Introduction

The COVID-19 pandemic caused major disruptions to religious congregations, including their finances. While the full impact of the pandemic on congregational finances will not be clear for many years, the purpose of this article is to highlight some recent qualitative findings from in-depth interviews with pastors, which provide insight into how and why the pandemic has impacted congregational finances and how pastors are responding. Fiscal woes of congregations are not new (Wuthnow 1997) and the last major economic downturn in the United States, the Great Recession, saw the median income of congregations decrease 5% from 2006 to 2012 (Chaves and Eagle 2015:5). And while we are still in the early days of understanding how the COVID-19 has impacted congregations financially, this remains an important research topic.

Several commonalities have emerged from the survey research conducted to date (Bird 2020; Lake Institute on Faith & Giving 2020; Lifeway Research 2020; Manion and Strandberg 2020). Most studies show a great deal of heterogeneity in the pandemic’s impact on giving. While estimates vary across studies, most show that roughly equal proportions of congregations have reported increases in giving, little or no impact on giving, and declines in giving. Most studies show that larger congregations saw fewer negative impacts from COVID on income and expenses. Larger churches were more likely to have already established online giving platforms (Bird 2020; Lake Institute on Faith & Giving 2020; Lifeway Research 2020) and some evidence suggested that those with online giving options in place before March 2020 weathered the disruptions more successfully (Manion and Strandberg 2020). Larger churches appeared more likely to have applied for a Paycheck Protection Program (PPP) loan (Bird 2020; Lifeway Research 2020), which, for those who re reduced the financial impact of the pandemic on churches. Smaller churches also appeared more likely to report declines in giving, especially early in the pandemic (Lifeway Research 2020).

As the pandemic dawned, we recognized the need for qualitative research in this area. Qualitative studies of congregational giving can provide valuable ‘on the ground’ accounts of economic life in congregations (Mundey et al. 2019:409). To this end, we initiated in-depth interviews with congregational leaders to understand the lived experiences of pastors during COVID-19. These interviews provided a more detailed picture of COVID-19’s impact on clergy and congregational finances than would have been possible using survey data and allow us to speak to the complexities of congregational finances during this dynamic and evolving time. In doing so, this research also contributes to understandings of the economic practices and financial dynamics of congregations, a topic which is generally understudied (Mundey et al. 2019). We paid particular attention to how experiences varied across both large and small congregations (which we defined as congregations with 100 or more regular adult attenders versus fewer than 100) and to the variety of strategies pastors used to manage church finances. While the pastoral role involves both ministerial and managerial practices and leadership (Kuhne and Donaldson 1995), many pastors receive little or no training in fiscal and business administration (French-Holloway 2020). Because of this, we also attended to how pastors talked and felt about congregational finances several months into the pandemic. Because of the unprecedented impact of the pandemic on congregations, this research is largely descriptive and provides an important base from which future research can build larger, more theoretically oriented contributions.

Data and Methods

Sample

This study draws from in-depth interviews with 50 pastors from the United Methodist Church (UMC) appointed to serve 70 congregations in either of the two UMC Annual Conferences in North Carolina. Because our research team had conducted extensive research with UMC clergy in North Carolina in the past, we leveraged these relationships to recruit participants. Most participants (39) were sampled from the 2019 Clergy Health Initiative Statewide Survey of United Methodist Clergy, while an additional eleven were recruited by contacting pastors enrolled in continuing education courses at Duke Divinity School. To gather a range of ministerial experiences, we purposively sampled across three different groups based on number of years in ministry. From the Statewide Survey, a total of 134 potential participants were identified and invited by email to participate in the study. Potential participants were contacted a maximum of four times before being removed. Of the 84 participants not interviewed, nine declined participation, three were ineligible, four were unable to be scheduled, and the remaining 68 did not respond to emails and/or calls. Among those recruited through continuing education courses, a call to participate in our research was distributed to about 150 individuals, 14 of which responded promptly and 11 of which were able to be interviewed.

As shown in Table 1, the 50 pastors in our sample were 84% white, 52% male, and, on average, 49 years old. A little more than half (52%) were ordained elders with the remaining 48% serving as local pastors. About one-third (32%) of these pastors were appointed to serve more than one congregation, with 12 pastors (24%) serving a two-congregation charge and 4 pastors (8%) serving a three-congregation charge. In Table 1, we also report key characteristics of the 70 congregations served by these pastors. We classified 74% as small congregations, meaning they had fewer than 100 regularly attending parishioners; and 63% of the congregations as in rural areas of North Carolina, in accordance with the Rural–Urban Commuting Area Codes of the USDA (USDA Economic Research Service 2020). Comparing to all UMC clergy in the state, our sample included a larger proportion of women (46% in our sample were clergywomen, whereas only 32% of all UMC pastors are women in North Carolina) but our sample was broadly representative in terms of race and age. Because we oversampled local pastors (48% in our sample versus 30% of pastors statewide are local pastors), a larger proportion served more than one congregation (32% vs. 23%) and were in rural areas (63% vs. 54%).

