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Church Funding Lagged Other Nonprofits in 2020

More than one-quarter (26 percent) of all Christian organizations reported cash donations at least 10 percent greater during 2020 than in 2019, according to Remarkable Resilience: The 2021 Financial Outlook for Churches and Ministries, a report from the Evangelical Council for Financial Accountability (ECFA) in Winchester, Va.

Church coffers lagged slightly, but didn’t suffer too much. When churches were asked if 2020 totals were higher, the same or at least close to 2019’s levels, 83 percent said they were, compared with 87 percent of respondents from other nonprofits.

Churches and ministries lagged in regard to other income during 2020, with only 13 percent of respondents saying funds from facility rentals, registrations, program fees and the like had increased, compared with 22 percent of other nonprofits. And church leaders were more likely to report decreases from these income sources, with 39 percent doing so, when compared with other nonprofits (29 percent).

Christian ministry leaders were less bullish about gifts and donations during the first quarter of 2021. Only 61 percent were optimistic about their fortunes for the quarter, compared with 67 percent of respondents from other nonprofits. Conversely, 17 percent of church officials were pessimistic about donations for first-quarter 2021, compared with only 10 percent of other nonprofits.

For churches, that represents the continuation of a longer-term confidence decline. When asked the same question in May 2020, 69 percent were optimistic, a figure that slipped to 68 percent in August and 64 percent in November. Other nonprofits, however, saw a steady rise during the same period.

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Churches and ministries were stronger when it came to maintaining their cash reserves, with 79 percent of their representatives saying they did not touch reserves, compared with 71 percent of other nonprofits, which might have upped expenditures in response to greater need.

But churches and ministries were more likely to have made staff cuts during 2020, with 20% having done so, compared with 16% of other nonprofits. And 10% of ecumenical respondents anticipate reducing headcount during the first five months of 2021, compared with only 4% of other nonprofits.

Looking back at revenue levels over the past three years, the big were most likely to get bigger, both in churches and ministries as well as other nonprofits. Only 41 percent of churches with revenue less than $500,000 said they had seen revenue growth. As revenue levels increased, the likelihood a church had seen growth did as well, reaching 64 percent for those with annual revenue between $5 million and $10 million and 66 percent for those with revenue in excess of $10 million.

One revenue source respondents are forsaking is Paycheck Protection Program (PPP) loans. Asked whether they would apply for one during 2021, representatives from only 23 percent said they would, with 69 percent indicating they already knew they wouldn’t qualify or would not apply for other reasons. Eight percent were uncertain.

Results were based on 1,292 responses from 562 churches and 730 nonprofits to a survey fielded between Jan. 27 and Feb 24.

This article first ran at The NonProfit Times. It is reprinted with permission.

The NonProfit Times

Our flagship publication, celebrating 31 years, reaches more than 36,000 executives of the nonprofit community in print and digital format, ranging from C-Suite executives to directors of fundraising, marketing, social media, and human resources departments to accounting and other financial management decision-makers. Nonprofit sector influencers on all levels turn to The NPT for news, information, and insight that consistently helps them achieve their professional goals.