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Recession puts the squeeze on some churches

A decline in charitable giving has forced congregations to cut staff and ministry work and pushed others into bankruptcy and foreclosure. Yet others are unaffected, even thriving.

May 02, 2010|By Mike Anton, Los Angeles Times
  • Youths wait for Bible study at Seabreeze Church in Huntington Beach. A 30% drop in donations put the church on the precipice.
Youths wait for Bible study at Seabreeze Church in Huntington Beach. A 30%… (Bob Chamberlin / Los Angeles…)

If a church is a family, then Seabreeze Church in Huntington Beach found itself confronting a question most families face: Should we remain renters, or stretch, take out a big mortgage and become owners?

For nearly two decades, the evangelical congregation held services in the theater of the city's central library, and before that, met in a senior center. But in 2004, near the peak of the real estate market, a rare opportunity in the virtually built-out city presented itself: A failing tennis club was for sale. After much discussion, Seabreeze saw a chance and took the plunge, building a $12.5-million campus on nearly five acres.

"Literally, it was a gift from God," administrative pastor John Stoffel said of the land becoming available. "We were biting off a huge chunk.… It was a risk. But we thought it was a risk that was worth taking."

In retrospect, the timing couldn't have been worse.

The Great Recession has left millions of people jobless and cratered home values and retirement accounts. It has also been felt in church collection plates nationwide.

Declines in charitable giving have forced many congregations to slash staff and downsize ministry work. A Vermont church went so far as to put up for sale a 100-year-old Tiffany stained-glass window to keep its homeless shelter open. Experts say a relatively small, but unprecedented, number of churches have gone into foreclosure or bankruptcy.

"It's been a tough year for churches," said Simeon May, chief executive for the National Assn. of Church Business Administration, a Texas-based nonprofit that lost 10% of its members because of church layoffs. "Our Phoenix chapter almost went defunct because so many church administrators there have lost their jobs."

Not every church has suffered to the same extent — or at all. A recent survey by May's organization found that about a third of its members were having financial difficulty because of the economy, whereas 40% reported that their budgets were fine or even growing.

The findings echo those in a survey conducted last year of 1,114 Protestant church leaders by the Barna Group, a Ventura-based religious research firm. It found that although one in six churches eliminated jobs, cut hours or reduced salaries, nearly half said the economy had not affected their spending.

Studies during past recessions have found churches to be more resilient than other charitable groups.

"Religion has a very familial dimension to it when it comes to charitable giving," said William Enright, a former pastor who is executive director of the Lake Institute on Faith and Giving at the Center on Philanthropy at Indiana University. "In tough times, people cut their charitable giving … but their local congregation is the last place that they cut."

Enright and others say churches that are struggling financially tend to have underlying issues that predate the recession — changing demographics, large debt or internal leadership upheaval.

The venerable Crystal Cathedral megachurch in Orange County is shouldering all three and is testing its founder's best-known proverb: Tough times never last, but tough people do.

The worldwide television ministry, which the Rev. Robert H. Schuller started in a rented drive-in movie theater in 1955, is in deep financial trouble. Facing a reported $55-million budget deficit and a 27% drop in revenue over the last two years, the church cut dozens of jobs in January, pulled its "Hour of Power" television show from seven stations and canceled its annual "Glory of Easter" pageant.

Church officials blame an aging congregation and the recession for the shortfall. They insist that a family dispute over succession that played out publicly had no role. (Schuller and his son, a pastor and onetime heir apparent, split, leaving Schuller's daughter as the church's co-leader.)

In recent weeks, the Crystal Cathedral was sued in Orange County Superior Court by four large creditors, including an Indiana finance company that says it's owed nearly $2 million for loans the church used to buy electronic equipment.

"There's a lot of hope … that if the economy turns around, this can be all resolved," said Marshall Goldberg, an attorney representing the finance company.

Juliet Noriega isn't as optimistic. She is among numerous smaller creditors owed money for work done on the church's elaborate "Glory of Christmas" pageant. Others include a rancher who provided camels, horses and sheep, a prop maker and a dry-cleaner of costumes.

Noriega has made those costumes for the last 26 years and says she's owed $11,000 for work on December's pageant. Recently, she and dozens of other creditors met with church representatives, who asked them for 90 days to work out a settlement before taking legal action.

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