Table 1 Pastor and congregation demographics
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The UMC is a useful case study for several reasons. First, it is the third-largest denomination in the United States, involving nearly 6.5 million members, 30,543 churches, and 38,308 clergy (General Council on Finance and Administration of the United Methodist Church 2018) and representing 9% of all religious congregations in the country (Chaves et al. 2020). Second, UMC denominational leaders encouraged congregations to abide by public health guidelines and UMC congregations, like most churches in the US, generally did so: they ceased indoor gatherings and moved to a remote, online format when possible (UMC NC Conference 2020a). At the same time, denominational officials left considerable leeway for pastors to modify practices in line with their congregation’s specific needs and available resources. As 82% of American religious congregations are a member of a denomination or convention (Chaves et al. 2020), the UMC offers an appropriate case study of individual congregational finances in the context of a larger denominational setting. Further, by focusing on pastors in one denomination in a single state, we were able to consider how pastors under similar guidelines and mandates used divergent strategies in the wake of COVID-19.

United Methodist churches are led by either ordained elders or local pastors. In North Carolina, approximately 70% of pastors are elders and 30% are local pastors. Ordained elders typically serve larger congregations and are guaranteed an appointment for the duration of their careers. Local pastors are licensed to serve a single congregation and are not guaranteed continuing positions. Because of the differences both in terms of job structure and congregational characteristics, we interviewed equivalent numbers of elders (52%) and local pastors (48%).

Pastors were interviewed between June 2020 and January 2021. Prior to our interviews, a federal court overturned an executive order that limited indoor religious gatherings in the state, which meant congregations could set their own COVID protocols (Bridges 2020). The state UMC Annual Conferences did not issue direct orders, but instead issued recommendations to congregations to honor public health guidelines, encouraging mask-wearing and social distancing (UMC NC Conference 2020a, 2020b; UMC Western NC Conference 2020). Over half (54%) of our interviews took place during June, July, or August of 2020, coinciding with the second major “spike” of COVID-19 nationally. Another third (34%) of our interviews took place during September and October of 2020, coinciding with a decrease in COVID-19 cases in North Carolina and a corresponding ease in behavior restrictions. The remaining 12% of our interviews took place between November 2020 and January 2021, coinciding with the third major “spike” of COVID-19 (Johns Hopkins n.d.). While COVID was a fluid and evolving situation, we did not find major temporal variations in the patterns we identify in the results below.

Analysis

All participants provided informed consent prior to the interview. Interviewers, both of whom identified as women and white, were trained in qualitative interviewing and were not affiliated with the UMC. Interviews were conducted by Zoom or telephone and were audio-recorded. Interviews followed a standard guide that included open-ended questions with specific probes (see online supplementary material) to gather information on pastoral and congregational experiences during COVID-19. As part of the guide, pastors were asked a series of questions about church finances. The interviews were transcribed and identifying information removed prior to analysis. Participants received a $25 incentive for completing the interview. All study procedures were approved by Duke University’s Campus Institutional Review Board. All names used in this manuscript are pseudonyms.

Transcripts were coded in NVivo 12 using applied thematic analysis (QSR International Pty Ltd. 2018; Guest, MacQueen, and Namey 2011). First, transcripts were coded with a structural codebook where six transcripts (12%) were reviewed by the research team to establish inter-coder reliability. Emergent codes and additional sub-categories of structural codes were then incorporated based on discussion and mutual agreement amongst the research team. The remaining transcripts were then individually coded based on the revised codebook by three analysts. Questions that arose while coding were discussed amongst the analyst team. Each analyst created finance-specific cross-case memos to identify and explore emergent themes.

We analyzed the transcripts at two levels of analysis: at the pastoral level and at the congregational level. At the pastoral level, we analyzed the responses of the 50 participants for their individual experiences, including personal stress, sacrifice, and emotions regarding congregational finances during COVID-19. At the congregational level, we analyzed the information offered by the pastors concerning the 70 total congregations our respondents led, including the organizational status and strategies used to function financially during COVID-19. We report results at both levels of analysis and allow our findings on the pastoral level to inform our findings on the congregational level, and vice versa. As we did not find a relationship between when we conducted interviews and pastors who reported their congregations were struggling financially, we are confident that our results are not merely capturing congregations that had more month of exposure to the pandemic.

Results

The congregations led by pastors in our sample varied widely in their financial well-being in the context of the COVID-19 pandemic and associated social and economic challenges. However, the overall impression given by pastors was of congregational financial stability. Table 2 shows the characteristics and financial experiences of our sample at the time of our interviews. Of the 70 congregations led by the 50 pastors in our sample, 53 (76%) were doing well financially, financially steady, or had only experienced marginal declines in their overall financial position because of COVID-19. This group of congregations experienced some fluctuations in member donations and organizational expenses, but these did not significantly affect their organizational functioning. The remaining 17 congregations (24% of our sample) seemed to be in a more vulnerable financial position. These congregations experienced declines in giving alongside increased congregational expenses and were forced to implement budget cuts such as eliminating staff positions or not sending apportionments (money requested by the annual conference to support denominational operations). Further, six congregations in our sample (9%) seemed to be in danger of closing if their financial situations did not significantly improve soon.

Table 2 Congregational Finances in the Context of COVID-19 (n = 70 a)
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However, the broad trend of financial stability among congregations in the second half of 2020 masks the more complex and varied stories of individual congregation’s financial situations and the different strategies pastors and staff used to manage them. While the conditions of the pandemic disrupted the habitual financial functioning of congregations, such as the ease of passing the offering plate from pew to pew, and required additional expenses, such as technological equipment for socially distant worship, it also eased some congregational financial difficulties. While about half (47%) of congregations reported declines in parishioner donations and 16% of congregations reported increased expenses in the context of the pandemic, 43% of congregations received a large, unexpected influx of money, such as a PPP loan, other grants, salary support from the denomination, anonymous donations, or a memorial after the passing of a church member. Further, 14% of our congregations commented on the natural reduction of congregational expenses, such as a decrease in building utilities from lack of use. For many congregations, these various changes in income and spending netted out to a neutral financial impact of COVID-19. The following sections lay out the complex ways that congregational leaders navigated the financial circumstances associated with the COVID-19 pandemic.

