Problems in church giving. Three steps to higher donations.

There were problems in the “church” in the area of millennial giving and donations prior to the Covid-19 global downtown.

The case has been made that there are significant systemic reasons millennials do not give to religious institutions as their parents and grandparents did. Those observations, documented below, hold true today. Let’s discuss how to solve problems in church giving. 

This updates some of those details and deliver some relevance to today’s audience. One of the earliest studies on the effect of the pandemic on church giving was conducted by CDF Capital. The following material is from their post in late March.

CDF surveyed 269 US-based churches to learn how Sunday services went on March 15. Afterward, they surveyed 93 churches about their Sunday services and offerings for the week of March 22. Here is what they have learned from their responses.

Church Attendance Statistics During COVID-19

Most churches have canceled in-person services and are losing the battle in church giving 

86% of churches did NOT hold in-person, on-campus Sunday services on March 22, 2020. This is a massive, yet predictable jump from 54% of churches declining to meet on March 15. Most churches are responding to the pandemic by either skipping Sunday services entirely, or instead engaging in some form of digital service.

problems in church giving may be solved with strategy

Half of churches have begun tracking online attendance

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Of churches surveyed, 52% are tracking online attendance. This will continue to be important as churches learn to estimate how many individuals are reached for every unique view online.

Online attendance averages slightly higher than regular in-person attendance

Most churches tracking online attendance reported higher-than-average views. Overall, online attendance was 8% higher than in-person attendance before COVID-19.

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Church Giving Statistics During COVID-19

When someone experiences a crisis, the way they handle their finances tends to change. The COVID-19 outbreak has left many Americans wondering how long they will still have jobs and be able to pay their bills. So how does such a widespread crisis impact overall church giving?

Churches continue to report abnormally low tithes and offerings

43% of churches reported a decrease in giving on March 22, 2020. Half of churches surveyed did nor provide giving information, and the remaining 7% reported an increase.

COVID-19-Graph-problems in church giving may be solved with strategy

Churches of all sizes experienced this decline

Churches report that giving has decreased by 29% since COVID-19. This is a sharper drop off than last week, when churches reported an average decrease of 13% in tithes and offerings.

COVID-19-Graph-problems in church giving may be solved with strategy

 

Given 2015 research by the NAE Financial Health initiative,  many churches will face wrenching choices. The median annual church budget in the United States is $125,000. The giving problem post covid-19 is not just a millennial giving problem.

In sharing some opinions shared in a late April piece on FaithandLeadership.com, we see a range of pandemic responses.

“Tim Wishon oversees the business side of a megachurch with the resources to survive the pandemic.

And the findings go on

Carmel Baptist has 5,000 members, an average of 2,500 worshippers at Sunday’s three services and a $10 million annual budget — $23.6 million if you include its K-12 private school and preschool.

But the church has a challenge in common with smaller churches: convincing members that giving online can be as meaningful a part of their faith life as dropping a check or envelope in the offering plate.

The church has robust, cutting-edge technology, from online giving to the livestreaming by which Carmel has been reaching its congregation during the pandemic.

Carmel’s constituency is largely suburban, middle-aged and professional. Members are comfortable living their lives online.

And yet, Wishon reports, 50% of the church’s giving pre-quarantine was put in the plate on Sunday mornings. Another 35% was mailed in, and 15% came in online.

Passing the plate is powerful

Passing the plate endures as a powerful, sacrificial act, he said, from farmers offering fruits and vegetables generations ago to children tithing part of their weekly allowance today.

Still, the pandemic may at least have introduced people to the ease of giving online.

Post-quarantine, 45% of Carmel’s giving has been online, Wishon said. But 55% still comes the old-fashioned way — through a check in the mail.”

“It is crucial, David P. King of the Lake Institute on Faith and Giving, said, for churches to lift up online giving not just as a convenience but as a theologically sound way to give.

Revenue just doesn’t flow the same way online

The 2019 study (reflecting 2017 data) found that 46% of churches offered online giving — a number that likely has risen with the recent shutdown — but that 78% of revenue still came through worship.”

Bill Wilson of  The Center for Healthy Churches, predicts that up to one-third of U.S. churches could be out of business by 2025.

He points to LifeWay Research that says 5% of U.S. churches will close within the year because of the pandemic. That’s five times the average closure rate for churches, according to The Christian Century magazine.

Wilson, who directs The Center for Healthy Churches, acknowledges that this is all conjecture, given the unprecedented nature and unknown length of the pandemic shutdown.

