That is what 72% of non-churchgoing Americans believe, according to a recent survey by a Southern Baptist polling organization. And you know what? They are absolutely right.
Churches are full of hypocrites -- every pastor knows this. For the record, so are Congress, the White House, corporate offices, law firms, gas stations, locker rooms, faculty clubs, newspapers, classrooms (except maybe kindergarten), NASA, the military, the EPA, the mainstream media, blogs, yoga studios, ballfields, and your living room.
Any place where you have people you will also have sinners, including hypocrites. What makes the Church distinctive is that it provides an opportunity to admit this up front, and try to do better. Most of those other organizations would rather keep on denying it all.