economics ,

Financing faith—but at what cost?

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Social conditions such as rising secularism, religious pluralism, and globalization pose significant challenges for the religious sector, and foundation giving may very well reshape the religious sector in the years ahead, a new study concludes. Foundations are influential in religion “because of their institutional independence, financial resources, and unique ability to redirect energies within an institutional field,” says D. Michael Lindsay.

RICE (US)—While millions of Americans make individual contributions weekly at their places of worship, a new study finds private foundations have a disproportionate influence on the religious sector—despite the fact that their contributions constitute only a fraction of all philanthropy to religion.

The foundations are influential in religion “because of their institutional independence, financial resources and unique ability to redirect energies within an institutional field,” says D. Michael Lindsay, assistant professor sociology at Rice University.

In the first major study of foundation giving to religion, Lindsay and coauthor Robert Wuthnow, a Princeton University sociologist, examined all grants between 1999 and 2003 reported by private foundations to the Foundation Center, which maintains the most comprehensive database on U.S. grants and grant-makers.

They chose that five-year window because it represented a time that included both significant economic expansion (1999 to 2000) and retraction (2001) in the U.S. economy.

The study is published in this month’s issue of the Journal for the Scientific Study of Religion.

Directed giving by the Lilly Endowment, which “has infused hundreds of thousands of dollars into the religious sector with a strong preference to developing the leadership capabilities of pastors and church staff members” has real impact, the authors claim.

“Over the last decade, the endowment has allocated nearly $500 million to various programs across the country with the goal of recruiting, training and sustaining high-caliber ministry professionals.”

During that period, the Lilly Endowment was by far the biggest donor to religious organizations, awarding 1,473 grants totaling more than $677 million. In second place was the Arthur S. DeMoss Foundation, with more than $94 million in contributions.

Federal tax policy has played a significant role in affecting religious philanthropy, Lindsay and Wuthnow say. The Tax Reform Act of 1969 defined “private foundations” and regulated their activities. Since then, federal legislation has shaped philanthropic giving by defining a number of charitable giving vehicles, including donor-advised funds and supporting organizations.

Social conditions such as rising secularism, religious pluralism and globalization pose significant challenges for the religious sector, and foundation giving may very well reshape the religious sector in the years ahead, the authors conclude.

The study was supported by the Aspen Institute, with logistical support from the Center for Civil Society at the University of California, Los Angeles.

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