James Allen Walker for WORLD

Pain and gain

Money | Overall charitable giving is falling as the economy sputters, but religious giving is up

Issue: "The ABCs of C Street," Aug. 29, 2009

The Christian Worship Center in Alexandria, La., has 1,000 attendees in a town of 50,000, according to Pastor Aaron Hankins, and has remained financially stable amid recession. Hankins says the key for churches in hard times is to "keep a good vision of what they're doing and what the Bible says."

On the opposite end of the spectrum, the United Church of Putney in Putney, Vt., closed on June 14. Reverend Susan Tarolli, pastor for eight years of the church founded in 1772, said in a phone interview that average attendance was 30-35 and the closing was inevitable: "If we scaled back our ministry, if the economy didn't hit our endowment the way it did, then we could have lasted longer. . . . [But] people aren't going to church like they once did and aren't necessarily supporting churches and ministries like they once did."

Those are two out of the 300,000 churches in the United States that in 2008 faced the first decrease in overall U.S. donations in 21 years. The Giving USA Foundation is reporting that American charitable giving was $307.65 billion dollars last year, a 5.7 percent inflation-adjusted decrease from 2007. This is the biggest decrease Giving USA has ever recorded.

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Philanthropic giving generally slows slightly during recessions, according to a 2001 study by Giving USA and the Center on Philanthropy at Indiana University. Since 1975, giving fell an inflation-adjusted 1.3 percent during recession years, while it increased an inflation-adjusted 4.3 percent in non-recession years between 1966 and 2006. But the study also showed last year's religious giving increased an inflation-adjusted 1.6 percent even as overall giving fell.

There's disagreement about how to interpret such data. The Center on Philanthropy's Lake Institute on Faith and Giving argues that recessions have generally had little effect on religious giving. Bill Enright, executive director of the Lake Institute, said even as churches report effects from the recession, "religious giving is up." It may be that those cutting back on philanthropic giving are not cutting back on religious giving, but in other areas of giving.

However, donation statistics for 2008 show decreases mainly in the last quarter, Enright said, so "we are more likely to experience the effects of the recession as the rest of the story unfolds." The nonprofit coalition Independent Sector found in a 2003 study that households in financial difficulty typically cut in half their giving to local churches.

The long-term trend is that a smaller percentage of total contributions in the United States is going to religious groups. Religious giving from the mid-1960s to the mid-1990s was about 45 percent of all giving, according to Giving USA, but that fell to one-third before jumping up in the past year to 35 percent of the pie. The crucial factor for church budgets is how the top 10 percent of religious givers allocate their funds: that top tenth typically provides half of a church's weekly tithes, so if that tenth is experiencing difficulty, the church probably is as well.
-Darin Miller is a freelance writer in Pennsylvania

Giving guidelines

Bill Enright of the Lake Institute says that donors use five criteria in assessing religious charities:

Investment: Donors see their giving as investing, not bailing out.

Accountability: They want to know how the money is used, and they expect progress reports.

Effectiveness: They want the gift to accomplish its goal.

Partnerships: They want to be partners in the process of deciding where the money goes.

Sustainability: They want the recipient to stay in business.


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