Charitable giving to religious organizations was flat in 2010; equaling the amount given the previous year. By contrast, charitable giving to all causes was up 3.8 percent as reported by Giving USA Foundation (AP article).
Speaking of all charitable giving, Patrick Rooney, executive director of the Center on Philanthropy at Indiana University said, “If giving continues to grow at that rate, it will take five or six more years just to return to the level of giving we saw before the Great Recession.”
So, where does that leave local congregations? Behind the eight ball.
It is worth repeating, charitable giving to religious causes (think local congregations) significantly trails charitable giving to all causes --- and it is going to take five to six years for all charitable giving to return to 2007 levels. Thus, it will take even longer for congregational giving to recover.
Why is giving to religious congregations lagging behind all charitable giving?
Local congregations always tend to lag national financial charitable giving trends. A recession hits the stock market (that is where we see it first) and about six months later church contributions begin falling off. To illustrate, the blue-haired lady doesn’t know about a recession until she goes to the bank to renew her certificate of deposit (six months into the recession). Churches feel recessions when individual members begin cutting back on their giving, and church members resist until they have no choice but to reduce their giving, maybe six months or more into a recession.
Church giving is salary based. Since Moses, we have preached the tithe. Contributions to churches are based on take-home pay, not gains in the stock market or real estate. Salary based giving tends to be tied more closely to U. S. unemployment numbers than growth in the stock market. And here is an important difference, the vast majority of non-religious charitable giving comes from stock market gains, not growth in salary.
What does this mean for financial receipts to local congregations?
If, if it is going to take all charitable giving five to six years to return to pre Great Recession levels, it will take congregational income a decade to recover. It is going to be a long haul for local congregations. It is going to feel like ’40 years in the wilderness.’
Churches need to prepare for the long journey. They need a new paradigm to survive the financial wilderness that is upon us.
Why has my church’s giving not declined?
Some church giving patterns have not declined with the Great Recession. This might happen for two reasons. First, the church may be located in a ‘recession proof’ context. Churches in towns heavily dependent on government spending (lots of government workers) tend to weather recessions very well. As a different example, Richmond tends to be somewhat ‘recession proof’ because of the wide diversity to its economic base (lots of different companies doing very different things).
There is a second reason churches weather recessions well; the church’s operating budget is far below the giving potential of its members. A congregation giving 95% of its potential will feel a recession fairly quickly; there is little room to soften the financial downturn. A church with an operating budget at 65% of the congregation’s giving capacity might weather a modest recession quite easily.
What is a church to do?
It is a great time for a paradigm change. When money is really tight, congregations are willing to consider significant change. Live into change. As Dean Galindo says, “don’t waste a good crisis.” Four simple keys:
Focus on mission (the congregation’s mission)
Delete ineffective programs (stop doing them)
Cut personnel. Ministers hate to hear me say, “The more ministers do -- the less members do.” In the twenty-first century we need to energize laity.
Move operating budget dollars from buildings, personnel, ‘missions’ and debt toward programs and hands-on ministries of the congregation.
Finally, the pastor has to lead the parade. Significant change in congregations will not occur without the enthusiastic support and effort of the pastor. We can talk all day long about whether this is the way things should be in local ministry. I am describing the only reality we know, paradigm shifts do not happen without the full support and hard-push of the pastor of a congregation. Pastors must lead the parade toward congregational financial integrity.
Grace and some measure of Peace,