little," 10 percent said they "declined then rebounded," and 30 percent reported "no change or growth."

Commenting on their current financial health 29 percent of polled UCC congregations said they had "some / serious difficulty," 46 percent said times were "tight," and 25 percent reported "good or excellent" financial health. Of all faith traditions polled, the UCC's 25 percent "good or excellent" rating was the lowest, with the exception of Reform and Conservative Judaism which both reported 17 percent "good or excellent" financial health.

The FACT report, entitled "Holy Toll: The Impact of the 2008 Recession on American Congregations," (online at http://faithcommunitiestoday.org/sites/faithcommunitiestoday.org/files/HolyTollReport.pdf) examines the program, human and organizational toll of the recession.

Among the findings under the program toll:

The most frequently employed mechanism when a congregation encounters financial distress is digging into savings and investments, followed closely by salary freezes or personnel reductions and postponed capital projects.

A common fear is that mission and benevolence spending will be the first thing cut but this is not the case.

"The good news for advocates of congregational outreach," Roozen said, "is that FACT 2010 shows virtually no difference between congregations negatively impacted by the recession and congregations spared the recession's financial toll in the likelihood of offering outreach services. Mission remains a priority even in times of financial distress."

"The absence of recession impact on either outreach or member-oriented programming resonates with the observation of one commentator who noted that American congregations are ‘putting off rather than pruning,'" Roozen said.

He also noted that while the program toll of the 2008 recession appears to have been minimal, the same can't be said for the human toll.

Nine percent of congregations reported staff layoffs or furloughs because of the recession, and just over 25 percent reported salary freezes or reductions. Assuming an estimate of 350,000 congregations in the United States, employing an estimated 1.5 million staff, that equates to more than 500,000 people who lost their jobs or had their salaries reduced.

In addition, 41 percent of congregations reported that the recession had a major or moderate impact on unemployment among members. And half the congregations for which the recession had a major impact on the unemployment of their members saw a major decline in congregational income.

This stark impact led to an increase in requests for cash assistance, pastoral counseling, and emergency housing. Nearly half of all congregations experienced an increase in requests for cash assistance, underscoring the importance of American congregations as a social safety net.

"It may well be that the organizational toll of the recession on America's congregations turns out to be the most significant in the long term," Roozen said.

The negative impact of the recession on congregations that had declines in income is especially dramatic for worship attendance growth, spiritual vitality, and volunteers. It also led to increased levels of conflict.

The report was written by Roozen, director of Hartford Seminary's Institute for Religion Research.

United Church of Christ News Service