Big declines ahead

His best guess is that churches will suffer a 33% decline in giving in 2020, in part because there was no live Easter offering. It’s possible that the traditional surge in giving in December will help make up for lost ground, he said, but there’s no way to know.

Drawing on his experience with his organization, which has worked with several hundred churches during the past decade, Wilson estimates that one-quarter to one-third of churches operate on thin or no reserves.

It is this consultant’s opinion that the previously shared research numbers below will be even more extreme in the case of millennial giving in the post cover-19 global environment.

Millennials don’t give as their parents do or did

According to research by fundraising firm Blackbaud, Millennials born between 1981 and 1995 compose 25.9% of the population but account for just 11% of total U.S. charitable giving.

The $481 they give on average is less than the $732 given by Generation X (1969-1979) and the $1,212 given by Baby Boomers (1946-1964). Source: https://www.thestreet.com/story/14445741/1/why-millennials-are-more-charitable.html

According to research firm Massolution, Millennials make up 33% of donations on crowdfunding sites like GoFundMe or YouCaring.

Also, as the Better Business Bureau’s Give.org discovered, Millennials were the most likely (60%) of any generation to have donated to hurricane relief after Harvey, Irma and Maria.

They are also more likely (79%) to have researched hurricane charities than Generation X (59%) or Baby Boomers (56%). Source: https://www.thestreet.com/story/14445741/1/why-millennials-are-more-charitable.html

Historically, Religious groups have received the largest share of charitable donations. This remained true in 2016. With the 2.9% increase in donations this year, 31% of all donations, or $127.37 billion, went to Religious organizations.

Much of these contributions can be attributed to people giving to their local place of worship. Source: https://www.charitynavigator.org/index.cfm?bay=content.view&cpid=42

60% OF MILLENNIALS DONATE AN AVERAGE OF $481 TO NONPROFITS EVERY YEAR

(Qgiv, 2015) Churches need to recognize that it’s not that Millennials aren’t givers, they just don’t share the default opinion of prior generations that giving charitable donations to the church is the best way for donations to be distributed. They want to know where it’s going and how it’s being used.

44% OF MILLENNIALS PREFER TO USE THEIR MOBILE PHONES TO MAKE SMALL PURCHASES  (Snowball Fundraising, 2016)

Churches who want to engage Millennial donors are faced with the challenge of demonstrating the good that they’re doing in their communities and around the world.

Source: https://pushpay.com/blog/church-giving-statistics/

If we hope to problems in church giving, “With census data showing that Millennials have surpassed Baby Boomers as the largest generation, it’s more important than ever that we understand their giving habits,” said Rick Dunham, CEO of Dunham+Company, which consults with nonprofits on their fundraising and marketing needs.

They give, just differently

“A growing body of research shows that Millennials are more engaged in philanthropy than we thought. Our new study seems to indicate that Millennials will give more to charity as they mature.

Anecdotally, we know that factors like job status and student debt can limit how much they give at this stage of their lives.”

Of those surveyed in the US:

  • Millennials gave $580 to charity in the past year, compared to $799 for Gen Xers, $1,365 for Baby Boomers and $1,093 for Matures;
  • Giving Millennials averaged 40 volunteer hours over the past year, compared to 34 for Gen Xers, 41 for Baby Boomers and 70 for Matures; and
  • Twenty-five percent of Millennials attend church once a week or more, compared to 27 percent of Gen Xers, 28 percent of Baby Boomers and 36 percent of Matures.

Millennials surveyed gave an average of $416 to places of worship and $96 to faith-based nonprofits in the past year – compared to only $84 to education, their next biggest type of contribution. In addition, 22 percent of Millennials said they planned to give more to places of worship in the coming year.

This may show signs of hope in solving problems in church giving.

Millennials agreed with the idea that charities are more effective than government in providing important services, with a mean score of 3.4 on a scale of 1 to 5, with 5 expressing the highest confidence in charities.

Technology will have to lead the way to solve problems in church giving

Not surprisingly, Millennials were more likely than other generations to use technology and be influenced by it.

Fifty-one percent have given a gift through a charity’s website, 37 percent said they have used a smartphone to give through a charity’s website.

 36 percent have been motivated to give by something they have seen on a charity’s website. Source: https://www.prnewswire.com/news-releases/survey-of-millennial-donors-indicates-they-will-likely-give-more-as-they-mature-300462347.html

http://www.themillennialimpact.com/sites/default/files/images/2018/MIR-10-Years-Looking-Back.pdf

Source: The Millennial Impact Report on giving in cover-19
 

“To engage millennials, causes have to be much more emotional, much more authentic.”

