IU Lilly Family School of Philanthropy

Americans’ declining religious affiliation is only part of what is happening in faith communities, National Study of Congregations’ Economic Practices finds

More U.S. congregations saw increases in participation and giving than experienced declines, a new study from Lake Institute on Faith & Giving at the Indiana University Lilly Family School of Philanthropy at IUPUI finds.

Although fewer Americans are claiming a religious affiliation and the percentage of individuals who are members of a congregation is declining, these findings only tell part of the story. The National Study of Congregations’ Economic Practices focuses on congregations rather than individuals and reveals that while some congregations are declining in size and revenue, many continue to grow.

The (NSCEP) is the largest and most comprehensive, nationally representative study of U.S. congregations’ finances in more than a generation. It reveals a detailed picture of the nation’s more than 300,000 congregations and provides new insight into how congregations receive, manage and spend money. The study was made possible by a $1.67 million grant from Lilly Endowment Inc.

“There is a widespread perception that when individuals move away from religious affiliation that congregations across the board experience a drop in participation and revenue. While many congregations are experiencing declines, the overall picture is far more complex than conventional wisdom suggests,” said David P. King, the Karen Lake Buttrey Director of Lake Institute. “Our study sheds new light on the rest of the story with a detailed look at congregations, their funding and how they manage their resources.”

Congregations in the U.S. are widely diverse, not only in their beliefs and practices, but also in other characteristics. The NSCEP examines differences in congregations’ size, age, racial composition, and generational makeup, among other factors, and demonstrates how those differences help shape congregations’ varying approaches to economic practices.

Much less is known about congregations’ finances than about those of other types of nonprofits. “Many people who are active in congregations may be surprised by how little they know about their own congregation as well as the broader landscape of religious communities,” King said. “This report can serve as a guide to the kinds of questions that people should be asking about their local congregation.”

The NSCEP asked congregations to compare their giving and participation in fiscal year 2017 to three years earlier.

Key findings include:

  • More than half of all congregations report growth in either the number of regularly participating adults or money received.
  • Congregations experiencing the highest percentages of growth include:
    • those located on the West Coast;
    • younger congregations formed in the past two decades; and
    • larger congregations.
  • Among religious traditions, Catholic congregations face the greatest challenges, with over half of all parishes declining in size and revenue over the past three years. Half of mainline Protestant congregations declined in size, while only 38 percent indicated a decline in revenue. Just over half (51 percent) of black Protestant congregations reported growth in both size and revenue. Evangelical congregations reported the highest percentage of congregations remaining the same in size.
  • Although Christian churches make up the vast majority of U.S. congregations, the NSCEP finds that the houses of worship of other major religious traditions such as Judaism, Islam and Hinduism, when taken together, show significant growth in participation and revenue, indicating growth of America’s religious pluralism.
  • On average, U.S. congregations spend almost half of their annual budget on staff and another quarter on facilities. Individual congregations’ budgets range from a few thousand dollars to several million dollars. Twenty percent of congregations are led by part-time or bi-vocational clergy.

Not all spending goes toward congregations’ internal operations.

“Most congregations support causes and organizations that help people in their community and around the world. Eighty-four percent of congregations have participated in some type of social service or community development program in the last year, from offering food and clothing to addressing physical or mental health needs or providing disaster relief,” said Brad R. Fulton, assistant professor at the Indiana University O’Neill School of Public and Environmental Affairs and co-principal investigator for the study.

These congregations are helping people through programs funded by congregation budgets and through direct appeals on behalf of other organizations.

“On average, congregations allocate 11 percent of their total budget to funding missions, service and benevolence efforts,” Fulton said. “Fifty-seven percent of congregations explicitly collect funds for other social service or missions agencies beyond their own annual budget, such as Catholic Charities, Buddhist Global Relief or Jewish Family Services.”

View the full report

About Lilly Endowment Inc.
Lilly Endowment Inc. is an Indianapolis-based, private philanthropic foundation created in 1937 by three members of the Lilly family through gifts of stock in their pharmaceutical business, Eli Lilly and Company.  While those gifts remain the financial bedrock of the Endowment, the Endowment is a separate entity from the company, with a distinct governing board, staff and location.  In keeping with the founders’ wishes, the Endowment supports the causes of community development, education and religion. The principle aim in religion is to deepen the lives of American Christians, primarily by supporting efforts that enhance the vitality of congregations and strengthen the pastoral and lay leadership of Christian communities. The Endowment also seeks to foster public understanding of religion and lift up in fair and accurate ways the contributions that people of all faiths and diverse religious communities make to our greater civic well-being.

About Lake Institute on Faith & Giving
Lake Institute on Faith & Giving exists to serve the public good by exploring the multiple connections between philanthropy and faith within the major religious traditions. Its mission is to foster greater understanding of the ways in which faith inspires and informs giving. Lake Institute is a program of the Indiana University Lilly Family School of Philanthropy. Follow us on Twitter or “Like” us on Facebook.

About Indiana University Lilly Family School of Philanthropy
The Lilly Family School of Philanthropy at IUPUI is dedicated to improving philanthropy to improve the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The school offers a comprehensive approach to philanthropy through its academic, research and international programs and through The Fund Raising School, Lake Institute on Faith & Giving, the Mays Family Institute on Diverse Philanthropy and the Women’s Philanthropy Institute. Follow us on Twitter @IUPhilanthropy or “Like” us on Facebook.

About the O’Neill School of Public and Environmental Affairs at Indiana University Bloomington
The O’Neill School is a world leader in public and environmental affairs and is the largest school of public administration and public policy in the United States. In the 2020 list of “Best Graduate Public Affairs Programs” by U.S. News and World Report, the school ranks first in the country. Five of its specialty programs are ranked in the top-five listings, including the No. 1 nonprofit management program.