The economics of church decline (and rebirth?)

So we've all read countless blog posts about all of the sociological and cultural reasons the mainline church is dying.  I would like to take a different approach, one based on economics (and one that focuses on my denomination).  I do this because I believe that economics may help us see the necessity of certain solutions.

I also write this on St. Patrick's Day, because I believe that part of the secret to the Irish monks was their capacity to develop an economic model that allowed for mission.

Economics is all about supply and demand...and we have a supply problem

Right now, the Lutheran denomination that I am a part of, the ELCA, is facing a huge crisis of supply in terms of its pastors.   This year there are far, far fewer pastors available for placement than in previous years (Like we have enough pastors for less than 1/2 of vacancies we have).  This is sadly not an aberration, but a trend.  Furthermore, we are just about to face a huge way of boomer pastor retirements.  We are probably producing a third of the pastors we need to. 

I'm sure we could find numerous blogs that talk about all the cultural reasons why younger people don't want to go to Seminary.  I want to propose a simpler and economic solution:  It costs too much money.  Seminary requires three years of study and unit of Clinical Pastoral Education.  There is also an internship year that offers a monthly income of $1,600+housing if you have to move.  Even though many Seminary students get scholarship help for tuition, the real cost of Seminary is simply living for those years without significant income.  When I worked in the financial aid office at my seminary, we estimated that tuition only represented 1/3 of the total costs of Seminary.  I had friends that graduated with 5 figures of debt from health insurance alone.  And that was 10 years ago!  It is also worth remembering that Seminary bills come on top of existing loans that many people have from undergraduate.  It is not uncommon for students to come out with $80 to $100K of debt.  (At 5% for ten years, that is $850 a month).  My sense is that we've been saying this for years, namely, that Seminaries are too expensive and that debts are too high.  I think the people not in Seminary heard us!

(Sad irony, the church wants to become more diverse.  To the extent to which wealth and race are correlated in our country (which they are), we end up pricing out non-white students at a faster rate than we price out white students).

(Second side point:  Many people talk of bi-vocational pastors -- "tent-making" to use Biblical language.  I am really skeptical of the desire or capacity of people to accrue so much debt and go through so much education for a part-time gig.)

Solutions proposed help, but not enough

I want to commend some of the solutions:  Trim overhead at seminaries through various mergers; allow more students to work at churches during seminary; give students financial coaching to improve the personal finances.  While such moves are noble (and surprisingly painful), we cannot cut costs by ten or even twenty percent and double the Seminary student population.  We would need solutions that cut the cost of Seminary by 50 to 60% -- like entirely new models, such as, say a national seminary that had one room satellites in every synod. 

I confess a fair amount of grief as I write this.  I had a "Hogwarts-like" experience at Seminary.  But I truly believe those days are over.  The solutions we are engineering will not provide the necessary and drastic reductions in cost we need.

Furthermore, we also will need a huge number of non-pastors who will assume theological, pastoral and programmatic leadership.  How can we train them at low cost?

We also have a demand problem
 
We also are facing a huge shift in the demand for pastors.  Let's do some basic math.  For many years 80-100 people in weekly worship attendance was a stable number for congregations.  At this size, you could afford a pastor.  You probably had a sexton, an organist and a secretary, all of whom were part-time and one of whom was (quasi)-volunteer.  It was tough but it worked.  This number worked out well because 100 people in weekly worship probably equated to about 150 people significantly involved in the ministry. 150 people is a nice number for a tribe.  One pastor can connect this many people. 

Then health insurance costs started spiraling.  This really impacted congregations.  Even if you took in the same amount (adjusted for inflation) with 80-100 in weekly worship, you could not meet your budget any more.  Health insurance for most churches is 10K greater than it was 20 years ago (again, even adjusted for inflation).  Again, even if you had as many people (which most churches don't), giving the same amount (most churches have lost money to skyrocketing number of non-profits), and you didn't have the massive deferred maintenance bills from building expansions in the 1960s and 1980s (you are lucky), you would still find yourself short.  You probably need 120 to 130 people in weekly worship to now afford a full-time pastor with full-time benefits.

