(RNS) — The true impact of the pandemic on local houses of worship continues to come into focus — from diminished attendance to changing tax laws to an overall decline in support for nonprofits. Yet, according to a new study, 61% of religious leaders report their congregation to be in excellent or good financial health, a significant increase from 2020.
The report, the most recent in the Exploring the Pandemic Impact on Congregations research project, was released on Tuesday (July 16) by the Hartford Institute for Religion Research and examines congregations’ financial health post-pandemic. Based on data from 2023 and 2020 and surveying congregations from more than 50 Christian denominations, as well as Jewish, Bahá’í, Muslim, Hindu and Sikh congregations, the report found that leaders say their institutions are generally in good financial health, if a bit limited due to inflation.
Congregational leaders were asked in 2023 to assess the financial health of their congregation. About a quarter of congregations reported that they were in “excellent” financial health, more than a third (35%) reported “good” financial health and about 28% said it was “tight, but we manage.” Only about 1 in 10 reported being in “some” or “serious” financial difficulty (8% and 3%, respectively). By comparison, in 2020, only half reported “good” or “excellent” financial health, and more congregations reported that they were experiencing fiscal hardship.
Charissa Mikoski. (Photo courtesy HIRR)
Charissa Mikoski, Ph.D., the primary author of the report, pointed out that it’s important to note the congregational health question was self-reported by congregations and thus subjective. Instead of doom and gloom, she found it “interesting so many viewed their financial health as good or excellent despite inflation.”
In 2023, the report found the typical congregation had a median of 60 in-person weekly worship attendees and an annual income of $165,000, with expenses of $160,000; an increase over 2020, when churches reported a median income of $120,000, with $108,000 in expenses. According to Hartford, 2023 saw the highest income reported by congregations in nearly 15 years, even as congregations reported the lowest average worship attendance since Hartford’s surveys began in 2000.
This increased median income, the highest ever recorded by Hartford Institute’s surveys, has helped most congregations’ fiscal health. However, researchers say, it’s not keeping pace with inflation.
“If congregations were bringing in the same amount that they were from 2010, they would need to be bringing in over $200,000 a year,” Mikoski told Religion News Service.
“Since inflation is so high in the last couple of years, even though this is the highest level of income we’ve seen, it’s not keeping pace with where it should be.”
“Income Rising but Not Keeping Pace with Inflation” (Graphic courtesy EPIC/HIRR)
The report noted that the average size of the congregation is an important factor in total income. The median income for a congregation with 50 or fewer attendees is just $66,000 compared to the median income for a congregation with 51-100 people, which is about $177,000. Congregations of 101-250 report a median income of $300,000, while churches larger than 250 report a median income of as much as $2 million.
Researchers found the percentage of congregations reporting their financial health as “in some difficulty” or “in serious difficulty” has decreased to the lowest levels in more than two decades. Only 11% of congregations in 2023 reported themselves in these difficulty categories, which is down from a peak of about 20% of congregations surveyed in early 2020.
“This could be indicative of a survival effect, such that some congregations who were in serious financial difficulty prior to the pandemic may have closed entirely in the past few years,” the report’s researchers wrote.
“Percent of Congregations in Some or Serious Financial Difficulty” (Graphic courtesy EPIC/HIRR)
The survey asked congregations to reflect on their current (2023) financial health and that of five years earlier (2018) to determine which congregations were financially stable, which had improved, and which had experienced financial decline over the past five years. About a quarter of congregations reported being worse off financially in 2023 than in 2018, a fifth had improved their financial situation and the largest share remained constant.
“This relatively positive assessment could be considered surprising given that this period directly spans the COVID-19 pandemic,” according to the report.
“Change in Financial Health in 5 Years” (Graphic courtesy EPIC/HIRR)
Data for this report came from the Exploring the Pandemic Impact on Congregations (EPIC) research project and the Faith Communities Today (FACT) research initiative. Most of the findings are from the 2023 survey of over 5,000 congregations and the 2020 survey of over 15,000 congregations, representing more than 50 Christian denominations, as well as Judaism, Bahá’í, Islam, Hinduism and Sikhism.
The estimate for the margin of error is plus or minus 4 percentage points at the 95% confidence level.
The Exploring the Pandemic Impact on Congregations study is funded by Lilly Endowment Inc. which also contributes funding for RNS.