Small and Large: Divergent Pathways to Financial Stability

Most congregations did not experience a net financial impact, or only experienced a small decline. Many of the pastors we spoke with, like Alice, pastor of two small churches, reported that finances were not “a big concern” at the time of the interview. Ben, who was appointed to two small, rural churches told us congregational finances have “not been an issue;” Harry, pastor of a larger urban church said finances “are not one of my headaches;” and Greg, who led a larger, rural church stated finances “have not been the thing that has woken me up at night with sweats.” However, we found the underlying financial realities differed across size.

Small congregations generally had fewer available strategies for managing congregational finances, as their budgets were dominated by their pastor’s salary and building expenses. For example, John, the pastor of a small, urban congregation reported that the pandemic had, at the time of the interview, not “really impacted us that much.” He told us that “expenses are down because operational expenses are down,” and “being an older congregation, they are tithers.” Mostly retirees and essential workers (such as teachers and construction workers), congregants were doing okay financially and continuing to give. John told us that his congregation considered implementing online giving but after some research, lay leaders felt the fees related to it offset any potential benefits. This congregation also opted not to apply for a PPP loan because, as John told us, they could not “in good faith” justify needing it, plus, he told us, “With all the hoops to jump through … we didn’t even bother.” Despite describing his congregation as “unaffected,” John also reported having to lay off the congregation’s single musician because she was unable to work due to pandemic-related health concerns. Taken together, John’s congregation was able to manage due to lowered expenses, a small overall budget, and a membership of mostly retired members whose incomes were unaffected by the pandemic. However, John’s case also revealed how smaller congregations were more constrained in what strategies they could use to manage finances. In John’s congregation, online giving was seen as too costly and applying for a PPP loan, too difficult.

Larger congregations in the “neutral zone” reveal a somewhat different picture of congregational finances during COVID. For example, Chris, pastor of a larger, urban church, described his congregation as one that “has some means.” At the time of the interview, he reported, “bottom line is, our finances are strong.” In terms of giving, he reported putting out a call early on to maintain giving, reminding congregants that the “church has not stopped” and congregants “stepped up.” While some members did “pull back on their giving,” this drop was offset by increased giving from others. Chris reported receiving a large, one-time contribution of $25,000. Chris’ congregation also applied for and received a PPP loan and decided to temporarily stop paying apportionments to their Annual Conference until they reopened for in-person worship. In terms of staffing, Chris reported cutting two full-time staff positions prior to COVID’s onset for reasons unrelated to the pandemic. However, rather than filling these positions after the pandemic began, he instead hired only for a single part-time position, balancing his congregation’s changing budget and needs in the context of COVID. Chris mentioned additional expenses related to the pandemic including thousands of dollars to buy video equipment to live stream services both during COVID and (hopefully) beyond. Like many other congregations in our sample, Chris reported both increased and decreased (or offset) expenses and some decline in giving (in this case, offset by large, one-time gifts). This congregation’s budget was much larger than John’s, which meant he was able to use a broader range of strategies to manage finances.

These two examples point to important similarities and differences in small versus larger congregations who each reported their congregations were weathering COVID without major financial impacts. For many of the pastors we spoke with, decreased or offset expenses were important (even essential) for ensuring their congregation’s financial stability during the pandemic. Sarah, for example, reported that her small, rural congregation was “teetering on the green” mostly due to longer-term declines in giving being offset by declining expenses because of the pandemic. Harry, who pastored a larger, urban church, likewise told us that his congregation was “only meeting our target now due to this reduced budget … I don’t think we would be meeting our target if everything was just normal.” Likewise, Tom, pastor of a larger congregation, told us that he “really [has] not had any stress or worry related to finances,” but also reported that without the PPP loan, “we would be really tight in terms of our budgets … with it, we’ve got a little more space and breathing room.” Both small and large congregations relied on reduced budgets and influxes of money (from loans, grants, and gifts) to maintain a relatively neutral financial position during the pandemic. In addition, in both cases we saw evidence that the socio-economic composition of congregations mattered a great deal for maintaining financial stability, albeit in different ways. Congregants at John’s church were mostly older and on fixed incomes. Unaffected by the pandemic, they continued to tithe. Chris’s church, on the other hand, was comprised of higher-income and white-collar workers whose incomes were also largely unaffected. In this case, one congregant “of substantial means” gave enough to offset small decreases in regular giving.

There are other important differences as well. For example, while pastors of both large and small congregations reported simultaneous decreases and increases in expenses because of the pandemic, there were notable differences in the nature and scale of the expenses. Pastors of small congregations reported increased expenses such as having to buy more stamps (for mailing information and materials to congregants), cleaning supplies, and/or software for running online services (e.g. Zoom or video-editing software), while pastors of larger congregations, like Chris, reported purchasing relatively expensive video and audio equipment for online and/or outdoor services. Reduced expenses referenced by pastors of smaller congregations included lower utility bills or a reduction in the “coffee and doughnut” budget, while pastors at larger congregations were more likely to mention laying off staff, reducing salaries, or cutting programs. These differences reflect discrepancies in the budgets and resources of small and large congregations that existed before pandemic, and which constrain the kinds of strategies and approaches pastors could use to manage congregational finances during COVID-19.

