A federated church is a church made up of two or more congregations from different denominations but which functions as one local church. The federated church model starting becoming popular in the early 20th century. As churches found themselves unable to maintain their buildings and pay the expenses of a pastor, two churches located near each other might “federate” in order to share expenses.
A federated church is not a sharing of resources by two churches. Nor is it a product of two churches of different denominations merging and then formally belonging to one or the other of the original denominations. A federated church is one local church made up of people from two different denominations who maintain their denominational affiliations.
For instance, in Chicago in the early 20th century, the Lakeview Presbyterian Church and the Lakeview Congregational Church were both struggling financially. They federated to become the Seminary Avenue Federated Church. The congregation maintained an affiliation with both denominations, and the individual members considered themselves to be either Congregational or Presbyterian. For a while they used one building as a community center and one building as the traditional church building. Eventually, they remodeled one of the buildings and sold the other.
In the theological climate of the early 20th century, this was seen as a viable option, as doctrinal distinctives were viewed as secondary to practical ministry in many mainline and liberal churches. What a church believed was less important than what impact it had on the community, primarily through the ministry of the social gospel. Once the essentials of the gospel are surrendered, it makes little sense to argue about secondary issues of denominational preferences anyway. This was a very pragmatic approach.
With the passage of time, the addition of new members, and the passing of older members, the ties to the original denominations usually grow weaker. (With the denominational differences being downplayed, this would seem to be the normal outcome.) In the case mentioned above, Seminary Avenue Federated Church eventually became the Seminary Avenue Community Church and actually joined a third denomination (one of today’s most liberal denominations), which was neither Congregational nor Presbyterian but a denomination that would be able to give them financial support—again, a very pragmatic approach.
If one were to encounter a federated church today (which would be a much rarer occurrence than 100 years ago), the word federated in the name would probably tell more about the church’s history than its current beliefs. The real questions to ask would be “Is the church a true federated church with individuals in the congregation attempting to maintain different denominational distinctives?” and “Regardless of the two different denominational churches that originally federated, what does the church believe and teach today?”