Churches close, but they don't generally go bankrupt. Even in America, where there are lots of small religious groups and lots of religious debt, bankruptcy is rare. It doesn't happen, except when it does.
Which is not to say it happens for no reason.
Pamela Foohey, of the University of Illinois College of Law, looked at more than 450 congregations filing for bankruptcy over a six-year period. Her study shows that the Protestant churches going bankrupt almost always cited external circumstances, out of the control of the religious leadership. The effect the financial crisis had on giving was referenced a lot in court documents. Natural disasters, such as Hurricane Sandy, were said to precipitate the financial problems.
Yet, while storms both natural and economic surely took their toll, they don't actually explain the religious bankruptcies. The 2008 financial crisis touched everyone, but not everyone went bankrupt.
A common factor among these religious groups, Foohey found, was their ecclesial organization. That is to say, they tended to be churches built around the charisma of one person.
The composition of Christian affiliated debtors does not mirror the breakdown of Christian congregations by denomination in America. Many of the Christian affiliated debtors are non-denominational ... These congregations likely are not subject to broad governing bodies that may monitor their finances and provide assistance if necessary, potentially motivating their bankruptcy filings.Foohey found that a statistically significant number of the bankrupt Protestant churches were lead by one person who was not subject to oversight. Nor supported, in cases of crisis. For these churches, their financial fortunes "generally rise or fall with leaders who energize their congregations."
A death, a scandal, a bad business practice -- these things were the beginning of the end. In the context of an economic crisis or a natural disaster, there was no structure in place to check the leader and prevent a misstep, or to catch the congregation and help it out of financial crisis.
Bankruptcy became an option because other options weren't available. Other options weren't available, though, for ecclesiological reasons.
Of course, lots of Protestant churches are organized around the charisma of a single leader, and they don't all go bankrupt.
As church historian Miles Mullin noted in the context of a recent scandal involving a celebrity megachurch pastor, personality-driven leadership is a hallmark of American evangelicalism. It dates as far back as George Whitefield, who rejected the established ecclesiastical norms, which would have restrained him. It's so prevalent today as to be the norm, "as individuals can friend, follow, and subscribe to a constant stream of thought-forming and ministry-shaping information that comes via Facebook, Twitter, and blogs." The standard expectation is for a dynamic religious leader, all energy and charisma, limited only by the boldness of the vision.
At least sometimes, thought, that form of leadership means there's no one and no structure to protect a religious organization from the failings of its leader.