The pandemic revealed other disparities between large and small churches. Pastors of small congregations told us they would have liked to spend more money on technological equipment and/or personnel support in the wake of COVID-19 and some expressed frustration regarding the vast differences between what they and their peers at larger congregations were able to do. Carol, pastor of a small, rural congregation, told us that while many churches “went to parking lot services … it's difficult for us smaller churches to do that because we don't have the equipment … many of us don't have the funds either to buy it or rent it.” Even for congregations, like Carol’s, who were doing “okay financially,” congregants “don’t see a need to buy something that’s going to be for this one event, COVID, that we probably would never use again.” While a larger congregation, with a bigger budget, may not have to worry about the cost of a large tent for outdoor services, or an outdoor sound system, these kinds of purchases represent a more substantial portion of a smaller church’s budget. Ultimately, Carol felt disadvantaged in comparison to other pastors, like Scott, the pastor of a larger church nearby, “He's got the resources, and so my folks were watching him on TV, which kind of bothers me, because I didn't have comparable resources. I couldn't do anything like that.” Carol’s experience highlights the financial constraints pastors at small congregations faced as they responded to COVID-19.

Outliers – Some Congregations Struggle, Some Thrive

While pastors generally indicated overall financial stability and a sense that finances were not as bad as expected, we also heard from pastors who reported their church’s finances had improved after COVID and from others, where the situation was significantly worse. Consider Rusty, a multi-charge pastor in a rural area, whose larger church was doing well financially. Rusty reported that the congregation was in a good financial position before the pandemic with a one-month “cushion” to help offset any declines in giving or rising expenses. Moreover, giving increased during the pandemic:

We're actually exceeding what we did last year. The giving has been through the roof. I made reference to the one gentleman who gave us $5,000. We've had other gifts like that have come through. So, in terms of just outright giving to the church, things have never been better.

Rusty expressed pride in the financial successes of this congregation and considered that he, personally, “must really be doing something great to get all this giving during the pandemic.”

Other pastors also reported positive financial situations. Arthur’s small, rural congregation, for example, went into the pandemic in a strong position—they ran a surplus for the past 10 years and then exceeded all expectations after the onset of the pandemic. The money collected through the offering was up by 20% and the congregation also received two estate gifts since the pandemic began. Arthur told us: “Our church finances are doing better than they've ever done.” Mary, described her larger, urban church as “rocking it,” due to a combination of increased giving and decreased expenses. Chandler described his congregation was experiencing a financial “revitalization,” a trend that began pre-COVID but continued unaffected through the pandemic period. In fact, he encouraged the congregation not to apply for federal financial assistance noting that, “We don’t need it.”

At the other end of the spectrum, we heard from pastors who reported more dire financial situations. Notably, five of the six congregations we identified as struggling were small. For example, Rusty’s other two, small churches were struggling financially before the pandemic and did not have any financial cushion. The tenuous financial position of both churches was exacerbated in the wake of restrictions on in-person gathering due to COVID-19, as congregants at both churches felt uncomfortable giving by mail or online. Rusty expressed fear regarding the future of these two churches: “If a month goes by and there's no giving, there's real trouble.” For Judith, a pastor at two small, rural churches, finances were down prior to the pandemic and with giving down during the pandemic, “[the church’s] finances are not doing good.” Lauren, who led a small, rural church shared a similar situation: “We're not doing good. We weren't doing all that great before COVID. We're not doing good right now.” And while two of Ed’s three small, rural congregations were “fine financially,” his smallest congregation was “struggling right now financially just to meet their basic things.” Already in a precarious position at the start of the pandemic, and without any financial cushion, even short declines in giving could spell disaster for small congregations like these.

New Strategies for Managing Finances During COVID

Pastors also reported implementing new strategies for soliciting and collecting donations in the wake of COVID-19. Pre-COVID, giving often occurred during in-person worship services each week. While the physical “passing of the plate” was becoming less common pre-COVID, giving still often occurred during weekly worship services (King et al. 2019). Without the weekly “nudge” to give experienced during in-person worship services, pastors reported having to be more explicit and direct to maintain pre-COVID levels of giving.

Nearly a quarter of the pastors we spoke with (n = 12) reported being more intentional about soliciting donations. Burt, a pastor of a small, rural church, reported he started reminding congregants to give in line with pre-COVID rhythms: “I put something on the first of the month that said … ‘This is the first of the month. If this is the time that you are going to tithe, please make sure you do and send it to this address.’” Carolyn told us that in response to “a dip initially in our giving,” her larger, urban congregation “put out videos from our treasurer and lay leaders to sort of encourage people [to give].” Rose, pastor of three small, rural churches, shared that, in the wake of COVID, she added “a time to specifically pray for the offerings and the tithes” during the worship service. These explicit reminders to give were necessary because parishioners no longer had the normal cues associated with in-person worship prompting them to give. As one pastor, Paul, told us: “Most people still recognize the importance of giving, it's just harder to remember when you don't have a plate right in front of you.”

Pastors also reported sharing more details about the congregation’s financial situation and financial needs with congregants. Sarah, pastor of a small, rural church, said she tried to

be very clear about our finances … a lot more intentional, I reported giving every week, more than we did before, and with more detail than we had before. And named the places where we had positive things so we could build on that.

