News and analysis
March 30, 2011

Donations to Churches Rebounded Slightly Last Year

Giving to churches rebounded slightly in 2010 after two years of steep decline, but churches fear efforts to trim tax breaks for charitable donations could be an obstacle to the post-recession recovery, according to a new study.

Some 43 percent of churches say their donations increased in 2010, according to the survey of 1,500 church leaders. Only 36 percent of the groups reported gains in 2009.

But the survey, which was conducted online in February and March, found that church leaders are concerned that giving could suffer if the federal government moves forward with plans to limit tax breaks, including those for charitable donations, as a way to rein in the country’s ballooning budget deficit. President Obama as well as several bipartisan committees have suggested a number of ideas to reduce the value of charity tax write-offs. Some 91 percent of church officials said that changes to the federal tax code would hurt their churches, and 30 percent said that impact would be “significant.”

“We will be under siege the next few years, as the government does what it can to get anything in the coffers,” said Brian Kluth, founder of Maximum Generosity, a Christian publishing company that conducted the survey along with Christianity Today magazine and the Evangelical Council for Financial Accountability. “If the government’s plan to change the rules on charitable tax deductions goes through, giving to charities and churches and the help they give to others will likely be negatively impacted at a time it is needed the most.”

Long-Term Decline

Americans gave roughly $100-billion to religious charities in 2009, about a third of the total $300-billion of philanthropy given each year, according to Giving USA, the annual study of charitable donations

But the percentage of income that Americans give to their churches has been in a long-term tumble. Household giving to churches has dropped from 3.2 percent of income to 2.6 percent, according to a 2010 study by Empty Tomb, in Champaign, Ill., that tracked religious giving through 2008.

“We are in a 40-year decline,” Mr. Kluth said. “We now give less than we gave during the Great Depression. We are now in what I believe is a growing crisis.”

Mr. Kluth is a pastor by trade but left his pulpit three years ago to start Maximum Generosity. His organization started conducting the church survey in 2008 to try to verify news-media reports on faltering church fund raising that he says were based only on anecdotal evidence.

But his research found that the news reports were startlingly accurate.

“What is happening is unprecedented in our lifetime,” he said of declining giving to churches. “Even though there is a little bump up this year, it is after years of rising flood waters. A tsunami kind of hits you quick; this builds up over time.”