The fractious debate in Washington relative to the national debt has left me thinking about faith communities and debt. While on vacation recently my brother-in-law asked me what religious communities were saying about debt. Answer: very little! In an essay on Consumer Debt and Christian Money Management, Paula Dempsey calls attention to the silence of major US religious groups relative to debt; especially the larger social and economic realities surrounding debt.^[1]

The recent Great Recession underscored the debt liability with which many congregations live. In a national survey the Lake Institute conducted in cooperation with the Alban Institute, we found debt to be one of the indicators of a congregation’s ability to survive the recession without staffing or programmatic cuts. Street wisdom says that annual debt repayment should not exceed four or five percent of a congregation’s annual operating budget. Many congregations bought into the economic boom of the 1990’s and early 2000’s and saddled themselves with annual debt payments that were closer to eight and nine percent of their operating budget. Then came the recession, sending the roof crashing down on many faith-based organizations as overall charitable giving in 2008 and 2009 dropped a combined thirteen percent.[2] And a text from the Judeo/Christian tradition comes to mind: “When you are in debt to another, the borrower becomes a slave to the lender.”(Proverbs 22:7)

Another indicator as to a congregation’s fiscal health is the degree to which they are dependent on endowment or foundation income to balance their annual budget. The way in which congregations manage their endowments is often squishy. Amidst the pressure of tough times leaders borrow/steal from their endowment’s principle to pay today’s bills, thereby shortchanging tomorrow. Or they annually draw from their endowment without consideration of inflation and interest rates. I confess to being shocked by the number of congregations whose annual endowment draw exceeds five percent and congregations who are more than ten or fifteen percent dependent on their endowment for their annual budget. As I listen to religious leaders explain this fiscal gamesmanship, I recall the words of the Prophet Muhammad when asked why he shunned debt. He replied: “A person in debt tells lies whenever he speaks and breaks promises whenever he makes them.”

The Great Recession coupled with the recent debt debate in Washington is a call for faith communities to put their financial houses in order. Indeed, before we lampoon Washington, we might well ponder the wisdom of Jesus: “First take the log out of your eye, then you will see clearly to take the splinter out of your neighbor’s eye.” (Matthew 7:5)

By: Bill Enright
Director, Lake Institute on Faith & Giving

^[1] Paula Dempsey, “Consumer Debt and Christian Money Management” in “Religious Giving: For Love of God”, Indiana University Press, 2010.
^[1] Giving USA 2011