Church Finances

Before we meet the church planters and explore their financial situations, let’s take a look at the churches they are helping to birth.

More than half of church planters say a significant portion of their congregation is made up of those who are attending church again after having dropped out for a while (54%), and those who are new to church altogether (57%). (Totals exceed 100 percent because planters could choose multiple options.) Other significant groups are young families (39%), low-income attenders (37%) and those who are college-educated (32%). Young adults and families are also more represented than older adults, spiritually mature members and affluent attenders. Low-income attenders (37%) are much more prevalent than affluent attenders (17%). (Keep in mind that this data reflects the leader’s perception of those who attend his or her startup. This is valuable for getting us inside planters’ thinking about their congregations.)

The survey also asked church planters to assess their congregation’s financial situation: Is the church’s income very or slightly inadequate, just sufficient or more than sufficient? Then we ran that set of findings against leaders’ profile of their congregations. As shown in the table, planters whose churches are made up mostly of young families, low-income attenders and young adults are more likely to feel the church’s income is inadequate.

Perhaps surprisingly, the data does not show much of a correlation between insufficient income and churches comprised of people who are new to church. However, serving those with low income, young families or young adults is correlated with strained finances, likely because giving from these attenders is lower and because these groups may require more support from the church in the form of programs or financial help.

One church planter explains:

I’m sure we’ll continue to struggle with financial sustainability and viability because we can’t rely too heavily on significant tithing or offerings from the members and population we are serving. If you’re on welfare and living paycheck to paycheck, we can’t expect you to be averaging $100-200 a Sunday or a month.

Another says, “Some are homeless, some are on fixed incomes, some are on disability. We can get plenty of people, it’s just that a lot of the people we get are coming because they need something, rather than coming to be spiritually fed and then give something back.”

Looking at the overall financial health of their church, more than one-third of planters report that their church’s income is inadequate (27% slightly; 10% very), while half say it is “just sufficient” (51%). Only 12 percent say their church’s income is “more than sufficient.”

Attendance also impacts a new church’s finances. As a church plant grows, particularly from 10 to 50 attenders, new operational and ministry needs may put more strains on churches. Those who report inadequate church income are twice as likely as church plants with sufficient income to have attendance in this middle range. This finding likely indicates that this growing season—from a handful of attenders to 50 or more—is when startups need significant financial investment. They are not yet large enough to be self-sustaining with a base of faithful givers, but are large enough to need funding for ministry expansion.

Most church plants receive income in the form of tithes and offerings (60%) and almost half receive funding from other churches (46%, 60% including “mother” church). Less common sources are non-attending individual donors (30%), grants (19%) and money from friends and family of the planter (19%). A substantial majority (78%) says they are very or somewhat certain of the sources of income their church will have in the next two years, and seven out of 10 (70%) are very or somewhat certain of the level of that income.

Among planters who consider their church income inadequate, eight out of 10 receive tithes and offerings, whereas only 47 percent of churches with sufficient income receive tithes and offerings. On the other hand, more than half of churches with sufficient income receive income from another church (54%), while only one-third of churches with inadequate income take in funds from this source (33%). It appears that churches with inadequate income are tapping a wider variety of sources to meet their financial needs: 47 percent receive funds from individuals who do not attend the church; 29 percent get funds from the church planter’s personal network; 23 percent receive funds from a mother church; and 24 percent have a church planting grant.

In sum, churches with insufficient income tend to draw from many more sources than those with sufficient income, which suggests they take in smaller amounts from a wider variety of supporters. This adds to planters’ administrative burden while still leaving them insufficiently funded.

Most planting leaders believe funding will play a major role in the future health of their ministry: Three quarters agree that “how much money a new church can raise is extremely important to whether it will survive” (74%).

An in-depth statistical analysis of the data reveals that there is a correlation between church stability—a combined variable consisting of church attendance and the percent of the church budget comprised of tithes and offerings—and the sufficiency of the church’s current level of income.

