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Below is a complimentary Demography Unplugged research note written by Hedgeye Demography analyst Neil Howe. Click here to learn more and subscribe.

COVID-19 Threatens Mass Closure of Churches - 6 18 2020 9 49 56 AM

Due to financial shortfalls, as many as 1 in 5 U.S. churches could close in the next 18 months. Many don’t have the resources to survive more than a few months of sheltering in place—and even after they reopen, their mostly elderly congregations may not feel comfortable coming back. (The Economist)

NH: Before COVID-19, many churches were already struggling to survive. Church attendance has been dropping for years, with the most significant declines in Catholic and mainline denominations. Pew found that in 2018-2019 only 45% of Americans attended church monthly or more. See "Fewer Than Half of Americans Attend Church' Monthly or More.'"

Similarly, many churches have been struggling to pay the bills. With fewer people, there are fewer donations. For the Catholic Church, they have additionally struggled with massive payouts from sex-abuse lawsuits, leaving some dioceses already bankrupt.

The pandemic has exacerbated these challenges. With the most avid believers now unable to attend services, there is no one to fill the already diminishing collection basket. While many churches are going online, viewership has steadily fallen since March. Dr. David King of Indiana University predicts that 39% of churches don't have enough cash to survive for three months.

For some congregations, ignoring lockdown orders was a hail-mary to save their finances.  

Evangelical churches are in a slightly different situation. They didn't have the same attendance issues others did pre-pandemic. Megachurches were filled with tens of thousands of people each week. But COVID-19 has represented a new challenge for these once bustling operations. 

Megachurches are scaled-up businesses that need to seat, feed, and provide services to thousands of people. But if people can't attend sermons or the building can only be filled to a 25% capacity, people and donations will disappear. It takes a lot of cash to keep their margins in the black.

The churches that will probably have the easiest time surviving the pandemic are the smallest and most decentralized. With minimal expenses and perhaps a volunteer preacher, the loss of donations won't be as devastating. But as The Economist points out, these types of churches are in the minority.

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Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.

A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."

Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.

Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.

Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.