Vital Ministry in Times of Scarcer Resources

What Makes Money a Lagging Indicator in the Church?

by

UMC Future

United Methodist Focus | Aug. 27, 2026

You may have been surprised to learn recently that many annual conferences are selling their headquarters to move to smaller spaces. This news came from reports following the yearly annual conference gatherings earlier this summer. There are multiple reasons for these decisions, but two are dominant. Conferences need less space for staff than in the past. Not only are there fewer annual conference personnel, but since the pandemic, remote work has become more common in many workplaces. Larger spaces are no longer needed. The other factor shaping these decisions is that annual conferences have less money these days, and virtually all new facility arrangements will save money.

Conference Buildings Across the Years

In May, I noticed a news story saying that the Iowa Conference trustees would seek approval at their upcoming annual conference session to explore the sale of their conference center. The trustees reported that the center was built in 2005 to accommodate about 48 staff and frequent gatherings. Now, however, it typically supports 7 to 8 people for daily use due to post-pandemic workplace changes. Much of the building space is therefore unused. The annual conference subsequently gave their approval. The image, “Plumb Line,” used with this article, comes from their building.

I remember the first time I was in that Iowa headquarters. The building was relatively new and well designed. I was reminded then of how many new conference centers I had visited in recent years. I began to wonder about how these new centers came to be built after decades of membership decline in United Methodist churches. How could that happen?

Consider, for a moment, a group of conference leaders meeting in their headquarters in the mid-1960s. What if someone had told them that despite being the largest Protestant denomination in the country, with membership growing consistently year after year, a new chapter was beginning immediately?

For the next 60 years, beyond most of their lifetimes, their denomination would lose membership every single year.

Then these conference leaders are asked to picture what their conference headquarters might look like after 60 years of membership loss. I doubt if they would have envisioned some of the finest buildings they had ever had, even as they served far fewer people than ever in the lifetimes of most who worked there.

So how did many conferences (and congregations as well) come to have their finest facilities after decades of becoming smaller each year?

Does this matter for United Methodists today?

Yes, it needs to matter to us because that is exactly what many church leaders are facing today.

Membership continues to decline, and now resources are becoming scarce—and more than ever, we are called to vital ministry.

Two factors may give us clues for understanding what often happens, and does not happen, when resources of people, and now money, become scarcer.

One factor is the varying degree to which financial stress tends to impact different levels of the church in the availability of operating funds.

The second is that the resources of the church, that is the net assets (assets minus debt), often continue to do better than one might expect given membership and attendance decline. (A congregation’s assets include property and investments.)

The Sequence of Impact from Financial Stress

For most of the years of United Methodist membership and attendance decline, financial resources for all levels of the church continued to grow, and for most, the growth was well above inflation. This financial growth was particularly true for local churches and somewhat less so for conferences and the general church. Loss of people does not necessarily lead to loss of money, at least for a time and, often, for a long time.

But when either the economy or the church faces enough downturn, the church cannot escape the repercussions. The impact, however, is not felt equally across all levels of the church. Some parts of the church feel the economic stress more acutely than others. We can see this pattern at work in economic shocks such as the Great Depression and, more recently for United Methodists, the secession of many churches through disaffiliation as well as severe disruption in many of the congregations that did not leave.

What follows is a sequence often seen regarding what parts of the church feel the effects of financial stress first and most.

Ecumenical agencies. These groups depend on contributions from denominations that are their constituents. When there is financial pressure on denominations, one of the first places where cutbacks are made is in contributions to ecumenical entities.

Denominations. We are already seeing financial stress unfold for the United Methodist Church. A previous issue of United Methodist Focus illustrated why this happens (“Is the House on Fire?”). The denomination feels the full effect of any membership or giving downturns most because all those losses impact those at the denominational level. While judicatory bodies such as annual conferences may feel declines within their conferences, they do not feel the effect of losses in other conferences. As with ecumenical agencies, denominations are more removed from those doing the giving than either the conferences or local churches. Even apart from recent challenges, the percentage of all money given to congregations that goes toward general church purposes has always been small but has now gotten smaller. I remember a time when we spoke about 4 cents of each dollar contributed to congregations going for general church purposes. Today, that percentage is more likely closer to 2 percent.

