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September 2, 2020
A new study of 1,231 churches supplies deep insight into how churches in 2019 spend their money. This study, The National Study of Congregations’ Economic Practices (NSCEP), published by the Lilly Family School of Philanthropy, gives pastors the ability to understand best practices, correct common mistakes, and create legacy-building budgetary practices that enable them to leave an impact on their communities for generations to come.
Here, we are going to take a look at [X] pieces of data that give pastors the critical insights they need to understand where they stand in the modern church landscape.
Let’s dig in.
This is an enormous sum of money. This statistic proves that church members are collectively passionate about the mission of the church. Often, how this money is distributed (as we will see below) corresponds to how the church’s leadership culture relates to its financial practices on a cultural level. How often a church teaches on giving, how proactive leadership is in analyzing finances, and what percentage of the budget is spent on personnel to maximize and grow church size and impact correlates to receiving a larger percentage of this $124.52B.
This average takes into account new church plants, older shrinking churches, and booming megachurches—analyzed as organisms that constitute a single population of communities seeking to make an impact for the kingdom of God.
The median congregational revenue is $169,000. This means that, as the congregational revenue increases, the number of churches that share in larger annual revenue calculations drastically decreases.
Among African American Protestant churches, 59% of these churches increased their giving in 2018. This is likely in part due to the rise in the availability of mobile and recurring giving. Prior to 2017, the online giving industry was largely owned by business-oriented companies such as PayPal and Square, which were not optimized for church giving or congregational user experience. In 2018, companies such as Tithe.ly had already optimized and provided a fully integrated digital and recurring giving solution for churches.
56% of Catholic churches decreased in giving in 2018. This may be due to a slight latency among traditional churches to adopt digital and recurring giving solutions.
The most obvious reason for this is that planted churches are geared toward growth as a categorial priority in early years, while older churches tend to be focused more on legacy, sustenance, solvency, and survival.
Churches planted during 1975 and 1999 decreased most in size. One primary reason for this decrease is the fluctuation that occurred in the 21st century in which conservative church planting movements began funding organization expansion outside the scope of legacy denominational oversight, and many of these mainline denominations planted churches between 1975 and 1999.
28% of overall U.S. giving were in small donations (under $100k per year). 33% of giving came from medium-sized donations ($100k-$245k annually). Only 9% of church revenue came from large donations ($1M+)
81% of church revenue came from individual donations. 34% of congregations have endowments, which constitutes on average 4% of their revenue. Only 2% of churches receive revenue from government grants; 12% receive from non-government grants.
50% of congregations received gifts mid-service via a digital format. 14% of congregations offered text-to-give option. 5% of churches offered a giving kiosk option. The largest donations to churches cam by check (average gift: $4544), more than 4 times received digitally (average $1180) or in cash ($1020). On average, congregations receive 22% of their giving digitally, but this number is increasing daily.
24% of adult congregants made at least one digital contribution to their congregation in the past year. However, this is likely due to the relative novelty of digital giving platforms. Just like other manually administered eCommerce solutions such as the Starbucks app, Venmo, and PayPal, digital church giving solutions like Tithe.ly are growing rapidly in popularity as a primary means of facilitating financial transfers.
55% of churches offer a recurring donation option through their digital service. Among those churches, giving tends to be higher than among churches that do not adopt digital giving solutions. The reason for this is twofold.
First, digital giving can offer churches the opportunity to make recurring giving as easy as tapping a button in their church app, which establishes a more stable and long-term financial relationship between the giver and the church. Second, churches that offer digital giving tend to be more culturally modern, which represents a broader attitude toward technology adoption and growth that attracts more people to the church.
Evangelical protestants make the most money through capital campaigns (58%), while African American Protestant congregations practice this least (18%). The average capital campaign goal is $850,000, and the average amount raised is $630,000.
43% of congregations teach on giving either once per year or never. Only 36% of churches teach on giving quarterly. Among congregations that teach on giving weekly (9%), 90% of those congregations reported financial growth. Among churches who discuss giving monthly, reported financial growth was 73%.
38% of congregations share financial reports through bulletin, 20% through newsletter, 13% through email, and 5% on their website. While 92% of churches create financial reports, only 81% share it with congregations.
Tracking money—95% of congregations track their money. 14% track money with pen and paper, 18% use Excel, and 51% use accounting software.
63% of churches acknowledge gifts annually through an end-of-year giving statement, while 28% acknowledge through quarterly statements.
Among congregations whose clergy look at giving records, 58% report an increase in the amount of giving they received (42% of churches report an increase of 10% or more).
Where finances are spent, on average—49% on personnel, 23% on facilities, 11% on missions, 10% on programs, 6% on dues. Evangelicals, on average, spend more on personnel (51% of budget) and less on facilities (21%), compared with African American Protestant churches that spend 23% on personnel and 25% on facilities.
50% of churches planted between 1975 and 1999 own their buildings, and the other half have mortgages. Only 11% of churches planted after 2000 own their buildings, and 89% have mortgages. This is, of course, due to the fact that churches planted later are still in the early stages of growth, making meaningful capital campaigns more difficult to execute successfully, and mortgages more necessary to build equity in its adolescent years.
On average, 61% of a church’s missions budget is spent on local missions. 20% is spent on U.S. missions. Finally, 19% is spent on international missions.
Review these critical data points with your church team. How do these statistics interface with your congregation’s current situation, demographic, and season? How can you optimize your financial practices in light of these data points? How can you pivot certain habits and attitudes within your senior leadership team to more optimally succeed in growing your church according to your organization’s core values?
Let us know! We are always interested in helping churches to grow and more successfully execute the mission God has put on their senior leadership team.