Surviving the Slumps

CHRISTIANITY TODAY/February 3, 1989

Can religious broadcasters overcome rising costs, competition, and the lingering effects of scandal?

Robert Schuller, now the most popular television minister in terms of viewer market share, has never resorted to desperate fund-raising appeals. Never, that is, until recently.

Late last year, Schuller told his television audience that in 1988 the ministry had suffered its “most crushing financial blows,” and that he faced “millions of dollars” of unpaid bills. Holding his thumb and index finger half an inch apart, Schuller said, “We are that close, so close to losing this ‘Hour of Power,’ ” adding, “Today you must do something, or we will die.”

Tough Times

For the usually positive-thinking Schuller, the appeal broke new ground. Some observers regard it as a sign of the times for a troubled industry. After all, Schuller is number one in viewership, and he built his media empire by focusing on good news. But like others in his industry, he is finding it increasingly difficult to ignore the bad news of fewer viewers and dollars.

According to the Arbitron Ratings Company, in May of 1987—the month the ministry laid off some 20 percent of the “Hour of Power” staff—Schuller was seen in 1.5 million households. By July of last year, his Arbitron ratings dropped to 1.2 million. In that same period, the scandal-beleaguered Jimmy Swaggart saw his weekly show plummet from 1.76 million households to 836,000. Other major ministries experienced similar declines (see chart on page 33).

Paul Virts, director of marketing at the Christian Broadcasting Network (CBN), cautions that Arbitron’s specific numbers may not be trustworthy, since they rely on viewers being surveyed to keep accurate diaries, and also because they do not include cable viewership. Yet Virts acknowledges a clear, downward trend in viewership of religious television and believes this trend most likely includes cable, given increasing competition from secular cable networks. Some blame this cable decline on operators of local cable systems (see article on p. 36).

For those who doubt the viewership numbers, the overall decline in giving, especially to the major television ministries, tells a clearer tale. Giving to Jerry Falwell’s television ministry was off by $6.5 million last year, while contributions to Swaggart might be down by as much as $90 million (see chart on p. 34).

Perhaps the greatest indication of financial troubles was the reluctance of some ministries, including Schuller’s and CBN, to give CHRISTIANITY TODAY specific figures related to giving, CBN’s Frankie Abourjilie, vice-president of public affairs, did say that contributions declined by 30 percent over a two-year period. She added, however, that contributions in December of 1988 were 14 percent higher than in December of 1987.

The Diagnosis

Most religious broadcasters are no longer asking the question of whether they’ve been hurt by scandals within their industry, but of how much. “I think it’s a bit naïve for anyone to say they’ve made it through this unscathed,” said Jerry Rose, president of the National Religious Broadcasters (NRB).

Larry Jones believes the decline in giving to his television ministry, “Feed the Children,” is an example of guilt by association (see sidebar on page 34). “From what we’ve seen, a lot of people have simply quit giving to TV ministries,” said Jones. “It’s a culmination of a lot of events, with PTL and Swaggart heading the list. A lot of people are wondering who we really are.”

Yet it appears that some, including D. James Kennedy and Lester Sumrall, have bucked the negative financial trend. Calvin College’s Quentin Schultze observes that, as a general rule, ministries that do not depend on “soft” money (income from crisis appeals) have been least affected by the scandals. “Over the long term,” said Schultze, “ministries that develop a loyal constituency are more financially secure than those that rely on hard sell.”

More Trouble Coming?

The bad news on the scandal front is that things may get worse before they get better. Even though it has been nearly two years since the PTL debacle broke, it has stayed fresh in the public mind with recent indictments of Bakker and his top aides for defrauding donors. Still, last month Bakker returned to the air on six small television stations, blaming others more than himself for PTL’s downfall.

And rumors of additional scandal among religious broadcasters are becoming harder to ignore. The Internal Revenue Service (IRS) announced late last year that it is examining some 30 television evangelists and their related organizations. According to the IRS, investigations into two of six major ministries involved allegations of criminal behavior.

Moreover, reliable sources have informed CHRISTIANITY TODAY that a major newspaper has conducted an investigation of another well-known televangelist and may soon publish an expose if the material holds up under scrutiny of the publisher’s attorneys.

In addition to concerns about scandal, industry observers cite other factors in assessing the current state of religious broadcasting. Fund-raising specialist Gaylord Briley views the economic decline in terms of demographics. “Giving is an age-related function,” he explains. “More than 70 percent of religious donors are over 50 years old.”

According to Briley, as traditional donors die off, religious ministries face a “generation gap,” an “entire missing generation of 10 million could-be donors.” Briley predicts that even James Dobson’s financially successful Focus on the Family will falter “when his market, the boomers raising babies, goes away.”

CBN’s Virts believes a glutting of the market has contributed to the decline of some ministries, especially those that are charismatic in theological orientation. “Things peaked around 1985,” said Virts. “Since then, we’ve seen a lot of donor fatigue.”