Judicatories (Annual Conferences). Annual conferences are closer to the donors and congregations from which the money comes. Also, conferences have avenues to work directly within their conferences to motivate both growth and giving, as well as to use their personal connections to raise funds. Of course, when any conference suffers losses greater than the denomination, that conference will experience greater impact and lose the advantage of this typical sequence of impact. Such has been the case, for example, in conferences that lost the most congregations from disaffiliation.

Congregations. There are several reasons why congregations feel the impact of decline less drastically than the other three units of the church. Congregations tend to fare better than the other levels of the church because the people giving have a personal connection with the congregation. They know its ministry and support it. However, there is now a major exception for any church where the loss of either people or money has been far greater than for other churches in their conference. That is the situation for many United Methodist churches where the process of voting on disaffiliation, even if the church did not disaffiliate, was itself so toxic and polarizing that the congregation is now left with either a divided church or a much smaller congregation.

It is now necessary to look in more detail at the financial realities of congregations during these years of continuing membership and attendance decline. For most of us, this is the place where we experience such changes most directly. Understanding financial realities for our churches helps us understand how financial indicators must take account of trends beyond money that relate to other indicators of vitality. It is unwise or even dangerous to assure one another that all must be right in our congregation since we are meeting the budget.

Congregational Operating Funds Feel Stress First

While some may consider charts and statistics to be “getting in the weeds,” such visual indicators can help us understand the implications of declining resources for the ministries of our congregations.

What can we learn from the following statistics and charts?

Congregations have not felt the financial stress as quickly as other levels of the United Methodist Church and ecumenical agencies.

Congregations have a range of assets that continue to enhance support even as membership and attendance decline.

Eventually, if decline in people continues long enough, the congregation no longer has the resources to serve at the level it once did. Support for vital ministry may be at risk.

This chart shows the average operating funds spent between 2000 and 2023, accounting for inflation. One way to describe the way these funds are rising or declining is to report them in relation to the inflation rate. Have they grown at a rate higher than inflation or declined in relation to the rate of inflation? Anything above 100 percent means that, on average, churches had more money both to cover inflation and then additional funds beyond inflation. In 2010, for example, churches had operating funds that covered inflation since 2000 plus another 10 percent.

Although membership was already decreasing, operating funds increased or were steady for much of the past quarter century. But a point came when these began to decrease, as the chart indicates.

Physical Property Assets Often Increase Additionally

Even though congregations face financial challenges and still must push hard to reach their budget goals, the total assets of the congregations continue to grow more so than operating funds. The next chart looks at physical assets (property and buildings minus debt).

This chart shows the average net physical assets of churches between 2000 and 2023, accounting for inflation. Anything above 100 percent means that, on average, church physical assets increased at the rate of inflation plus an additional increase beyond inflation. In 2010, for example, churches had physical assets that covered inflation since 2000 plus another 30 percent.

Investments Increase as Well

The other type of assets that churches report each year, if applicable, are “other investments.” What is reported varies among churches. Some have established endowment funds where the principal is preserved and then a percentage of the endowment’s total return (dividends, interest, and appreciation) is used for ministry purposes. The percentage used each year is often based on the anticipated total return minus the anticipated rate of inflation to preserve the endowment’s real value.

However, most churches do not have formal endowments. But most churches have a range of funds beyond their operating budget and physical property. Some include building funds, designated or restricted funds, reserve funds, certificates of deposit or other savings, and capital renewal and replacement funds. These investments, along with operating funds and physical assets, comprise the “common wealth” of the congregation.

This chart shows the average net investments of churches between 2000 and 2023, accounting for inflation. Anything above 100 percent means that, on average, church investments increased at the rate of inflation plus an additional increase beyond inflation. In 2010, for example, churches had investments that covered inflation since 2000 plus another 18 percent.

Churches do well to remember all three of these sources—operating budget, physical assets, and investments-- have one purpose: to fulfill the mission of the congregation.