Joe, pastor at a larger, urban congregation, shared a similar sentiment,

We have been very clear in communicating to people: this is what's happening, this is what we're doing, here's how you can continue to contribute. We've been very, very transparent. Entering this calendar year, we really increased the level of communication and transparency around finances. So then when we began to [say] folks, “Okay, this is what we need you to do,” they were ready to embrace that. Another pastor told us that he reminded congregants “to give online” each week, and said he tried to do so “in a really positive tone,” emphasizing both gratitude for their support and linking giving to the congregation’s ability “to keep doing the ministry that we're doing.” Josh, pastor of a small, rural church, told us he “made a PowerPoint slide for the accounts … our year-to-date current and year-to-date needed are available so people can see that when they come to church. And then, when they’re giving, they can know where we are.” These responses suggest that pastors felt the need to provide additional justification for giving in the wake of the pandemic, reminding congregants, as Carolyn did, “even though we're not meeting face-to-face, the work of ministry is still going on.”

We also found that pastors and congregants were using a broad range of methods for collecting donations during the pandemic. Notably, our interviews suggest that online giving was not the only and often not the primary means of giving during this period. Only one-third of congregations in our sample mentioned using an online or electronic mode of receiving donations. Preferred methods of giving were not merely related to the average age of participants, or rural/urban divides. Rather they were more often framed by pastors as a matter of preference. Alice, a pastor of two small congregations, one urban and one rural, told us, “In the rural church, my experience has been that there are very few people who are interested in doing online stuff anyways, so I haven't bothered to try to increase our presence in that way.” In other cases, after scrambling to implement online giving, some pastors, like Ben, who served two small, rural churches found that it was not “adopted at a super high rate” or, Wade, pastor of a large urban church that “it was not used much.” Even in congregations that saw an increase in online giving post-COVID, such as Danny’s larger, urban church, this method still accounted for just “half of total giving” at the time of the interview.

Rather than a simple move from in-person to online giving, our interviews suggest that pastors of both rural and urban congregations expanded the number of ways in which people could give. Joe, pastor of a larger, urban church, for example, told us,

Well, we had online giving previously, and some people utilized that. Now significantly more people are doing that. We made sure that people knew that they could mail in contributions and told them how to do that, but we also … set up an offering plate and sent a picture to folks and said, ‘If this is meaningful, if the act of placing an offering in the offering plate is meaningful to you, this is how you can do it.’ My day in the office is Friday … I probably have two or three people who come by … and they drop it in.

To accommodate the diverse preferences of congregants, Joe set up several different ways in which they could give, including an in-person option for those who felt that physically placing the offering on the plate was an important part of the practice of tithing.

Like Joe, Alice reported her congregation had an online giving option which “a few people” used. However, her congregation also collected checks in other ways: “Our finance committee people … some of them have driven around and picked up checks … in one church, the financial secretary doesn't lock her car at night, and people put checks into her car.” Judith, pastor of two small, rural churches, reported that a congregant, who lives “smack in the middle of the community … collects the tithes” from people in the area. In other cases, congregants brought their checks directly to the church. Pauline, for example, pastor of two small, rural churches told us that, “People have had a key to the church, go in and stick it under the treasurer's blotter in her office.” Sarah, the pastor of a small, rural congregation, reported holding “drive through prayer” times every other week. This practice provided an opportunity to connect with congregants but was also an avenue for parishioners to give in-person. “Those consistent givers needed that,” she told us. These examples demonstrate the myriad ways in which congregants are giving under the context of COVID and the creative solutions pastors devised for maintaining the practice of giving in ways that suit the preferences of their parishioners.

Pastoral Strain: Working Hard(er) for the Money

We also uncovered evidence that many pastors were working harder—dedicating additional time and effort—to manage congregational finances in the wake of COVID-19. Sarah, for example, told us that her small, rural congregation was “already in an anxious financial place before the pandemic.” She expressed concern that congregants would make rash decisions regarding the budget out of a place of fear. As a result, Sarah reported that financial management was an area she really “focused in on as a pastor.” She reflected,

It was slightly out of my comfort zone. Administrative areas are out of my comfort zone … But I really had to be an administrative leader with a finance team, and to push us to apply for the grants … I worked a lot with them and their finances.

Sarah described spending considerable time in discussion with congregants about financial strategy in the wake of COVID, an area that was outside of her “comfort zone” as a pastor.

Sarah was not alone in dedicating additional time and energy to financial management. Kathryn, pastor for a small, rural church, reported feeling “stressed” about congregational finances. While Kathryn felt that it was not her job as a pastor “to save the church,” she reported doing everything possible to “help it financially survive” during COVID including “initiating and being a part of the group of people who apply for PPP … paying attention to grants, paying attention to ways that we can cut spending, being very active in trying to do those things and educate myself about it.” Kathryn did not feel prepared for this new role and did not enjoy it. She told us, “It really sucked because I don't understand how those things work and I had to learn really quickly and that's stressful.” Likewise, Chandler, leader of a small urban church, reported that he “had to get a lot more involved in the office stuff, the finance stuff” during COVID than he was beforehand. He felt that this work interfered with other aspects of his pastoral role: “I don't feel like I've had as much time to be the ‘spiritual pastor’ as I have been the CEO.” Because COVID changed financial situations for most churches, pastors were tasked with thinking more explicitly about church finances and their financial strategy to successfully weather the pandemic. This is particularly stressful given that most pastors receive little or no training in fiscal administration (French-Holloway 2020).

