Decline in parish pledging units largely overlooked, yet spells big trouble for the Episcopal Church

One well-known indicator that a church is dying is that, as the end approaches, the remaining members ramp up giving to stave off the inevitable. And so it is in the Episcopal Church, where an ongoing Anglican Watch analysis of parish-level member giving compared to the number of pledging units suggests the denomination is already tipping into financial crisis.

Following are some data points, including information on the number of pledging units in parishes, that may help readers develop a better feel for the real state of the Episcopal Church.

Disclaimers

Before we plunge into the details, several disclaimers:

• Data about the number of pledging units in church parishes exists almost exclusively at the parish level. Thus, these data are difficult to access, and data sample sets are too small to be considered statistically reliable.
• Shoddy recordkeeping at the parish level further complicates the difficulty of obtaining and parsing this data. Indeed, many parishes take a catch-as-catch-can approach to this information, assuming prior year pledging units will continue to pledge despite evidence to the contrary.
• Anecdotal evidence suggests strong generational differences around pledging. Baby boomers, for example, typically maintain their church pledges, even once they move into a nursing home or otherwise lose touch with day-to-day life in a parish. Younger persons appear less likely to pledge at all and, if they do, quickly notify the church if they relocate or have difficulty paying their pledges.
• For the reasons above, this post offers inflection points to encourage discussion about data pertaining to church financial health. While we share our conclusions, we believe the best use of these data is for readers to form their own conclusions about trends within the church, perhaps asking, “What additional information do I need to better understand parochial report data from the national church? Do any of these issues apply within my parish?” In other words, good decisions typically are made using solid data, supported by meaningful context. We hope this post helps readers explore context for their church’s current financial posture.
• Most importantly, things can change. While efforts at turning around the flagging fortunes of the denomination historically have a dismal record, we cannot overlook the possible effects of current efforts to restructure the Episcopal Church’s archaic, unwieldy, ineffectual, and excruciatingly slow governance systems and processes.

Context

The issue of declining numbers of pledging units within parishes comes amidst 50 years of decline for the Episcopal Church in all categories, including membership, finances, and engagement.

Over the past few years, the denomination’s decline trend has accelerated. Indeed, as of 2023, the Episcopal Church has shed 23 percent of its members in just 10 years, and the rate of attrition is accelerating.

At the same time, a largely unnoticed event happened in 2022: For the first time in recent history, total member giving failed to keep pace with inflation.

That may not sound like a big deal, but the news comes in the context of ongoing increases in the average member pledge. In other words, the average pledge is increasing, even though the number of members making those pledges is dropping, yet

Thus, our analysis suggests that 2022 was the year the church reached a tipping point: Even though Episcopalians are a well-heeled bunch, for the first time in history they couldn’t give financially keep up with member attrition.

Our findings and observations

The ongoing Anglican Watch analysis of church finances and related data supports this conclusion and adds further, deeply concerning, context.

In our study group, comprising 86 parishes nationwide, ranging in size from less than 50 members to several with thousands of members, multiple trends emerge, all germane to the need to understand the interplay between number of pledging units and other inflection points concerning the overall health of the denomination:

• Parishes overwhelmingly focus on total revenue, versus more granular data that may allow better forecasting.
• A startling number of parishes and church officials lack even rudimentary financial literacy, including the concept of a balanced budget and how this differs from cash flows.
• Parishes and dioceses alike typically emphasize “high-value” income targets, while disregarding inflation. Thus, a parish may say, “We’re doing okay,” if it hits $2 million in annual pledge and plate, despite the fact it’s been using this target for more than a decade. As a result, the same parish has lost 34 percent of its purchasing power during the past 10 years, even as it acts as though its finances are solid.
• Small parishes typically have low rates of member attrition, as members recognize that losing even a single person can tip the church into closure. That said, members of these parishes often are maxxed out and unable to provide higher levels of annual support. Thus, while these churches often have a 100 percent rate of pledging, this data point typically suggests financial fragility, versus strength. 
• Larger parishes present different challenges when attempting to assess financial viability, including their ability to quietly substitute part-time positions for full-time positions, to delay filling vacancies, and other de facto means of obfuscating their true financial picture.
• Many dioceses are essentially financial houses of cards, in which a handful of flagship parishes carry moribund mission churches. As a result, declining numbers of pledging units, combined with the passing of the baby boom, places the denomination in existential crisis.
• Larger parishes typically are seeing much higher rates of member attrition versus small parishes, yet are slow to remove names from church records. Thus, we see multiple churches that claim 1,000 or more members, but are lucky if they get 180 people in church on Sundays. As a result, the “real” Episcopal Church is nowhere close to 1.6 million members, but rather the fewer than 400,000 people in church on any given Sunday.
• One of the most accurate bellwethers of organizational health in larger parishes is the number of pledging units. Such churches often have relatively modest declines in annual revenue, which in turn masks typical declines of 33 to 66 percent of total pledging units. In other words, faced with relatively high personnel and physical plant costs, these parishes are being carried financially by a rapidly dwindling number of pledging units. The result is an illusion of a church that’s holding its own, even as the resources backstopping that fiction are becoming scarce.
• A startlingly high number of parishes, particularly in affluent suburban areas, are now reliant on four or fewer pledging units to maintain the lion’s share of their budgets, with individual pledging units sometimes giving as much as $150,000 or more annually to keep the lights on. Needless to say, this creates a profound level of financial risk, yet in most cases clergy and senior church leadership are unaware of the looming danger.
• Additionally, these high-value pledging units create a massive disconnect between average pledge and mean pledge. As a result, many churches proudly proclaim that their average pledge is increasing, while failing to recognize that all but a handful of pledges are steady or declining.
• Big-dollar pledging units are often very discreet about their generosity. But in cases where clergy know who these donors are, it is common to see the donors playing a role in parish life that does not correlate with their spiritual maturity.
• An increasing number of churches can no longer afford to pay for capital expenditures via plate, pledge, and savings. Thus, a number of parishes have beautifully maintained campuses, but only because they are drawing on bequests to cover these expenses. Without a plan for growth, these churches are living on borrowed time.
• Churches discussing closure or merger typically ignore the possibility that they don’t need a physical church building, but could instead rent space from another church, meet outdoors, or use space from a neighboring parish. Such attitudes ignore the experiences of ACNA parishes, which often start by renting space from an existing church.

Finally, in closing, if there’s one point we hope comes through from this post, it’s the importance of understanding not just the top-level metrics coming from within the church, but the importance of both financial literacy and a granular understanding of organizational metrics. That is particularly the case when much of the data from the national church, including total membership numbers, are at best inaccurate portrayals of the present state of the Episcopal Church.