Money as a Lagging Indicator

The level of financial resources of the congregation is what economists call a “lagging indicator.” Financial declines are generally less than the rate of decline in membership and attendance. The impact of decline in people and participation may be “lagging,” but it does eventually make its impact known through finances.

There are several reasons why membership and attendance decline did not lead to financial decline beginning 60 years ago. Those first losses came in children and youth. Then there were fewer new members joining, and frequently they were not strong givers in their early years in the church. But the most important reason why financial decline did not occur sooner was the makeup of those who stayed as members. More members lived longer as life expectancy increased. The average age of United Methodists went up. People have more assets after the age of 50, and each year a higher percentage of our membership was over 50. The remaining people were a loyal group, and their per capita giving increased to make up for the missing members.

But now, especially after the pandemic and disaffiliations, we can see from all these charts that the relative financial situation is getting more difficult for virtually all components of the church. The chart below is based on data from the previous three charts plus the addition of the average worship attendance in 2023 compared to 2000.

This chart shows how money is a lagging indicator. We fool ourselves if we are complacent due to “making the budget” while we reach fewer of the people God has given us in our communities. Money may be a lagging indicator, but it eventually catches up with other declines that have been going on for a long time. Effective leaders need a view beyond one year at a time. New children, youth, young adults, and new believers also represent a lagging impact when it comes to helping provide financial resources for ministry. They make little financial impact immediately but provide the energy and base of a new future that will become the next generation of generous stewards. Immediately, they can bring the commitment to grow in discipleship and strengthen the ministry to those in the community whom God has given to us.

Sustaining a Vital Ministry in the Community

As clergy and laity involved in congregational leadership think back on their attention to finances of their congregations, it is not unusual for the operating funds represented in the annual budget to have received the preponderance of attention and effort. That is understandable. The operating budget keeps the church going. It should be the “front of mind” consideration. However, congregational leaders do well to think in a broader range of assets and in a longer timeline than one year.

Remember that the “common wealth” available to fulfill your mission includes the operating funds and also the physical assets and investments or other financial resources. This does not mean that you begin using the cash or cash values of these assets for immediate expenditures. That would be disastrous and irresponsible. It does mean that you take account of how your physical assets and other funds can be handled in ways that are more directly employed on behalf of your mission and that those resources are properly managed.

The other lesson is the pressing one for many church leaders today. Survival is not a worthy goal for congregations, but sustaining a vital ministry in your community is. Times of financial challenge are not a time when churches should turn inward. The future is with the people God has given you in your community with whom you do not yet have connection. You reach out to your community not to save your church but to fulfill God’s call to bear God’s love to the world. By understanding the “lagging indicator” reality of church finances, you will not become complacent when the funds are there for the current year nor worried when new outreach is not followed by more money. What will change if you do nothing different is that the pull of past years of decline in outreach will take a heavier financial toll each year. But if you fall in love with your community again and open your doors and hearts to those you do not now know, then there will come new energy and passion to be the church that was intended when it was established years ago.

Notes

The picture used illustrates how artwork by the Rev. Ted Lyddon Hatten was built into the design of the Iowa Conference Center that opened in 2005. Other examples of the artwork can be found at the Iowa Conference website, including explanations of several of the symbols illustrated in the artwork. The artist’s website is Ted Lyddon Hatten.

The final year of financial statistics used in this article is 2023. There are figures available through 2024, but there are anomalies in some of the physical asset numbers that I could not resolve in time to use 2024 numbers.

Dr. Ann A. Michel and I have a book dealing with all aspects of stewardship and church finance, Generosity, Stewardship, and Abundance: A Transformational Guide to Church Finance.

The Lewis Center for Church Leadership in Washington, DC, offers a range of free articles on church finance and stewardship.

United Methodist Focus is the Substack blog of the Rev. Dr. Lovett H. Weems, Jr., distinguished professor of church leadership emeritus at Wesley Theological Seminary in Washington, DC. He came to Wesley in 2003 as the founding director of the Wesley’s Lewis Center for Church Leadership after eighteen years as president of Saint Paul School of Theology in Kansas City. Previously he was a pastor in Mississippi for many years. He is the author of many books on church leadership that have had a broad appeal to a large constituency of leaders in both the public and private sectors.