Personal (Financial) Sacrifice

Some pastors (n = 11) reported examples of personal financial sacrifice to help keep their congregations afloat during this difficult time. Notably, of the eleven pastors who reported financial sacrifices, nine (82%) were local pastors and seven (64%) were women. Of the 19 congregations (led by 11 individual pastors) that had a pastor who reported making a financial sacrifice, seventeen (90%) were small and fourteen (74%) were rural. This suggests that the burden of financial sacrifice was not evenly distributed. It tended to fall more heavily on women, local pastors and on pastors of smaller, rural congregations.

We identified several kinds of financial sacrifice. Three pastors, for example, reported paying for church expenses out of pocket. Alice said she spent money “on equipment and programs” to make online worship easier. Ed, pastor of three small, rural churches, shared that he personally “bought a 60-inch TV so that we could show videos and everything,” after returning to in-person services. Spending personal money for congregational needs was not necessarily a new practice. Lauren, pastor of a small, rural church, for example, told us, “There are things I pay for out of pocket, always have.”

In addition, five pastors mentioned salary cuts, either taken or discussed, and another two pastors mentioned foregoing salary increases because of the pandemic. Alice, in addition to paying for church needs out of pocket, told us that she offered to take a salary cut: “I had a conversation with staff parish very early in this pandemic, and, ‘If at some point you all need to start paying me less, just let me know.’ Because I have that luxury. I could retire and go on Social Security in a few months.” Alan, pastor of two small, rural churches, volunteered not to take an annual raise: “When we received the compensation letter from the bishop about paying your pastor this year, I did tell both churches that I … would refuse a raise this year. We needed to see how things were going before we did that.” Alice and Alan both volunteered to receive less compensation to ensure financial stability for their congregations.

For others, pay cuts were not voluntary. Gabe, whose small, rural congregation was struggling financially, was encouraged by the denomination to consider transitioning to “a shared charge or a part-time because they no longer felt like we could support a full-time clergy person.” Another pastor, Rose, started at a new congregation during the pandemic. She reflected, “And fortunately, I took a pay cut coming here, a dramatic pay cut. But I also start[ed] doing Social Security this month, so it's not quite so bad.” Rose reported that her monthly expenses are lower in the new location, and noted, “Plus I don't require a lot to eat, so it's worked really well.” While the financial issues and pay cuts mentioned by these pastors were not directly related to the pandemic—Gabe, for example, linked his congregation’s struggles to the non-COVID related deaths of “a handful of elderly members … who were very generous tithers”— their experiences highlight the financial precarity of many small congregations where even small drops in giving can have significant consequences. Their experiences also show that pastors often make or consider making personal financial sacrifices to benefit their congregations. Rose’s description of her reduced salary as “fortunate”—because it eased the financial burden of her congregation during the pandemic—is a particularly striking example.

Several part-time pastors we spoke with reported working more hours for the same pay, which impacted their work and home lives. Anne, the pastor of small, urban church, reported working nearly full-time during the pandemic despite being paid for just quarter-time. The increased workload had become a point of tension with her family,

Well, it goes back to another stressor is my family. They see me working more hours with less pay and they're like, “Stop. You're doing too much.” And I'm like, “But this is what I need. This is what God is telling me to do.” “Well, they're not paying us.” “I know that, I understand that, but this is what God is telling me to do.” So I keep working.

Another part-time pastor, Chandler, who was quoted above, told us he had to reorganize his other part-time jobs to accommodate the pastoral role “taking up so much more time.” Chandler reported about his non-clerical work: “Rather than doing … one big job each month, I'm having to do several little jobs so that I can work my schedule around to be here more … I've had to spend more time, late hours before I get home, doing stuff with … my contractors and things.” Additionally, his wife has also “become involved in the church … doing things and helping” during COVID, another indication that his pastoral workload was unable to be confined to his specified hours of work per week. Chandler aspires to be in ministry full-time but refuses to put himself above congregational needs: “I told them, ‘I'll never put this church in a burden financially to push to be a full-time pastor if y'all can't financially do it’.” These responses reflect the fact that many pastors see their work as a calling from God. This sacralization of work can lead them and their families to make personal sacrifices on behalf of their congregations (LeGrand et al. 2013; Proeschold-Bell et al. 2011).

Longer-Term Concerns

While most pastors did not express immediate financial concerns, many respondents expressed some anxiety about the long-term financial health of the congregations they served. This amounted to concerns being expressed by about 59% of the churches covered by the pastors in our sample. Josh, pastor of a small, rural church, spoke of being “anxious about it at all times,” while Paul (serving two small, urban churches) shared that “so far” his churches were “keeping their heads above water,” but also notes that, “The church is small and if we lose many members, it could be really, really hard.” This uncertainty speaks to the fragility of financial situations that otherwise were not as bad as anticipated. We identified three factors that contributed to longer-term financial concerns.

First, as noted earlier, for many congregations in our sample, one-time boosts in revenue offset declines in regular giving and contributed to stronger financial positions for many churches. Many churches reported receiving denominational grants and/or a PPP loan. The PPP loan gave a quarter (24%) of churches in our sample financial cushions, or “space” and “breathing room,” as Tom described it. Jessica, the pastor at a large and a small urban church, reported that while one of her congregations was “in a financial crisis before the pandemic hit,” the PPP “actually has saved us.” It is unclear whether and how Jessica’s congregation will remain financially viable without the PPP grant to offset salary-related expenses. After their PPP funds ended, Susan discussed how her larger, urban church was unable to cover their employees’ salaries. “We did have to furlough two employees … we made sure as long as we could, that we could take care of them. Then that had to stop.” Many pastors worried what the financial picture of congregations would look like once these temporary solutions ran their course. Once worship services returned in-person or conference and/or state-based relief programs end, some pastors, like Tom (larger, urban church), anticipated a financial “pinch.”

