After the economic crisis that began in 2008 triggered the Great Recession, news media reported countless stories of the impact on individual churches. Few of those stories included trends, because the data simply wasn’t available. Today, the numbers are in, and some of them are surprising.
The School of Philanthropy at Indiana University recently published the findings of a survey they conducted with more than 3000 churches. How did the Great Recession impact churches and how have congregations responded? Here are some key findings.
- U.S.congregations are generally improving financially. However, those with older attendees and those whose clergy are uninformed about congregational giving are experiencing the greatest challenges.
- Despite overall positive trends in fundraising receipts, pledges, and budgeting in 2011, the majority of congregations’ revenues have not kept pace with inflation in recent years.
- Changes in average congregational gift size and the number of donors are the main drivers of fundraising success.
- Congregations are increasing their budgets in the areas of missions and revenue-generating activity.
- Congregations have more work to do in the area of educating congregations on financial planning and charitable giving.
- The majority of congregations employ some type of electronic giving.
Are these findings consistent with what has happened at your church? If you have been successful in one of these areas, to what would attribute your success?
At my church, we weathered the Great Recession well, not that any one of us can take any credit. I do, however, believe that maintaining adequate cash reserves before the recession hit was one critical reason we were able to stay focused on our mission and vision. And by being transparent and letting our congregation know that we would live on what was given, we were able to build trust in a time of uncertainty.
What did your church or ministry do that helped it get through the Great Recession?
Seemingly, we can’t go anywhere without hearing about the looming “fiscal cliff” and various potential consequences of what may happen if Congress doesn’t act. Plus, we don’t know exactly what may come out of last-minute negotiations. So how is this situation impacting donors and their decision to give?
According to the Wall Street Journal, many wealthy Americans have begun to give to donor-advised funds (DAF) at record rates, starting in the third quarter of 2012, to avoid potential increased taxes. By using a DAF, a donor receives the tax deduction at the time of the contribution but can decide how to distribute the funds to qualified nonprofits at a later date. What has been reported is that many wealthy donors may wait until 2013 to distribute donated funds. This may mean greater income coming in the final weeks of 2012 or during 2013 than in prior years. Some evangelical nonprofits have reported seeing bigger gifts than last year.
On the other hand, for many other Americans, the uncertainty is causing fear. Many individuals are afraid to make any move, so they are holding on to what they have and feeling paralyzed by the uncertainty. This, along with continued concern over the growth in the economy, has led many Americans to be cautious with expenditures and giving.
According to a poll conducted by the United Way Worldwide, without charitable tax incentives, 30% of Americans would reduce their charitable donations.
So what are you seeing at your ministry? Have you seen an increase in donations? Are stock donations up? Are some of your faithful year-end donors staying on the sidelines?
According to GuideStar’s recent survey of nonprofits, for the first 9 months of 2012, 34% of nonprofits reported an increase in donations while 37% reported a decline. These mixed results are attributed to the lasting effects of the Great Recession and slow economic recovery.
The major cause cited by 77% for the decline in donations was smaller gifts from individuals when compared to previous years. The other major cause was fewer individual gifts.
In addition, 30% expected year-end giving to be higher than last year while 29% expected giving to be lower.
Surprisingly, 42% of nonprofits were planning on increasing their 2013 operating budget when compared to 2012. 32% will keep budgets the same and 24% will reduce their budget.
How are you and your ministry viewing 2013? Are you planning for an increase in donations? Planning for things to be about the same or lower? With so much in economic uncertainty right now, cautious and prudent planning for 2013 seems appropriate.
Grateful we can trust God for the just the right amount of resources we need.