Report: Declining Attendance, Real Estate Slump Hurting Churches

Thursday, 03 Jul 2014 11:57 AM

By Drew MacKenzie

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The number of churches in the United States has been declining in the past few years ever since the housing bubble burst and attendance figures dropped, The Atlantic reports.

The increase in the sale of churches and other houses of worship began in 2008 when the property boom came to an abrupt halt as parishioners were hit by the downturn in the economy and could not afford their mortgages or their church dues and donations.

Mary Raphael, co-owner with her husband Dave of Raphael Realty, a southern California realty firm specializing for 35 years in sales of religious properties, said that struggling churches took money out of their reserves to keep afloat, which ended disastrously in many cases.

"So many people were losing their jobs, and churches can't continue for years on their reserves," Raphael said. "Tithings to churches had declined so much for such a long period that a number of churches used up reserves and refinanced properties. We had foreclosures on churches."

A recent report by Giving USA revealed that donations to smaller churches had fallen 10 percent during the past year and are still a long way from prerecession-era donation rates.

Raphael noted that the problem has been compounded by the fact that banks do not like to lend money to houses of worship for fear their customers might not want to keep their savings at the same facility used by a certain religious group.

"Lenders avoid [churches] since it's bad public relations," she said, adding that banks have a difficult time keeping tabs on church finances. "It makes it very difficult. It's hard to document income for churches since they keep their own records."

According to The Atlantic, these financial problems have resulted in churches defaulting on loans, being forced into foreclosure, and having to sell their properties.

"The first 32 years or so, we never thought about asking if your loan is current or in default," Raphael said. "Now if a church calls, that's the first thing we ask."

The major problem facing church finances is the reduction in attendance. For example, Roman Catholic parishioners have plunged from 75 percent in 1955 to 45 percent, according to a Gallup poll in 2009.

Southern Baptist and evangelical churches have also had notable drops in attendance, although Pentecostal churches have seen an upswing in their parishioner counts, The Atlantic said.

Christian Science groups have also reported a slowdown in attendance, while Korean-based Christian congregations have seen an uptick, and Mormonism is the fastest-growing religion in America.

However, Raphael revealed that some churches have found that the answer to their current financial woes is to sell space in their properties.

"We have lots of people who want to rent or share buildings," she added. "They allow someone to use it Sunday afternoon when they're not using it, or weekdays or evenings. They might also rent out to AA groups or counseling groups."

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