Tax reform plan reinforces the need for churches to seek alternative income methods

Churches must begin to explore income alternatives with an expected decline in individual giving in 2018 from the pending tax reform plan, along with year-over-year declining church attendance in all mainline Protestant denominations and increasing numbers of individuals with no reported religious affiliation.


Tax code reform legislation is pending a signature by President Donald Trump within the next week or so, and religious institutions may fall victim to this reform. According to a recent study by the Indiana University Lilly Family School of Philanthropy, giving to religious organizations is likely to fall by nearly $4.8 billion in 2018. While many non-profit organizations—including religious organizations—steward gifts on the basis of mission, the itemized charitable tax deduction likely contributes up to 4.0% of individual giving.

This expected reduction in individual giving complicates an already complex decline of the American Christian church. Studies and anecdotal data reveal a decline of overall American Christianity in both church numbers and membership. Within the United Church of Christ, a progressive mainline Christian denomination, its number of congregations has decreased by 28.0% (1,947 churches) in the last fifty years. Within the same period, its membership has declined by an astounding 57.3% (1.183 million). Regardless of denomination or affiliation, the majority of churches are facing similar statistics. The Pew Research Center Religious Landscape study shows that overall church attendance and Christian religious affiliation are both on a significant decline—citing that up to 35% of Millennials select no religious affiliation at all (and attend no church).

While overall numbers of churches and subsequent attendance have significantly declined in the last several decades, those that are members of a church have shown increased levels of attendance and engagement, along with individual giving—evident in a 3.0% increase in charitable giving to religious organizations in 2016. However, with the average age of the mainline Protestant church member to be more than 60 years old, the reliance on an ever-increasing level of individual giving by current church members is not a long-term strategy.

Maria C. Coyne, Executive Director and CEO of the Cornerstone Fund, a faith-based, socially responsible investment firm and church lender, believes that churches have been gifted valuable property and real estate from the height of mid-century American Christianity. “We see churches with valuable real estate who, for the moment, are mostly just utilizing it for Sunday worship,” Coyne says. “Now, more than ever, churches have an incredible opportunity to seize—the opportunity to use their property and land in ways that both enhance their mission and contribute to their bottom line.” The Cornerstone Fund now works with churches, and other religiously affiliated non-profit organizations, to help finance these types of capital building and construction projects, including senior and/or affordable housing, child care centers, health and wellness centers, vocational training and education centers, and mixed-use property development.

The IU study expects at least a 4.0% decline in individual giving to the church next year, and church membership will also decline next year with member deaths and increasing numbers of young people without religious affiliation. While American Christianity is at a complex juncture at this time, the financial viability of churches depends on a church’s willingness to not only reconsider how they grow membership, but also how they grow revenue—in spite of the tax reform plan. Many churches, with medium- to large-size buildings and easily accessible property lots, can begin to explore how to use these property assets to supplement current income streams. “It’s not an overnight solution,” Coyne adds. “But it’s an opportunity for a church to not only keep its doors open, but to also make an even greater impact on the community it serves.”



Ann Poston
[email protected]
(330) 687-8385

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