Further, church stability is best predicted by a higher pastor salary, less personal debt, a location with a less dense population (rural is more stable than urban) and sustained funding sources (i.e., that do not have an end date). In fact, statistical analysis indicates that having an end date to funding sources is harmful to the pastor and the church according to every related factor. These effects are observed regardless of the age of the church or the pastor. Rather than providing clarity, funding with an expiration date seems to be a significant burden on church planters.

Planters and
The Church’s Finances

Planters’ primary sources of household income are a salary (62%), another job (16% are “bivocational”) and grants and fundraising (22% total). Throughout this research monograph we refer to leaders according to these income categories—bivocational, salaried and fundraising—because these different situations often correlate to distinctions between church planters’ perspectives.

For example, when it comes to the financial health of church plants, it can be difficult to separate the church from the planter. More than one- third of church planters connect their own financial situation to that of their ministry.

While least likely to agree with the statement, “It’s hard for me to differentiate between my personal financial situation and my church’s financial situation,” bivocational church planters have the greatest tendency to contribute personal funds to their church’s finances regularly and often. They appear to make the heaviest personal financial investment in the ministry, while salaried leaders make the lightest personal financial investment.

Church planters often contribute their own money (beyond their tithes and offerings) to meet the church’s expenses. Almost all new churches receive operational subsidies directly from the church planter (91%), though most leaders say they “rarely” use personal money for church expenses (62%). About three out of 10 planters regularly (18%) or often (11%) provide such subsidies.

One church planter remarks how difficult it is to keep his two children in college because “so much of our money goes to keep our church plant going, so much of our personal money.”

Another cites the needs of the congregation, which have a personal impact on the church planter: “The church is very demanding. The people that we work with tend to be poor people that have a lot of needs in their lives. I think our children have to sacrifice a lot for us to meet the needs of other people that are here.”

In one sense, the financial burdens of the church planter are a subset of the greater administrative burdens he or she carries, which take up about 20 percent of his or her time. In addition to managing finances, church planters may oversee facilities, supervise human resources (staffing, benefits, etc.), manage an office and oversee fundraising operations, including writing support letters and grant requests, creating status reports for supporters and keeping records.

In addition, a church planter’s status as clergy and a church’s status as a religious organization lead to unique tax exemptions that can be helpful— but that also add to the administrative burden.

Most planters are responsible for primary ministerial leadership. This includes recruiting and training a leadership team and developing and managing various ministry programs. One planting pastor comments:

Sometimes I just say, “Gosh, if somebody else was thinking about the kids’ church programming, and the worship, I think it would free me up.” I’d have the brainpower and emotional space for other things. I could spend more time doing pastoring and connecting with people one on one.

Another laments that sometimes she finds out after the fact that members of her congregation had a pressing need she did not know about: “And they’ll say ‘Oh, I don’t want to bother you.’ And it’s so painful for me to hear people think, ‘Oh, she’s so busy that I wouldn’t even want her to invest her time in me.’”

Church Location

The current trend appears to be a concentration of church startup efforts on medium-sized cities and inner suburbs on the edge of major metropolitan areas. By far, most church plants are in cities or dense inner suburban areas.

Ministering in cities presents unique financial challenges for many reasons. Urban centers and their surrounding communities are often diverse, but may be segregated by race, education level, economics, age and cultural differences. Urban planters are likelier to have diverse congregations with varying levels of income and needs, as well as higher operational and facility expenses, than their suburban or rural counterparts. Plus, residents of urban centers, no matter their level of income, live in environments with a higher cost of living; this puts extra strain on a church planter’s personal finances.

Church planters in cities and inner suburbs feel the most strain on their financial situation, likely due in part to income that insufficiently covers the cost of living in those areas. Also note that planters in outer suburbs, small towns and rural areas more often consider their personal financial situation above stable.

Taken together, the data shows that stability is often harder to achieve in urban locations, due to higher costs of living and the nature of the populations served, among other possible factors. Yet most startup churches are being planted in urban or inner suburb neighborhoods. Given the suburban flight that took place over previous decades, many denominations and other organizations are now focusing their church planting efforts in cities, where there is both a shortage of vibrant churches and an urgent need among growing populations for Christ’s presence in community.

This study strongly suggests that supporting organizations should recognize the higher costs associated with these startups and fund church planters accordingly.