Recent changes in tax laws, including a limit on deductions individuals may claim for charitable contributions, may also be having an impact on television ministries. And the IRS is becoming more serious about ministries’ responsibility to inform donors of the value of premiums offered in exchange for donations. (The value of premiums is not tax deductible.)

The Prognosis

Organizations are beginning to realize that the pocketbooks of future donors, whatever the reasons, may not be as deep as they have been in the past. Some ministries have already begun preparing. Said Mark DeMoss, spokesman for Falwell’s “Old-Time Gospel Hour,” “We began in the last year or so a conscious effort to generate income from sources other than contributions.” He said this effort has included increased marketing of the organization’s education extension program and the development of the Liberty Village retirement community.

Meanwhile, CBN’s Abourjilie said that for the first time, income from sales of commercial time on the organization’s cable network has exceeded donor contributions. She called this “an enormous blessing for us at a difficult time.”

Schultze notes that the religious broadcasting industry has made it through tough times in the past and believes it will do so again. But he is not optimistic about the prospects for ethical violations to decline in the meantime. “Financial problems have the effect of broadening the ethical parameters of these ministries,” said Schultze.

For example, as the recent Schuller appeal illustrates, major television preachers might say they are in danger of folding, but in reality they seldom do. Did Schuller exaggerate his financial condition to reap sizable year-end gifts? CHRISTIANITY TODAY attempted to discuss this with Schuller’s organization, which responded with an 11-page report claiming his ministry ended up last year in the best financial condition ever (although no specific figures on contributions to the ministry were offered, and a ministry spokesman canceled scheduled interviews with Schuller). When pressed, Schuller’s secretary, Marjorie Kelly, said the crisis appeal was occasioned by unpaid bills totaling $5 million, but she did not elaborate further.

“The simple fact is that crisis appeals work,” says Schultze. Thus, he adds, “the drama of impending crisis has become one of the major fund-raising techniques.”

The NRB, whose 1,300 members make up about three-fourths of U.S. television ministries, would like to police its members through its Ethics and Financial Integrity Commission (EFICOM). The specifics on how compliance will be enforced have yet to be determined.

Schultze is skeptical: “There never has been, and I don’t think there ever will be, any significant, organized selfregulation in religious broadcasting, because American Protestantism is almost thoroughly individualistic and increasingly entrepreneurial.”

NRB president Rose has higher hopes for EFICOM. He believes the very process ministries go through in applying to EFICOM will be an education to some ministries on the principles of financial accountability. He said the process has helped some organizations realize their accountability standards have been adequate all along.

Rose acknowledged that “tremendous temptations” accompany financial pressures. But he said, “The idea I’m trying to promote among Christian broadcasters is that if our ministries don’t work ethically, then we shouldn’t be in existence. The ends in the gospel never justify the means.”

Rose is also optimistic about the future of religious broadcasting. “You’re going to see a leaner, trimmer, more efficient industry,” he said. “Everyone is having to make better budget decisions, and I think that’s good.”

Written by Randy Frame, with reports from Brian Bird in Los Angeles, Mike Umlandt in Chicago, and Kim A. Lawton in Washington, D.C.

Those Missing Ministry Dollars

Many have wondered where the millions of dollars that once went to to religious broadcasters are going now. While no definitive studies have been done on this, statistical information (see adjacent chart) and statements provided to CHRISTIANITY TODAY point toward some conclusions:

• Generally, people have not stopped giving, but instead have realigned their giving priorities.

• Although there are some exceptions, electronic media ministries appear to have suffered more than other ministries. Chapel of the Air and Back to the Bible, for example, have had either no growth or a slight decline in real dollars, even though both radio ministries are widely regarded as exemplary in terms of ethical conduct. The major exception in the radio realm is Focus on the Family, which has experienced solid growth, perhaps attributable to James Dobson’s popularity as a speaker and author.

Parachurch ministries still farther removed from the scandals, such as Campus Crusade for Christ, Compassion International, and Prison Fellowship, have grown steadily. Occasional years of decline in giving to some relief-and-development organizations are misleading, since publicity of world tragedy is by all accounts the biggest factor in influencing donor contributions to these ministries.

• The biggest benefactor of the televangelists’ scandals may be individual churches and denominations. For example, even without several million dollars from Jimmy Swaggart’s ministry, the Assemblies of God (AG) experienced solid financial growth last year.

Said denominational spokesman Everett Stenhouse, “A lot of the giving, no doubt, to the PTL and Swaggart ministries came from people within the Assemblies of God.… Many of those people, we are sure, have redirected their giving through the local church.”

Contributions within the Christian and Missionary Alliance church and the Southern Baptist Convention (SBC) have similarly grown. Tim Hedquist, vice-president for business and finance for the SBC executive committee, said the scandals “didn’t have one iota of effect on us.”

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