The Shocking Truth of Church Budgets

The auctioneer tried everything he could to increase the bid. But in the end, the pews sold for $25 apiece.

We watched as the contents of this Missouri church emptied out during the auction. The church itself closed a few weeks ago, a victim of declining attendance and daunting fixed costs. Our cameras (for a documentary on the state of the church) caught this church’s last gasps.

This sad scene is becoming increasingly common across the country, as the old financial models no longer work for many churches. The shrinking tithes and offerings can’t cover the two major expenses–personnel and buildings.

The Suspicious Public

I’ve lost count of the number of times that people have told us, “Churches just want your money.” They’ve picked up on the financial pressures facing most churches today. They do understand that ministry requires funding. But they intuitively smell something foul about how many churches’ offerings are being used.

They are accustomed to evaluating the effectiveness of non-profit organizations. They are aware that charities that do the most with donors’ dollars keep their administrative costs relatively low. For example, the American Red Cross spends 8 percent of its revenues on administrative and fundraising expenses. World Vision spends 14 percent. Compassion International spends 16 percent.

Comparatively, what do churches spend on personnel, buildings and administration expenses? Those items consume 82 percent of the average church’s budget, according a study from the Evangelical Christian Credit Union.

You could argue about comparing a church’s expenses to a public charity’s expenses. But the enormous disparity is striking, especially to the public. It’s made worse by looking at how churches allocate funds to direct ministries. According to the ECCU study, chuches use 3 percent of their budget for children’s and youth programs, and 2 percent for adult programs. Local and national benevolence receives 1 percent of the typical church budget.

When you look at it this way, is it any wonder the public questions the church’s return on investment?

Implications for the Future

What does this financial squeeze mean for the future of the church? To right-size personnel costs, churches are increasingly looking to volunteers to carry ministry roles once held by professionals. And the idea of bi-vocational ministers is making a return to the American landscape.

With buildings, churches will be forced to consider becoming better stewards of brick and mortar. More congregations will need to combine under one roof. The Mormons, by the way, figured this out long ago, housing multiple congregations in one building. They simply coordinate their worship and program schedules.

Also, some churches are already succeeding at dispersing their people into small congregations that meet weekly in homes, restaurants, and other free locations. Then all the small congregations meet once a month for a larger worship time–in an economical rented public space.

And, in order for the church to be the church in a more meaningful way, congregations will need to re-prioritize their budgets to emphasize direct forms of ministry that givers will agree directly respond to Jesus’ two Great Commandments.

In the end, all of this financial pressure may just lead to a healthier, true-to-mission church.

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Thom Schultz
Thom Schultz is an eclectic author and the founder of Group Publishing and Lifetree Café. Holy Soup offers innovative approaches to ministry, and challenges the status quo of today’s church.

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