The coming church budget crunch

This is a revised version of a post from last year. I thought it appropriate as churches are beginning to budget for 2014.budget squeeze

I just asked a friend to run a quick analysis for me: “How much of your church’s contributions come from people age 55 and over?”

His number was 70%.

My friend was unflinching. “Isn’t it always that way? That’s the group that has the most to give, so they give most of the money.” His church looks healthy. The UMC would consider it a “vital congregation.”

But I wasn’t convinced, so I asked him to try a second analysis, if his software could do it. “How much of your church’s contributions 10 years ago came from people age 55 and over?”

This time, my friend came back concerned. Ten years ago, only 50% of contributions came from ages 55 and over. In ten years, giving from people age 55 and over went from 50% to 70%.

A few reasons I had this hunch:

  • If your church is at least 10 years old, it’s probably older now than it was 10 years ago. You may have anecdotal evidence to argue otherwise (that booming parents’ Sunday School class, the three infant baptisms last week…), but unless you can show me the numbers to prove it, I bet you’re older. The average age in the American UMC has gone from 30 in the 1950’s to 57 in 2008.
  • Most churches – even ones that look healthy – have been living off the leadership and giving of the Baby Boomers for a long time. The Baby Boomers are now ages 48 – 66.
  • The Older Boomers (those who were draft age during Vietnam) are all now 56 and older. They’ve been stronger leaders and contributors than the Younger Boomers.
  • The Silent Generation (whose youngest are now 67) were loyalists, committed to the Church, and committed to supporting it with their money.

This shows a fundamental non-shift taking place in our churches. As the Boomers and Silent Generation age, the younger generations aren’t shifting to handle more of the church’s financial burden. There are no signs they plan to fill that void.

We’re living off the fumes of earlier periods’ growth. Meanwhile, we have increased our debt, enlarged our campuses (and their accompanying maintenance and utilities costs), and inflated our staffs and salaries.

If giving from ages 55+ went from half of a church’s giving to 70% in the last ten years, what will happen in the next ten? Unless we experience major change, we’ll see a lot of budget reductions.

What I expect in the next ten years… Since we can’t reduce debt and building maintenance costs without serious consequences, the coming budget crunch will hit staffing, programming, and missions the hardest.

In the UMC, I expect many churches will cut their apportionment payments as they try to preserve ministry locally. Politics will ensue. I would be especially concerned if I were a Wesley Foundation or camp that still relies on money from the conference. Look at your recent conference budgets — what’s going up (e.g. directors’ salaries) will plateau, what’s already going down or plateaued will be decreased or eliminated.

I don’t write this to scare, but I do write it as a wake-up call. Most churches and conferences budget as if giving is going to increase in the next decade. They give raises, take on debt, and defer maintenance because they assume they’ll have enough money in the future to support these items. You might want to do more research before making those assumptions. Budgeting on hope and faith sounds nice, but plenty of churches have had to close after they spent their money on hope/faith rather than reality. Some of those churches even hosted Dave Ramsey courses…

16 thoughts on “The coming church budget crunch

  1. I’ve had some conversations with friends, of our age, about giving to the church. One of the issues that came up was a lack of accountability and transparency. There was a hesitation to give where there were, in this person’s opinion, issues in church spending (too much money spent on the leadership and not enough on missions). This adds to the situation.

    But, at the same time, we have not done a good job in bringing the younger generation into leadership positions and allowing them to take “ownership” of the local church, through their prayers, giving, and acts of service. This hurts as well. It is a situation we are all facing.

    1. Shannon, one problem with your friends’ arguments is that we can always find reasons not to be faithful, especially if we start from the attitude that it is “our” money and the church has to earn the right to ask us for it.

      1. I agree. I only offered that discussion as a way of illustration. This person is not the only one who holds this position. Many in the church – young or old – see their money as a resource and in order to give some of it away there must be some exchanging of goods, whether it is in programs, worship that I “enjoy, ” or other personal issues. We have failed an entire generation (or two) by not teaching what it means to be stewards of God’s resources.

      2. John and Shannon,

        I agree with both of you. These are some of the reasons being given – and we shouldn’t just accept them without offering a challenge back. A further question, though: Is the local church entitled to someone’s charitable donations? If so, how much? If we demand a tithe to the local church, and anything “above and beyond” can go elsewhere, I think we run into a lot of problems.

  2. So true! The one way I can help now is to begin teaching my children the importance of giving, and of course lead them by example.

  3. Perceptive insights, Teddy! Add to that, Barna’s latest research shows giving to churches and non-profits down in recent years due to the recessed economy. A challenge to the committed to inspire others by example. Not a Methodist, but deeply ingrained in the life of the church and Christian community.

  4. 1995 was the last good year for the church, maybe? 🙂 And people were sounding the alarm then! If you know that older folks are your best givers (and there’s a lot of why that just makes sense), the problem comes when you look at who will be your best givers in 10-15 years. They are not in church. I don’t think this is scary. Its reality. It will, in some places, make the church more effective. We will lose our “influence” at an alarming rate, but if we are faithful, the Kingdom just might grow.

  5. Teddy, I’m uncomfortable with the word “demand” when it comes offerings.

    Faithful stewardship teaches (whether anyone listens) that all that we have and all that we are is God’s, and it should be used in accordance with his will. That does not mean handing it over to the church, but it does mean every dollar we spend is making use of God’s property (to use another awkward word) and should be done in that light.

    1. Thanks for posting this paper, Josh. That article used to be free online. A few years ago, I read it and distributed it to several people. It does a great job of bringing the early Fathers into the discussion. It’s surprising to realize how many of our concepts and teachings regarding money and the church are relatively new (i.e. a few hundred years).

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