But this is problematic because this begins to be a larger tribe than one pastor can handle.  Especially if you consider that most people come to church less frequently than they did (but still consider themselves integral to the congregation).  That 125 per week needed to pay the bills equals 200 to 250 people who are involved in the ministry.  Which, even for a raging extrovert, is too large for pastoral care. 

My point here is that we are beyond the need for a good stewardship series and even better discipleship.  In every industry there are stable size points.  Our stable size points shifted drastically in the last 20 years.  We must shift how we approach our basic models of ministry. 

Impact of these shifts

Congregations have done a number of things to cope with this problem:  cut their minister's compensation (making them 3/4 time; hoping they have a spouse who can pick up the health insurance costs); added online giving; tried stewardship campaigns; deferred maintenance even more; begun living off endowments; or cutting mission support, especially money to the larger church. 

All is not lost: The healthiest churches, including pastoral size ones, are figuring our ways to create secondary income sources, partner with other ministries to share staff and developing lay leaders to take on traditional pastoral roles.  But the fact is that the basic model -- one pastor, one congregation, one building (especially an old one) does not add up any more.  There have to be other income streams, additional staff or volunteers taking on significant leadership.  Congregations need to find strategic partners to share costs, resources and staff.  This may mean our church looks like it did 100 years ago, with far more 2 and 3 point parishes.  Or it may mean our church looks like it did 250 years ago when ordained clergy were the aberration and not the norm.

While this analysis focuses on pastoral size congregations (which were the bread and butter of my denomination), the same math is hurting larger congregations and smaller congregations.   Larger congregations are moving to a point where they have fewer and fewer full time staff and more part-time staff.  Smaller congregations are often calling part-time retirees who are on Medicare; or they find themselves needing to move from a two-point to a three-point parish to pay for a pastor, which means they now have a video sermon on Sunday.

In short, while the overall size of the church has decreased, the demand for pastors has decreased even faster as the math tilts against congregations.

A new equilibrium?

So, we may end up with an equilibrium point where we have fewer pastor spots and fewer pastors.  Good right?  No, actually pretty horrible!  What to do with all of the churches that don't have pastors, especially smaller churches?  How to make pastoral size churches feasible?  How to staff large churches when associates become so rare?  How do we give future leaders the time and community they need to mature into strong proclaimers of the Gospel?

What I would like to see happen:
1)  We implode the seminary system to produce something drastically cheaper.
2)  We expand drastically the number of lay-ministers/TEEM pastors who do not need the full seminary to lead worship at our smallest congregations.
3)  We do mission starts that from the beginning focus on cooperative ministry and sustainability, recognizing that the hoped for norm -- the traditional pastoral size model -- is not viable.
4)  We begin fostering and authorizing lay leadership to assume an incredible number of tasks reserved for pastors, especially related to pastoral care and even worship.
5)   Congregational leaders will be blessed with the patience to renew our congregations; we will also be blessed with the courage to try to new models.
6)   Congregations find ways to partner with other churches, non-profits and even businesses to create not simply economically stable situations, but ones that are oriented toward mission.
7)  The Holy Spirit revives our congregations and our people grow in faith, hope and love.

What I think will happen
1)  Money to the synod and national church will continue to dry up.  DRY UP.  Large congregations will replace the synods and national church as the leadership in what remains of the denomination.
2)  Large churches will use seminaries less and less and begin training their own leaders.
3)  Small churches will worship without pastors or they will close.  Many pastors who are currently sent to rural or poor congregations only serve three years in those places (statistics on this are pretty strong).  Pastors out of seminary will skip this step and go right to larger congregations in wealthier communities.
4)  We will talk about minority and poverty ministry, but the only places that will be able to afford attractive calls will be wealthy and primarily white communities.  Healthy congregations will grow as the vast majority of congregations shrink.