Second, in many cases, financial neutrality was achieved by cutting programs, reducing salaries and/or reducing operating costs, all of which were temporary strategies and considered less-than-ideal by pastors and congregants. For example, Harry, pastor of a larger, urban church, worked with his finance team to create budget reductions in 3-month cycles, cutting programs and salaries to meet their target. He told us,

Our budget was like…real close but 51% program and 50% administrative … now, it's almost 75%, 80% administrative and … 25% program. The program aspect of it has significantly reduced. I'm okay with that because of where we are. I would not be okay with something like that if it was a normal time.

Greg shared a similar sentiment, describing the pandemic as akin to a period of “hibernation,”

The pace of things have slowed down and I'd describe it as this is maybe, at least my church, seems to have almost gone into hibernation. So, it's hunkered down and it has enough financial stability and generosity to weather the storms and maintain staffing levels and things but not a lot of initiative to do new things … just kind of bare minimum maintaining of the more important activities and traditions.

For both pastors, the current financial plan reflected a kind of “survival mode” in which decisions were made to cut programs or reduce staff (or staff salaries) in order to “continue to run and exist” (Greg). While a reduced budget, cut programs, and “hunkering down,” were seen as necessary and acceptable sacrifices in the short-term, doing just “the bare minimum” was not a feasible strategy in the longer term.

Finally, while small drops in giving related to the pandemic came to many pastors as a relief, the longer-term consequences of this decline worried some pastors. Tom highlighted this challenge: “As we kind of look at projections, there's a possibility that things will get very tight. The closer we get to the end of the year with the shortfall in non-pledged giving.” Greg, pastor at a larger, rural church, also foresaw challenges down the road: “There'll be maybe some harder decisions to make but at present we've been able to continue operating just kind of as normal with income and expenses.” Two pastors expressed concern about the pandemic's impact on critical fundraisers—events, like community potlucks and dinners—the church relied on in years past to meet budget needs. Alan, who led two small, rural churches, worried about how the move to online worship would affect giving in the longer-term,

There are people that are more comfortable at home, virtually, and this is going to be the new normal. The key there now is going to be financial sustainability because too many people see tithes and offerings as pew rent. I'm paying it for a spot in the church and if I'm not there, I don't need to send it … That is where our issues are going to lie.

As they looked ahead, many of these pastors expressed concerns about COVID’s impact on giving in the medium and longer term.

Discussion

In this research, we documented how a group of 50 UMC pastors appointed to lead congregations described the financial ramifications of the COVID-19 pandemic for the churches they served. In line with recent survey research, we found most churches reported relatively small decreases in giving, offset by decreases in expenses due to not meeting in person and by additional revenue from the PPP program and other grants. However, even in cases where the net impact of the pandemic on congregational finances was relatively modest, our research suggests this modest impact masked more complex financial disruptions to congregations brought on by the pandemic. Survey questions tend to focus only on the impact of COVID on the bottom line, but, as the current study demonstrates, they can fail to show the variety of strategies pastors and congregations used to manage their financial situation during the pandemic. Our findings demonstrate that pastors were forced to make significant changes to their previous approaches to managing their congregations to ensure the financial stability. This research also highlights the extent to which currently stable financial situations may be precarious in the longer-term. It is vitally important for scholars of congregations to build on the current research and to follow the long-term impact of COVID-19 on congregational finances.

In addition, our research suggests that the size of congregations is a key continuum along which to analyze the differential impact of COVID-19's financial impact. In spite of the fact that larger churches tend to have a larger proportion of people with higher incomes and education levels (Eagle 2012), previous research has shown that people in smaller congregations give more per capita than people in larger congregations (Chaves and Eagle 2015:2). However, our research suggests that smaller churches appear to be facing more significant struggles. Many small churches have very small budgets, which means small drops in giving represent a larger proportion of the budget. There is a point at which a small church is no longer economically viable and it is possible that COVID may push larger numbers smaller churches to close (Anderson et al. 2008). If COVID does result in the closure of more small churches, this may also speed the trend where people are increasingly likely to attend larger churches (Chaves 2006). Finally, as smaller churches are often led by local pastors in the UMC, COVID may have a differential impact on part-time clergy in contingent positions.

Our findings also challenge some initial concerns and findings related to the financial impact of COVID on congregations. For one, initial speculations posited that rural congregations may potentially experience the largest declines in giving because of their relative lack of preparation for online giving (Manion and Strandberg 2020). Our research challenges this assumption. We found for many rural churches, online giving was more hassle than it was worth and that mailing in checks and dropping off donations at the church was often a simpler and more effective solution. That said, pastors of both small and large, rural and urban congregations reported using a broad range of methods to accept donations.

In addition, early research showed concerning declines in giving (Bird 2020; Lake Institute on Faith & Giving 2020; Lifeway Research 2020; Manion and Strandberg 2020). Our research suggests that there was some temporality in patterns of giving, at least in some congregations. Early declines may have reflected a break in habit, which returned once new methods of giving were implemented. Ed, pastor of three rural congregations, for example, told us, “It took folks awhile to get used to mailing in a check.” Likewise, Christina, pastor of a small, urban church, reported, “It just takes people a while to change their habits. It took us a while to get our online giving. There's something we had to learn.” These responses suggest that early declines and/or lags in giving may reflect the usually habitual nature of tithing which was previously tied to the context of in-person collective worship services. Thus, our research suggests that large-scale declines in giving found by research conducted close to the onset of COVID may not have as great of a long-term impact as originally hypothesized.

