Nearly two-thirds of churches increased donations from 2010 to 2011, a sign that they are beginning to emerge from the financial downturn, according to a new study.
Churches that chalked up the biggest increases were those that relied primarily on donors under age 55, the study found.
What’s more, congregations that showed members details about their finances and taught them the value of charitable giving fared better than those that didn’t take such steps, according to an online an online survey of 3,100 mainly Protestant churches.
The age differences in giving were especially stark. Eighty-eight percent of churches with congregation members who were mostly 35 or younger increased donations in 2011, while only 60 percent of those with members who were mostly 55 or older did so. One reason for the increases, especially among young people, is that two-thirds of the congregations say they offer online-giving options.
Two-thirds of the churches surveyed allow people to give using credit cards, automatic bank deductions, and PayPal accounts.
These online transactions seem to give churches some financial stability, since younger donors tend to be more open to using technology to donate, says Aimée Laramore, associate director at the Lake Institute on Faith & Giving at the Indiana University School of Philanthropy, one of the sponsors of the study.
Ms. Laramore pointed to other steps congregations took that helped increase donations:
- They got creative. Twenty-seven percent of the churches adopted new fundraising activities or campaigns in 2011 as a way to appeal to different types of members.
- They educated their congregations. More than a third of the churches offer classes on personal finance or charitable giving to their members and other people who attend services.
- They talk about where the money goes. Forty-five percent of the churches said their clergy leaders were aware of how much has been raised and who gives. And churches that impart this knowledge to members regularly gained more gifts as the congregation’s financial needs became clearer, Ms. Laramore says.
People rally around the church when they know how its leaders are using their donations, she says, adding, “The transparency factor is just one that helps build trust. Donors in general are more savvy. People want to know, 'Where are our dollars going?’”
In addition, the report found churches were more likely to increase donations when they:
- Recruited new members and persuaded them to attend services regularly (or got everybody to go more regularly).
- Enlisted clergy leaders to make personal requests for donations.
- Made aggressive efforts to ensure that church members who had promised to give fulfilled their pledges.
The study showed that many churches hold a misconception about how well they did during the downturn.
Nearly 75 percent said they thought revenue had kept pace with inflation from 2007 to 2011 or increased during those years. But when researchers examined the books of the congregations, they found that less than 40 percent of the organizations had brought in revenue that kept pace with inflation over that time.
“This may indicate that congregational members and leaders tend to look on the bright side and are perhaps less realistic when it comes to their congregation’s finances,” wrote the study’s authors.
Churches that were successful at navigating the difficult economy had strong financial and management teams and sound bookkeeping and finance practices. They were also transparent with church members, the study’s authors wrote.
Says Ms. Laramore: “We have to look at fundraising as a ministry within the congregation, not just as a means of raising resources.”
In addition to the Lake Institute on Faith & Giving, the study was sponsored by the Alban Institute, the National Association of Church Business Administration, the Indianapolis Center for Congregations, and Maximum Generosity.