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Church economic advisers assess recession's impact

United Methodist investments lost significant value in 2008, and church finance leaders say giving by individual congregations is uncertain due to the
stock market's decline and weakness in the financial sector.
A UMNS photo by John Goodwin.

Dec. 12, 2008 | NASHVILLE, Tenn. (UMNS)

The United Methodist Church faces significant challenges in 2009 under a U.S. recession, but financial leaders project a recovery to begin in the latter months of the new year.

An economic advisory committee of the denomination's finance agency—made up of economists, financial analysts, researchers and church leaders—gathered Dec. 5 in Nashville to assess the church's financial status.

"Each recession is unique, so predicting the duration of the current recession is inherently difficult," said Don House, an economist and committee member from College Station, Texas.

"Each recession is unique," says
economist Don House.
A UMNS file photo by Marta W. Aldrich.

"We have a better understanding of what policy measures are required at the federal level, and we believe there is a clear intention among policymakers to implement effective measures."

Church investments have lost significant value, and finance leaders say giving by individual congregations is uncertain due to the stock market's decline and weakness in the financial sector. However, they note that the church has faced recessions before.

"We are all concerned about the financial future of our local churches and our denomination as a whole," the General Council on Finance and Administration said in a statement issued on Dec. 9. "Although this time will not be easy for many, and will be very difficult for some, the assembled experts anticipate an economic recovery beginning in the latter months of 2009."

Before the stock markets became volatile at the close of September, United Methodist giving for 2008 had been generally on target. Finance leaders were hopeful but less sure about giving for the final months of the year, when local churches, regional conferences and the general denomination typically receive 40 percent of their annual income.

The denomination's $642 million budget for the next four-year period—approved by General Conference last spring before the economy began its downward spiral—is scheduled to take effect Jan. 1. Church leaders have said they are prepared to make adjustments, if necessary.

"GCFA is constantly monitoring all economic indicators," said Bishop Lindsey Davis, president of the council.

"Indicators show us that the current connectional giving is still strong through 2008. (The) 2009 (year) will present significant challenges, but our boards and agencies are prepared to make any necessary adjustments. Our thanks to the faithful members of The United Methodist Church who continue to give generously even during these uncertain times."

Looking backwards

In the United States, giving at the local church level tends to decline during recessions when adjusted for inflation, and then increase in the years following, according to information provided by GCFA.

During the recession of the late 1970s and early 1980s, giving dropped 2.43 percent from 1978 to 1979, then declined another 3.11 percent in 1980, and another 0.31 percent in 1981. Giving then increased an average of about 1.9 percent through 1989.

During the recession of the early 1990s, giving dropped about 1 percent in 1990, then increased an average of 2.12 percent over the next 12 years. Following the recession of the early 2000s, giving leveled off again but began increasing again in 2003. Over the last 30 years, local church giving has increased an average of 1.28 percent, adjusted for inflation.

Treasurer Moses Kumar and Bishop Lindsey Davis lead the GCFA board
meeting in November in St. Louis.
A UMNS photo by Marta W. Aldrich.

Nevertheless, the committee expects modest shortfalls in payments to the general funds apportionment in 2008 and 2009, similar to those experienced during past recessions.

"Hope is always a primary focus for persons of faith in times of crisis," said Moses Kumar, chief executive and treasurer of GCFA. "Our pulpits and pews are filled every Sunday with messages to maintain hope during a time that is seeing the greatest volatility in the U.S. markets in recent decades."

The denomination's 2009-12 budget was built around the four areas identified by church leaders as priorities: engaging in ministry with the poor; stamping out the diseases of poverty by improving health globally; starting new churches and renewing existing ones; and developing principled Christian leaders.

"We must look with a theological eye toward the use of all of our resources, letting both our visions for ministry and the example of Jesus' mission—of bringing good news to the poor, letting the oppressed go free, and proclaiming Jubilee—shape the use of our resources," said the Rev. Dustin Petz, pastor of Goodland (Kan.) United Methodist Church and a member of the committee.

"This will mean we will have to be more strategic with the employment of our time, our finances and our energy. Making these changes will be difficult, but we now have an opportunity to see the current context as a chance to be more effective at making disciples for Jesus Christ and transforming the world."

*This story was based in part of a news release and a statement by the United Methodist General Council on Finance and Administration.

News media contact: Marta Aldrich, Nashville, Tenn., (615) 742-5470 or newsdesk@umcom.org.

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