We also heard several pastors report receiving large gifts from donors both inside and outside the church. We suspect that this is also a factor that helps explain why COVID-19 was not as disruptive to finances as initially expected. The threat of the pandemic activated individuals within churches to give to make up shortfalls; also, in a few instances, pastors said people outside the congregation gave money to churches who were doing local food distribution programs. Again, this is not a long-term strategy for financial survival. If churches do experience longer-term drops in giving and there is not the immediacy of a pandemic, one-time gifts may not cover the shortfall.

In terms of other sources of variation, gender appeared to play a significant role in how pastors experienced the financial impact of the pandemic on the congregation. Our data support the conclusion that the pandemic was a more significant source of stress for female pastors. Out of the six congregations in our sample that seem to be in danger of closing for financial reasons, four of these congregations were led by female pastors. Female pastors were more likely to report short term worries about the financial stability of their congregations. While only three male pastors (12% of male pastors) expressed short term worries about the financial stability of their congregations, seven female pastors (29% of female pastors) expressed the same sentiment. While we do not have sufficient data to make definitive claims, our findings are in line with past research on the challenges faced by female pastors (de Gasquet 2010; Hoge 2011) and suggest the importance of attending to differences in pastoral experiences during COVID by gender.

Limitations

This study is limited in several important ways. First of all, we focused on one denomination in one state, which limits our ability to generalize our findings to other churches and denominations. In particular, in North Carolina, UMC churches had access to grants from the denomination to help defray costs associated with the pandemic. The availability of these grants may have made the financial impact of the health restrictions related to COVID-19 on congregations less severe. The UMC in North Carolina is predominantly white, and thus, owing to the differential impact of the pandemic on Black Americans (Buford and Johnson 2020; Eligon et al. 2020), we would likely find a more severe impact of the pandemic in Black churches. Second, our data come from one moment in time in the life of a congregation. Because COVID-19 created a rapidly evolving situation, these interviews cannot capture the entire impact of the pandemic, the full effects of which will not be totally understood for many years to come. Relatedly, of pastors interviewed early on in the pandemic, several expressed relief that the impact of the pandemic on their budgets was not more severe. A smaller-than-expected drop in giving was interpreted as neutral or even positive in the context of much more dire expectations. Pastors who expressed a lack of concern or even relief regarding finances, despite some evidence of negative impacts, may have been reflecting on their current position relative to their expectations. Finally, in our conversations with pastors, we asked them to reflect on how church finances had changed and allowed pastors to talk about the impacts and strategies that were most salient to them. Our data, therefore, may undercount the number of pastors who implemented any given strategy.

Conclusions and Implications

Recent research, including our own, supports the conclusion that the impact of COVID-19 on congregational finances was not as dire as originally anticipated. While it is still early in the recovery period, our study raises important questions about the longer-term financial impacts of COVID on church finances. It is clear from our research the PPP loans from the federal government and other grant programs through the UMC denomination were vital in helping congregations weather the pandemic. Our study suggests that revenue may not have declined in the early and middle period of the pandemic because of temporary “stop-gap” measures and support provided by the PPP loans, grants from the denomination (including mortgage relief, pension and healthcare coverage for pastors) and substantial one-time gifts or memorial donations. Additional research is needed to assess congregational finances after these temporary offsets were spent. Has giving returned to pre-pandemic levels, or will the declines seen during COVID become permanent, much like what was observed after the Great Recession? We underscore the need for qualitative research that examines the economic recovery of congregations to address questions such as, whether, when, and how programs and salaries that were cut during the pandemic as preventative measures were brought back? Were furloughed staff re-hired? Were delayed raises eventually conferred? What strategies will pastors use in the latter stages of the pandemic to increase or maintain giving?

We also heard pastors relate that they had suspended and/or reduced giving to the denomination. It seems reasonable to conclude that the pandemic could further accelerate the trend of declining denomination support by member churches (Chaves and Eagle 2015; Wuthnow 1997). For congregations who are unable to return to pre-pandemic giving levels, they may be forced to reduce their contributions to their denominations.

It is also clear from this research that the financial impact of the pandemic is highly variable. It is more appropriate to speak of the impacts of the pandemic on congregations rather than a singular or uniform impact across congregations. Size, location, composition, and especially the pre-COVID financial situation of the congregation played important mediating roles. Many pastors reported early dips in giving, followed by a return to normal or near-normal levels of giving. Others reported slight declines that remained steady over time. Still others wondered if there is a viable path forward for their churches. At a minimum, we expect the pandemic will accelerate the closure of churches that were struggling financially before the pandemic. Future research should attend to the variability of the financial impact of the pandemic on congregations.

And finally, no matter what the impact was to the bottom line, all pastors in our study were forced to “hunker down” and focus on the essentials of congregational life. Many pastors found this a difficult and stressful experience. Managing the pandemic forced pastors to take a more active role in managing the finances of the church. Many felt under-prepared for this task. Several pastors, especially women, had to dip into their salaries and work more hours for no pay. We expect that these acute stressors may have a long-term negative impact on the wellbeing of pastors.

Around the world, COVID forced congregations to cease physically meeting central activity and find ways to adapt. For pastors, navigating churches through this time was a challenging task. To understand the evolution of religious congregations in the future, it will be vitally important to track the lasting financial consequences of the pandemic.