Not only do millennials want to engage together; they want to think together. They value peers’ opinions and turn to them first for information.

As interviewee Simon Moss, co-founder and managing director of campaigns at Global Citizen, alluded to, today’s 24-hour news cycle and the easy, immediate access to information has put millennials on a far different path for gathering data than previous generations.

“To engage millennials, causes have to be much more emotional, much more authentic,” Moss said. “What we’re seeing is that they don’t much care about straight-up news reporting.

They want the opinion mixed in; as active consumers of media, they will decide what they think.

And a lot of their reaction is just as much, ‘What do I think about the messenger and the issue?‘ as it is, ‘What do I think about the message?’” Source: http://www.themillennialimpact.com/

So how might your church or religious institution begin to attract millennial donors and solve problems in church giving?

When you begin to assess the quality of your “ask” to the audience, consider what the audience’s desires are as they relate to key strategic factors.

In the strategy canvas below, I’ve shared two disparate areas where donations are made. One is the traditional religious institution and the other is a relative newcomer to the donation world, a micro-donation platform.

Blue Ocean Strategy Canvas for church giving study

In the strategy canvas above, you see the horizontal line features 6 strategic factors known to be key in decision making for millennials around giving.

The vertical axis provides measurement from low functionality to high functionality or utility.

In attempts to solve problems in church giving, donating has become more mobile and online friendly. Over the last 6 years nearly 75% of churches are now providing some form of mobile or online giving.

Millennials did 40% of their smaller purchases on mobile in 2017.

They are a mobile-first generation.

Most will not even visit your website unless it is on mobile.

Ease of use should not be interpreted as putting a few dollars in the plate as it passes during the worship service. Most online and mobile giving takes place the other 6 days of the weeks.

Churches that provide and promote online giving now see more coming in via the other days of the week than during the worship service and may be helping to alleviate their own problems in church giving. 

Millennials see little transparency and connection to the recipient in institutional church giving.

Online micro-lending and micro giving platforms afford the millennial to know exactly who is receiving their money and exactly how it is to be used. Little about church giving matches the transparency of these competing platforms.

These two strategic factors lead directly to the next two.

Cause authenticity and efficiency of the donation. Millennials make up a significant percentage of the donations associated with GoFundMe and IndieGoGo.

Women, by the way, make up a majority percentage of donors and recipients in micro-lending platforms.

In a recent conversation with a faith-based children’s home Public Relations Director, I asked, what is the home’s single biggest hurdle? His response?

“I’d have to say that our biggest challenge is developing a younger donor base. Many of our donors have been faithful supporters of the Home for many years. We are doing our best to encourage their children and grandchildren to continue to support the work here, but our greatest challenge is developing the younger donors.”

Conclusions and recommendations.

If you’d like to attract more donors, remote members of the community of faith, millennials and Gen Z’s to your cause do the following things.

1) Use platforms for giving that allow complete transparency on the cause and the recipients.

2) Allow for “relationships and emotional adoption” in the giving. The millennial giver and now all donors want to give to humans that they feel they could literally go help if they wanted to do so.

This doesn’t mean citizens of a country or a community-based effort. They will, however, give actively when it’s disaster based.

3) For ongoing campaigns, take the campaign down to a specific person and prove the donation helped that one individual. 

The recovery for churches that had previously adopted online giving will be shorter and less painful for those that didn’t have these mechanisms in place prior to the pandemic.

Will your community of faith have digital giving at its center in the future? If not, you’re selling the mission of the church short.

It’s said over and over that the history of the church is in members bringing their best to the house of worship, or the sacredness of the passing of the plate is imperative to the worship experience.

I would argue that had technology been available 3000 years ago, there would have been histories written extolling the sanctity of online digital giving.

It’s time for church leaders to bring online giving into the mainstream and meet the culture where it lives.

If you have desires as a leader of religious institutions of any type and want to discuss how Blue Ocean Strategy may help grow your mission, don’t hesitate to schedule a free chat. Schedule that call here.

Sherman G. Mohr is an Insead Blue Ocean Strategy Institute Certified Blue Ocean Strategist residing in Nashville TN. He’s a Co-founder of marketing, tech, and healthcare firms and has worked in consulting religious organizations in online community technologies and giving platforms.