KEY POINTS:
New Zealand, it seems, is experiencing a spiritual drought. Census figures confirm a growing number of Kiwis have no religious ties, while churches report empty pews.
As the financial crisis deepens, the economy of faith is also expected to suffer. Many religious groups have invested solely in property, and are heavily dependent on donations to maintain cash flow.
Few churches have accessible sources of liquidity, while some are in debt. With discretionary income set to fall, churches also expect their offering plates to look a little bare in the coming months. Now, church hierarchies and leaders are searching for new ways to stimulate growth.
Churches absorb a smaller share of the economy's resources than they once did, but the interaction is still significant. There are almost 10,000 religious organisations in New Zealand, which receive more than $500 million in tax-free revenue each year.
Many moderately-sized, traditional churches have built up large wealth bases using old money; the family finances that, for many generations, bankrolled church activities.
But that old money is drying up; large family donations and bequeaths are now uncommon. Church consultant Kem Price says churches are discovering how to unlock new funds within their communities.
"Boy, there's some new money around these days. It's coming from under-45s with strong business backgrounds. These Christian philanthropists want to use their money in a way that allows them to be hands-on. They jump on board, they build church facilities, and they offer their expertise. Some invest hundreds of thousands in their churches.
"I know of churches with board members worth more than $50 or $100 million each. The smart churches build positive relationships within their communities, which leads to that kind of synergy."
As a new year begins, that synergy seems to be missing from many empty, cash-strapped provincial churches, which cannot even afford ministers. In contrast, a handful of metropolitan mega-churches are prospering. Their pastors are believed to hold large salaries, while ambitious construction projects are under way.
City Impact Church recently built an Auckland complex that sets "a new standard". It includes a 2100-seat auditorium, a cafe with alfresco dining for 300, a television suite, gym, dance studio and other multipurpose facilities. Pastor Peter Mortlock doesn't consider this excessive at a time of economic caution.
"When people come to City Impact, they may think there's a lot of money here, but all our funds are raised by locals.
"You may be dealing with large amounts of money, but that doesn't mean you've got better cash flow. As our church grows to more than 3500 people, so do the bills.
"The resource consent for our new building alone was $325,000.
"I'd estimate more than 40 per cent of our money goes directly into the wider community, but we consider our church to be our community, so all of our funds are put to good use. A lot of people perceive churches in a bad light in relation to finances. There have been a few crooked doctors and lawyers, but that doesn't mean they're all crooks. It's the same with churches."
Mortlock declined to release a copy of City Impact's financial statements for this story, claiming churches have a right to privacy.
While many other churches also refused, Auckland's Life Church was willing to go public. The 7500-strong church brought in about $10 million in revenue last year. Of that amount, $670,000 was donated directly to other community projects, while the remaining $9.3 million was spent by the church on its activities.
Many urban, non-denominational churches are believed to hold large amounts of capital. Destiny Church was also asked to release its financial statements for this story but refused, saying it has no obligation to make its figures public.
Religious organisations' revenue is tax-free, in recognition of the social value of church work in the community. But how much of that revenue is reaching those who need it?
Steve Farrelly, of the Christian-based Life Impact Trust, says churches should be more transparent about their funds. "If you're an urban church with 5000 people who tithe 10 per cent, you're bringing in several million a year.
"How much of that reaches the community? In some cases, churches just keep buying assets. Yes, they can bring in large amounts of revenue, but it should be redirected to those who need the help. The challenge for the business sector now is to help religious organisations to refocus on their core social objectives."
Economists are unsure how significant the market's interaction with religious groups is, because there is no official data on church finances.
The Anglican and Catholic churches do not have centralised fiscal records, while independent Pentecostal churches were reluctant to provide their figures.
The Presbyterian Church is the only major denomination to release data. The church has more than $1 billion in assets, with annual revenue of about $50 million. All denominations denied being secretive about where, and how, assets are stored.
"Our equities have been conservatively invested," says John Butterfield, the general manager of the Catholic archdiocese, "but nonetheless, they have taken a hit recently. We continue to fund social services at little or no cost to the community.
"The business community is understandably wary of being associated with the church at times, but there are creative ways to get around that. The priority now is to remain as cost-effective as possible.
"In these economic times, we don't want to do anything that will curtail our community outreach."
Ross Chesney, a senior management consultant, heads the financial committee of Wellington's historic St Johns in the City; a church with $13 million in investments. He says churches are competing with rugby clubs and charities to make people open their wallets. His church primarily uses low-risk, fixed-interest investments and term deposits. He is concerned that, unlike their counterparts in other Western countries, many New Zealand churches have been reluctant to explore investment options outside the property market, limiting growth.
"Many of these churches have become asset rich and cash poor, because they have sunk a lot of money into property. It's actually rare for churches to have money in the bank. There is a perception that certain churches sit on large funds, particularly within the Catholic Church, which has built up resources.
"Right now, many churches are not financially viable. People are moving to urban areas, and the population is aging, so it's sink-or-swim for them," Chesney says.
Churches without accessible cash assets are finding it difficult to stimulate growth. The Presbyterian Church can access less than 10 per cent of its wealth. Last year, to free up capital, it launched the Great Big Growth Plan. This strategy suggested the sale of underperforming churches and the creation of a central fund to grant and loan money to emerging churches. The plan was eventually scrapped after dissent from within the church.
Religious groups that are already facing tough calls are using economies of scale to increase efficiency. Church Resources is a low-profit company that uses bulk buying to offer churches cheap deals on cellphone plans, security systems and website hosting.
While combining their buying power, churches are also pooling resources. Separate congregations are sharing facilities. Many newer churches aren't buying or even renting property; instead, they hire a local auditorium on a regular basis, to avoid becoming financially tethered.
Terry Calkin, pastor of Greenlane Christian Centre, says churches seek to use their resources in the best way. "Everyone has a crack at the church; it's fair game in this society.
"But the work of churches saves taxpayers millions. We don't publicise this or stand on a soapbox. Most churches are not flush; their aim is simply to balance their books.
"Urban churches have great assets which must be protected wisely, but they must also be actively used to best effect. Ultimately, it should never be about money. Most churches know that."
