Religion Law Quiz #45 (Reconciliation of church financial difficulties)

The empirical evidence is that congregationalist churches tend to have more financial difficulties than hierarchical churches.  When a church is facing financial difficulties, what is the typical process that its leader goes through before finally addressing the problem? 

 

(Scroll down for the answer)

 

A 2015 Ohio State Law Journal article by Professor Pamela Foohey analyzed the process that church leaders go through when addressing their church's financial problems.  Prof. Foohey noted:

 

Consistent with research regarding how individuals experience their justiciable problems, leaders initially chose to do nothing about their organization’s financial problem or to turn to self-help techniques, such as approaching creditors themselves.  Only when creditors pushed for payment or when members or trusted contacts brought law to their attention did their thoughts and actions begin to change. Leaders then turned to other pastors, congregants, and friends to confirm that the situations were legal problems and to discuss concerns about what filing would say about themselves and their congregations. Leaders’ social networks also led them to attorneys, who discussed the benefits of reorganization. With this information, leaders rationalized their decisions to file, which allowed them to cope with their continued views of filing for bankruptcy as stigmatized and shameful.

 

Pamela Foohey, “When Faith Falls Short: Bankruptcy Decisions of Churches”, 76 Ohio State Law Journal 1319, 1323-34 (2015). 

 

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