While nearly half of all churches have reported a decrease in tithes and offerings, many have still increased their budgets this year, a new survey shows.
Forty percent of surveyed church leaders said current economic conditions have resulted in a drop in weekly giving by two percent or more, according to Your Church magazine's Budget Priorities Survey.
Despite the losses, more than one-third of respondents said they expect their current church budget to increase by at least two percent. Just nearly a quarter of church leaders said their church budget will shrink. Nearly one-third of the respondents expect their current church budget to stay about the same.
Your Church magazine, part of the evangelical Christianity Today International media ministry, surveyed and interviewed more than 1,100 "active Christians" – those who believe salvation is through Jesus Christ and read the Bible regularly and most of whom are in leadership roles – early this year to learn church budgeting priorities, identify sources of church income, and assess the influence of current economic conditions on churches.
The average worship attendance in respondents' churches is 580. Notably, however, 47 percent of those surveyed are from churches with less than 200 people in average attendance.
Survey results show that tithes and offerings are the principal source of income for churches, comprising 87 percent of church budgets. Thirty-three percent of churches said tithes and offerings are their only sources of income. Other much smaller sources of income include investments, special campaigns (such as capital fundraising) and ancillary programs/ministries (such as bookstores, daycare center, and school).
"Historically, evangelical Protestant churches tend to be tithe-driven," says Ed Stetzer, president of Lifeway Research, told Your Church magazine. "Effects of unemployment tend to lag a bit for churches that emphasize tithing, but as the unemployment rate continues to increase, more congregations will get hit financially. Churches need to be ready for this impact."
The economic downturn has forced churches to consider various options, such as salary freezes, for tighter budgets. The survey found that churches were more likely to consider such options than actually experience them despite losses in giving.
More than a quarter (27 percent) said they considered salary freezes but only 20 percent ended up actually freezing salaries as a result of current economic conditions. Nearly one in five said they considered hiring freezes but only 14 percent went ahead with it. Moreover, 14 percent considered pay cuts but only 7 percent actually experienced it.
The current church operating budget for one-fourth of respondents' churches is less than $200,000. Fourteen percent of churches have an operating budget of $1 million or more.
The largest expense in church operating budgets is salaries and wages, which make up 38 percent of the budget. At a distant second is the church building which comprises 12 percent of a church's budget. The remaining 50 percent is almost evenly distributed among other expenses which include utilities, ministries and support, insurance, maintenance, denominational contributions, and mission support.