Churches bouncing back

Religious institutions have been hit hard financially by the pandemic, but changes in approach are helping to turn things around

When the coronavirus pandemic hit more than two years ago, few organizations experienced the effects more immediately and dramatically than religious institutions. Even among nonprofit organizations, churches and spiritual centers stood out: The faithful attend weekly, and finances rely nearly 100 percent on donations to the collection plate. Only occasionally do such institutions solicit or receive corporate, government or institutional support to help them meet the bottom line.

At San Diego’s Grace Church, for example, COVID-19 and its related issues took a huge toll in terms of weekly attendance and gifts.

Executive Pastor Scott Laughlin, who has been involved for 22 years and on staff full time for eight years, says the 110-year-old, midsize evangelical Christian church went from 1,100 to 2,000 people attending Sunday services to about 200.

“Early on, some people went to other churches that opened up earlier than us,” Laughlin says. “Some stayed with us.”

Now that Sunday services are back to normal, he adds, attendance has grown steadily, doubling since January.

“People are coming back,” he says. “They miss the in-person faith community. There’s nothing like it.

“Worship virtually is comfortable and convenient from your kitchen or living room, but there’s no substitute

for being in person, for that one-on-one contact with the community.”

Grace Church is just one of many U.S. congregations that struggled during the pandemic. Like some, it has managed to weather the ravages wrought by COVID-19 with help from the federal government’s Paycheck Protection Program, or PPP, and gifts from generous donors, among other assistance.

As noted by CBS Moneywatch, the coronavirus struck when few Americans were attending worship services — at least half of the nearly 15,300 congregations surveyed in a 2020 report by Faith Communities Today reported weekly attendance of 65 or less.

Fearing illness and uncertain about their finances, many congregants reduced or even withdrew their contributions, Laughlin says. Grace Church closed, then offered services online and in small groups. Eventually,

Grace congregants met in the parking lot with social distancing; indoor services resumed last Easter.

“We didn’t decline as much as some other churches, but we lost between $15,000 and $20,000 a month” in donations, he says.

In addition to receiving two rounds of PPP loans, both of which were forgiven, and participating in an employee retention program, Grace Church has taken new steps to ensure financial stability and enhance growth.

“No. 1 is that we have increased transparency,” Loughlin says. “People are really skeptical of churches and their money, and they should be.” Thus, Grace Church ensures ongoing openness regarding financial updates, the church’s future vision, and other fiduciary discussions.

Church members appreciate transparency and want to hear more.

“One large donor gave us a huge check as a thank you,” he says.

Areas of vulnerability

The Lewis Center for Church Leadership, formed by the Wesley Theological

Seminary, aims to promote effective Christian church leadership worldwide. Its website includes a recent article written by Lovett Weems and Ann Michel offering eight key strategies leaders can use to deal with COVID-19’S financial crisis.

“Savvy church leaders will take this opportunity to create a healthier financial future for their congregations by managing resources wisely, engaging givers more effectively, and seeking creative new approaches to economic sustainability,” the authors say.

Grace Church’s Laughlin observes that churches — especially in Southern California — must expect change as the norm, with leaders successfully withstanding the coronavirus and other challenges by developing reasonable budgets, exploring new revenue opportunities and remaining flexible.

“The pandemic was in some ways a wake-up call to face problems and opportunities that had existed long before the advent of COVID-19,” Weems and Michel write. “The crisis has revealed areas of vulnerability and has increased the receptivity to change.”

Religious institutions continue to assist struggling churches, including the U.S. Conference of Catholic Bishops, which acknowledges that dioceses, parishes and individual Catholics are severely impacted by the coronavirus and offers resources for Mass, prayers, catechetical material and reflections to help during the pandemic.

And while many congregations suffered financial losses, others embraced online giving, says a report by Faith Communities Today. Gifts to religious organizations grew to more than $131 billion in 2020, with Americans donating a record $471 billion to charity, according to an annual report by Givingusa.

Laughlin says Grace Church is increasing its community outreach efforts, including resources for the homeless and neighborhood landscaping projects and developing innovative ways to generate income.

“We have an amazing preschool, and we’re thinking about how to expand it,” he says. “We’re also looking at opening a coffee shop and applying our financing to projects and areas where people can tangibly see where our money is going.”

In addition, he says, the church is focusing not on numbers but on engagement, emphasizing small group and family activities, Bible study and service.

Perhaps most important, he says, Grace Church approaches worship differently by focusing on reverence for Scripture and emphasizing the faith journeys of its members.

Their reaction, he says, “has been incredible because it doesn’t feel fake or shallow. It’s something real.”

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