Birmingham area churches struggle in tough times
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The doors are locked and a "For Sale" sign stands in front of the 1,000-seat sanctuary of the 32nd Street Baptist Church in Powderly.

The church wasn’t able to make the balloon payments on its mortgage, and the bank foreclosed.

It’s an extreme case, with factors other than the economy contributing, but it’s a symbol of the pinch many churches are feeling in a difficult time.

"Giving is down, across the board, for churches that aren’t growing," said W.A. Casey, a broker for Birmingham Guaranty Realty who is selling three church buildings, including the one that was foreclosed.

Casey, a deacon at Sixteenth Street Baptist Church, said his church has a stable budget, but he sees many that don’t. Still, churches are faring better than many businesses, he said.

"I have more (real estate) activity on churches than other properties," he said. "When times get tough, people turn to the Lord."

The Rev. Steve Green, pastor of More Than Conquerors Faith Church, said his congregation is growing and the budget is stable. But he attended a conference last month of more than 200 pastors in which the economy was subject No. 1.

"You can tell that people are being challenged," Green said. "We’re trying to establish reserves and cut back. The church is growing; that helps stabilize income. But churches around the nation are feeling it. This is a time to be faithful stewards."

Struggles widespread

About 32 percent of more than 800 church administrators surveyed this year said their churches were having an especially hard time financially because of the economy, according to a report released in February by the National Association of Church Business Administrators.

More than 60 percent reported that in 2008, giving to their churches held steady or improved over the year before. But administrators were much more pessimistic than in a previous survey in August.

Last summer, only 18 percent reported that their churches had frozen or cut employee benefits; that’s up to 47 percent this year.

Layoffs and building delays also increased, according to the survey of church administrators from a variety of denominations. In the national survey, 20 percent of administrators said their churches had been forced to lay off employees and 26 percent said they had postponed a major capital project.

Last year, employees at Trinity United Methodist Church in Homewood went without a pay raise. "We could already see we were going to have to do adjustments with budgets," said Ann Neptune, business administrator at the church and former president of the north Alabama chapter of the National Association of Church Business Administrators. "Our budget was tight last year."

But after cutting expenses and adjusting downward by 10 percent mid-year, the budget finished strong and the staff got a 4 percent raise this year, she said.

"We’re watching very closely," Neptune said. "If we had to do it last year, we might have to do it again this year."

Paying off a building expansion five years ago has been complicated. "That’s extra-mile giving," Neptune said. "They cut that first before they’ll cut their tithe."

New membership has helped increase pledges at Trinity by 2.2 percent this year, up from a 1.9 percent increase last year, but down from 10 percent in previous years.

"The news is not as bad for churches as it is for the general economy," said Phill Martin, a Samford University graduate who is deputy chief executive of the national administrators association.

How churches are doing reflects the larger economy of a region, Martin said. "If a third of your membership has lost its jobs, you’re going to have a hard time raising money. But when the stock market is going full throttle, I can still tell you of churches that are struggling."

Many congregations are postponing building projects or being cautious, Martin said. But he believes people will support their churches.

"People’s giving is not just for a tax advantage," Martin said. "They give out of sense of commitment and call."

Impact of recession

Empty Tomb, a ministry that studies church finances, says there has not been a strong correlation between recessions and declines in annual per-capita giving to churches in the past 40 years. From 1968 to 2005, church giving declined in three of the 10 years that showed a month or more of economic decline.

"Giving declined in a one-year recession in 1970, but also in 1968 and 1969, more for cultural reasons, such as denominational controversy," said Sylvia Ronsvalle, Empty Tomb’s executive vice president. "That was the only three-year decline period. Giving went down in 1995 and 2003, and neither was a recession year."

Cultural trends, institutional loyalty and denominational controversy appear to have as much effect as the economy on church giving.

"One of the factors is the church is seen as community directly beyond the family," Ronsvalle said. "Regular attenders tend to give. The more regular the attendance, the better the giving."

There is evidence that during hard times in American history, churchgoers sacrificed to give to their churches.

"Religion seems to be at the core of philanthropy — not to say it won’t go down if the recession is extended," Ronsvalle said.

During the Great Depression, with 25 percent unemployment, giving as a portion of income stayed above 3 percent through 1933, Ronsvalle said. "People were still placing a lot of priority on giving to the church."

There may be some upside to the current economic downturn, said Casey, the real estate broker. It’s a good time to get a deal on a church building.

Over the past few weeks, potential buyers have been eyeing the foreclosed church building in Powderly, and Casey’s confident he’ll sell it.

Appraised at $650,000, it has a large fellowship hall, 20 Sunday school classrooms and a three-bedroom parsonage. The sale price is $450,000, Casey said. "It’s a good deal for someone."

ggarrison@bhamnews.com