The Economy - What I am telling reporters - Explode the Myths

It’s been a furious few months with reporters on the topic of churches and the economy. It started in December 2008 when some churches were worried about their year-end giving. I stated then that I felt we would see record giving for EXTERNAL projects during the Christmas season but if the focus was internal, churches would come up short. So far, so good on that prediction.

But what about now. Here we stand at the end of the first quarter. The general

U.S.

economy is still technically in recession. How are the churches responding?

My database of conversations comes from larger, growing churches. Those are the types Leadership Network helps to connect, so that is my primary world.

I also have seen multiple data studies, including our own by Dr. Warren Bird on the Economic Outlook of 555 Executive Pastors (due to be released in April) as well as surveys by my friend Ed Stetzer and his team at LifeWay Research, among others. (Find Ed at www.edstetzer.com.)

Reporter conversations

Here is the bullet point version of my discussions with reporters. It usually begins with the statement by the reporter “Megachurches are having a tough time aren’t they?”

And my answer is “no.”

“That’s not what I am reading” says the reporter.

“I understand, but news stories are bad news more than good news.”

Myth 1: Lots of megachurches are in foreclosure.

Nope. As far as I can tell there are probably one to two dozen churches (including the megachurches) that I have seen in news reports around the country that are in foreclosure. Most of these do not meet the mega threshold (2,000 or more weekend attenders). Some had overextended themselves financially.

Among true megachurches all cases I have seen in news reports have a lead pastor going through marital difficulties/divorce/or other leadership issue unrelated to the economy.

Myth 2: Offerings are way off in megachurches.

Nope. As far as we can tell money is coming in fairly well in the first quarter. Some regions of the country are being hard hit. Mostly the “sand” states (FL, AZ, NV, CA). Warren Bird outlines that in the upcoming LN Report.

But most churches report fairly strong first quarter giving when compared to last year.

Myth 3: Lots of staff cuts at megachurches.

A few fairly prominent churches have had some lay offs. Many have hiring freezes. But context is very important here.

First, I had conversations in early 2008 with lots of Lead and Executive Pastors who said they had planned for little staff and budget growth in 2008. So they were bracing for a recession then and had adjusted their staffing and budgets.

Second, I do know that in early/mid 2008 leaders began making contingency plans for reductions along with some strategic rethinking in the role and size of their staffs. As it became necessary, some cuts were made.

Third, though overwhelmingly there have been no cuts in most of the churches. There may be salary freezes and some other creative solutions, but fewer staff cuts than the doom and gloomers have reported.

Job losses are always hard and I don’t want to minimize anyone’s experience. I spoke to a leader recently who did have to cut between five and ten staff in January. Fortunately half had found other good placements within a few months.

Myth 4: A sense of foreboding among megachurch leaders on 2009 giving.

I think there was a sense of “what is going to happen?” and some increased heartburn from September 2008 until January 2009. The focus seemed to be on the year-end numbers.

In January, when leaders saw that the world didn’t end, the turn was rapid. Now the focus is on “What are the opportunities presenting themselves to us?” I will blog more on that later. Please watch for that.

Myth 5: This is hitting the small church hard.

Depends. That is not my world so much but here’s the situation.

Not a lot of small churches have mortgages or debt. If it’s a single staff church, they operate more like family and they find a way to survive.

The mid sized church, say 200-800 range in worship is having a tougher time.

Look at it this way.

A single staff church or small staff (pastor plus a part time secretary and others) finds a way to make it work. Probably keeps them all.

A megachurch that lays off 5 staff members out of 55 staff loses 10% of staff capacity.

But a mid sized church with a staff of 7 or 8 that loses 2 or 3 loses a much greater percentage of capacity and usually relationships.

Another way to look at it relationally.

A small church is bound by relationships between each other. The pastor is secondary.

The megachurch usually has lots of interlocking relationships between each other and multiple staff leaders.

But a mid sized church, while having good relationships with each other also has strong relationships to one staff member and that loss is felt hard.

So, as in the rest of our society, the mid-sized organizations are the hardest hit.

To close this long post, I would say that as in past downturns, giving to local congregations is one of the last things to suffer. People give where their heart is. I can’t remember exactly who said that, but I think he was an important guy.

Dave Travis is the Managing Director of Leadership Network.