Report: Changing demographics will affect church funding

By Marta W. Aldrich*

A new study explores current and future funding patterns in The United Methodist Church based on membership decline, member income growth, aging clergy, giving to the local church, annual conference budgets and cultural changes, among other things. The report is a mixed bag of good news and bad news. A UMNS photo illustration by Mike DuBose.

NASHVILLE, Tenn. (UMNS) - The face of today's United Methodist is markedly different than it was 40 years ago - a reality that concerns church financial leaders tracking how changing demographics are hitting the denomination in its pocketbook.

In the United States, which provides the lion's share of denominational resources, United Methodists are becoming rarer in a growing population. They are generally older adults above age 57 who attend larger churches. Most are white or African American. And they are generally wealthier than United Methodists of previous generations.

The implications are far-reaching and represent a mixed bag of good news and bad news relating to denominational resources and reach, according to Don House, chairman of a task force that recently completed its study of funding patterns within the church.

"While the (U.S.) population is growing, our membership is decreasing per capita, which means United Methodists are having a smaller and smaller impact on society. That wasn't supposed to happen," said House, a research economist in College Station, Texas.

House presented the group's report during the September meeting of the governing board of the denomination's General Council on Finance and Administration, on which he also serves as a member. The board voted to send legislation based on the report's recommendations to General Conference, the denomination's top legislative assembly. Among other things, the legislation aims to hold leaders at all levels of the church accountable in their responsibility to promote, support and model Christian giving.

Mixed bag
House presented the bad news first. Membership has decreased by more than 20 percent since 1973, and membership per capita has dropped from 4.75 percent to 2.7 percent by 2005. The church has 8 million U.S. members and 11.5 million members across the globe.

During the same time, the number of United Methodist churches has declined by 12.4 percent. The declines have been significant in all five of the church's U.S. jurisdictions.

"There is no jurisdiction with a winning report card," House declared. "We are getting rare in the population, and it has an impact on our funding."

He cited numerous trends that help explain the drops:
Ethnic background: In counties with a high percentage of whites and African Americans, a solid percentage of the population attends United Methodist churches. However, according to House, "we don't do well" in counties with growing or larger percentages of Asians, Hispanics, Pacific Islanders and Native Americans.

Age: Based on the U.S. population, those attending United Methodist worship services today are underrepresented in the under-35 age group and overrepresented in the over-57 age group.

Church size: The largest churches are growing while the smaller ones are stagnant or declining. "The smaller you get, the faster the decline in membership. It wasn't that way in the '70s," he said, noting that church growth 30 years ago was similar among all sizes of churches.

The good news is that, despite declining membership and attendance, United Methodist churches claim a relatively constant share of the dollar given to U.S. religious groups. While religious organizations in general are losing their share of the philanthropic dollar to educational institutions and foundations, The United Methodist Church has received a steady 6 percent of the religious dollar since the mid-1980s.

House cited data indicating that the average income of a United Methodist is growing faster than in the general population. He noted that, beginning in the mid-1990s, as older, lower-income members have died, new members replacing them have generally earned higher incomes. "United Methodists are higher-income earners than ever before," he said.

The task force report adds: "Much of the growth in giving per member since the mid-1990s has been caused by the growth in membership incomes rather than an improvement in the percentage of income given to our denomination."

Sagging apportionments
The report says churchwide United Methodist ministries are struggling because they are receiving less funding from local churches.

Such ministries are primarily funded through a system of apportionments, in which local churches make contributions based on an approved formula. The funds are transferred from local churches to their annual (regional) conferences, which then transfer the money to the denomination.

In recent decades, however, congregations have spent more on local ministries and needs, resulting in a decreasing share of total funds for the denomination. In 1974, local church contributions to the apportioned funds represented an average of 4.5 percent of local church expenditures, compared with 2.5 percent in 2005.

"We have lots of money," said House. "… Our problem may be the friction of getting that money from the local church. … We need more respect for the mission and ministries of the general church, even while we celebrate what goes on in the local church. We are perhaps underfunding the connection. But at some point, the connection will begin to be dismantled."

While the denomination is managing financially for now, House and the task force are concerned about reaching a "tipping point."

"So far, while membership has decreased, our dollars have still grown. Will we reach a point where our dollars will decrease as well? This is the point when we would have to begin to disassemble our infrastructure," he said.

House noted that some annual conferences already have reached that point and, without change, others are expected to as well in the next 10 years. "We have seen annual conferences merging. We have seen districts merge. That is a footprint of the disassembly of infrastructure," he said.

The report cites the church's aging clergy as another factor expected to affect future funding patterns. The average age of United Methodist clergy has increased from 45.8 in 1982 to 51.4 in 2005. Annual conferences are increasingly relying upon second-career clergy, and only 5 percent of clergy are under age 35. The church anticipates mass retirements in the next 10 to 15 years that will result in a significant loss of experience, leadership and expertise.

"If there is to be a concerted effort to increase membership and attendance through new church starts, and if these new churches are to be primarily served by first-career pastors, there must be a change in the current methods of attracting more persons to the order of elder," the report said.

Taking action
The task force offered numerous recommendations - many related to revising the Book of Discipline - to hold church leadership more accountable, including bishops, district superintendents, local pastors and candidates for ordained ministry. The directors of the General Council on Finance and Administration are including the recommendations in their proposed legislation to General Conference.

The measures include a proposal to require jurisdictional committees that already review the work of bishops to also evaluate their bishops' leadership in promoting and supporting the full payment of apportionments. When found to be deficient in this task, a report would be sent to the president of the jurisdictional college of bishops, who would share the report with the Council of Bishops in executive session.

Candidates for deacon or elder would have to include in their graduate theological studies the theology and discipline of financial giving, in addition to current required areas of study such as Old Testament, New Testament and church history.

Other legislation being sent to General Conference would:
.Increase the membership of each local church council by one to include an "advocate in connectional giving" to promote the financial support of churchwide mission and ministries. Training and support for this position would be provided through the annual conference and denominational agencies responsible for stewardship and connectional giving.

.Require that a study precede any proposal to change the apportionment formula or method by an annual conference. The change is designed to "protect the annual conference council on finance and administration from unprepared motions on the annual conference floor …" and ensure that such changes and their implications are fully explored before being approved.

.Order a study of the ways that the central conferences - those in Africa, Asia and Europe - can participate in the apportionment system.

General Conference, which convenes every four years, will meet April 23-May 2 in Fort Worth, Texas.

*Aldrich is news editor of United Methodist News Service.