Financing Religion

views updated

Financing Religion

During most of Christian history, churches were supported by taxes, land rents, and benefices. Throughout the Middle Ages, taxes and rents supported the institutions. This ended with the Napoleonic era, when most church lands in Europe were confiscated, and clergy came to be supported by governments.

In the American colonies, churches were supported by local governments until the late 1770s. In 1791 the First Amendment to the U.S. Constitution called for disestablishment of all churches and an end to government support. The new method of financing churches became pew rentals, which lasted throughout the nineteenth century. In the years 1900 to 1920 the system of stewardship appeals, pledges, and envelopes arose that is in use today. At present pledging is the major method of raising financial support in mainline Protestantism, and a combination of tithing and pledging is the major method in evangelical Protestantism. Roman Catholicism relies less on these methods and more on voluntary offerings.

Religious Giving in the 1990s

Most religious institutions today get their financial support from giving by members. In a 1993 study of congregations in five denominations (four Protestant groups and the Roman Catholic Church) in America, it was found that 89 percent of all income came through regular contributions from members. The rest came from bequests, income from investments, and small amounts from fees for programs, rental of building space, and fund-raising events (Hoge et al., 1996). Very few congregations receive support from their denominations.

A 1991 study estimated that 72 percent of the funds of religious congregations was used for current operating expenditures, 14 percent was spent on local capital outlays and savings, and 14 percent was donated to other organizations and individuals—usually denominational programs. This agrees with a 1993 study of five denominations in which 13 percent of funds was sent to mission and service programs outside the congregation. Other research demonstrates that this percentage declined gradually from the 1960s to today.

Denominational offices and programs are supported by payments from congregations. Every denomination has a required or suggested payment to regional and national synods, dioceses, and conferences. These offices in turn support seminaries, missionaries, publications, and so on.

Religion is the number one recipient of philanthropic giving in the United States. It receives an estimated 60 percent of all money given (Hodgkinson and Weitzman, 1996). The estimated total of contributions to religion was $44 billion to $49 billion in 1995. Most religious giving goes directly to local congregations, although in 1993 approximately 16 percent of all religious giving by individuals went to groups or causes outside of local congregations, most commonly to mission programs, social service programs, colleges, and seminaries.

The trend in overall religious giving to Christian churches in raw dollars has been moving upward at roughly the rate of inflation since the 1960s. But as a percentage of overall household income of church members, it has fallen gradually. A study of Protestant denominations in 1995 found that the percentage of household income given by members fell gradually from 3.1 percent in 1968 to 2.5 percent in 1992 (Ronsvalle and Ronsvalle, 1996). Catholic trends are largely unknown, since the Catholic Church never releases summary data on contributions.

Denominational Differences

The methods of handing contributions vary from denomination to denomination. Among Christian groups the Church of Jesus Christ of Latter-day Saints (commonly called Mormons) is unique; it requires that members contribute 10 percent of their household income if they are to be in good standing and receive an entrance pass to Mormon temples. Each Mormon member meets with the local clergyman once a year to discuss the member's giving during that year, and the clergyman decides whether to give the person a pass for entering a temple. Due in part to this procedure, Mormon giving is the highest of any Christian group. No other denomination requires giving 10 percent of income (called "tithing") and also checks up on each member once a year. A few other denominations require tithing for being a full member but without any checking up.

The mainline Protestant denominations (Episcopalians, Presbyterians, Lutherans, Methodists, United Church of Christ, Disciples of Christ, and some others) put less emphasis on tithing. They typically have a stewardship campaign in the autumn, during which they ask members to fill out pledge cards saying what they will contribute the following year. Virtually all churches provide envelopes to members so members' contributions can be confidential, yet the treasurer can add them up for the year and send the member an end-of-year receipt for income-tax purposes. Pledging is much less common in small churches in any denomination, since they are usually made up of only a few families who know each other well; thus their financial arrangements are informal. The evangelical Protestant denominations have higher percentages of members who tithe, so they rely less than mainline denominations on annual stewardship campaigns and pledging.

Religious giving in the Jewish community is different, largely because many American Jews see themselves as ethnically Jewish but not religious. Each metropolitan area in the United States has a Jewish federation, which organizes fund-raising. The 200 federations in operation in the United States in the 1990s resemble combined United Way campaigns in each city, and they collectively collect and disburse the vast bulk of Jewish charitable giving. The federations support over 1,000 Jewish organizations and causes, ranging from Jewish schools at all levels to community centers and study trips to Israel. The federations are the main planning and decision-making structure in the American Jewish community.

Synagogues are separate, and they are supported mostly by annual membership dues, which are seen by Jews as akin to school tuition, not as charitable giving. According to a 1990 survey, 41 percent of American Jews were affiliated with a synagogue, and affiliation entails paying annual set dues, typically in the range of $600 to $1,400 for a family. In a typical synagogue, two-thirds to three-fourths of the annual budget is covered by membership dues. In addition, synagogues ask for voluntary contributions and sponsor fund-raising activities. Total philanthropic giving by Jews, apart from synagogue membership dues, is high, estimated at about $1,600 per family in 1990 (Kosmin and Ritterband, 1991).

The amount of money contributed by members in various denominations differs widely, with some contributing five times as much as others. As noted earlier, the Mormons have the highest rate among Christian bodies, followed by several evangelical and pentecostal bodies, then followed by mainline denominations. The Catholic Church has a lower rate of contributions than the Protestant bodies. In 1993 a study estimated that per-household giving to one's congregation averaged $1,696 in the Assemblies of God, $1,154 in the Southern Baptist Convention, $1,085 in the Presbyterian Church (U.S.A.), $746 in the Evangelical Lutheran Church in America, and $386 in the Catholic Church. Other research shows that Mormon giving and Jewish giving are higher than any of these five.

Influences on Giving

The main explanation for the different rates of contribution is in four factors. First, different religious groups have different levels of personal participation, especially attendance and volunteering. Second, different groups attach different theological meanings to contributions, most importantly regarding whether God will reward the givers with spiritual benefits. Third, conservative and evangelical groups give a higher percentage of total household philanthropic giving to their churches and less to other causes; that is, their giving is more concentrated on the local church. Fourth, some denominations stress the obligation of tithing one's income, while others do not. Also, some nontithing groups stress making an annual pledge befitting the level of one's household income, while others do not. Groups that require tithing or annual pledging have higher levels of giving than others. In all of these causal factors, conservative and evangelical Protestant groups are highest.

Levels of giving by individual members are highly skewed, with a few members contributing the majority of funds in all churches. The formula applies in virtually all congregations that 20 percent of the households contribute 80 percent of the funds. Sometimes it is 25 percent contributing 75 percent.

Trends in the 1990s

The most important trend is that church members and synagogue members have an increasing antiestablishment mood, which weakens their commitment to national denominational structures. Thus decisionmaking is being made increasingly at the local level, less money is being sent to national offices, and national denominational structures are slowly shrinking. The trend has been present since the 1980s. The best guess is that future denominational structures will be less hierarchical and more voluntary.

A second trend is that young adults have weaker denominational loyalty than their elders, so that young adults shift denominations readily (especially within Protestantism and Judaism) and gravitate to local churches whose programs and leaders they like best. This makes financial bases of local churches more volatile and less stable than in the past.

A third trend is a clear growth in endowments for congregations. Although exact numbers are not known, it is clear that bequests, wills, and large gifts to congregations are higher today than ever. The same is true of many denominational programs, so that, for example, foreign missions in mainline Protestant denominations are often supported more than 50 percent by endowment income rather than by current contributions from members.