Shrinking Congregations, Smaller Donations

Cross on top of a mountain during sunset in background, for a planned giving article on church fundraising.

American churches may be facing a fundraising reckoning.

The word “recession” is on everyone’s mind. The stock market looks like a roller coaster. Fewer people are in the pews, and fewer dollars are in the collection basket. An entire generation of older, more generous parishioners is passing. And so far, “The Great Wealth Transfer” has yet to fill anyone’s collection plates to the brim (although that will change).

Add to those challenges the historical fundraising problems that churches face: a reluctance to discuss money; a disconnect between the clergy, leadership, and laypeople; and an unfamiliarity with planned giving programs and how they work. It all adds up to a looming threat.

We are the most religious nation in the West. We’re among the wealthiest nations in the world. Yet our houses of worship consistently rank near the bottom of U.S. charities when it comes to soliciting and closing major and planned gifts.

So what’s a church to do? Let’s take a deeper look at common church fundraising problems—and find some solutions.

Shrinking Congregations, Smaller Donations

Ignoring the Warnings

  • Since the pandemic, “one in five U.S. adults say they now attend religious services in person less often than they did before the pandemic.” (Pew Research Center)
  • In 2020, 47% of Americans said they belonged to a house of worship, down from 50% in 2018 and 70% in 1999. (Gallup poll)
  • 37% of regular church attendees and Evangelicals don’t give money to church. (Nonprofit Source)
  • 17% of American families have reduced the amount they give to their local church. (Nonprofit Source)
  • 7% of churchgoers have dropped regular giving by 20% or more. (Nonprofit Source)
  • Only 5% tithe (give 10 percent of one’s earnings), and 80% of Americans give only 2% of their income. (Nonprofit Source)
  • Christians are giving at 2.5% of their income; during the Great Depression it was 3.3%. (Nonprofit Source)

These are big problems if the collection plate is the main source of your church’s fundraising.

John Dickerson, author of “The Great Evangelical Recession: 6 Factors That Will Crash the American Church…and How to Prepare,” writes that churches stand “on the precipice.”

“The problem with the Great Recession wasn’t that nobody saw it coming,” his book states. “The problem was that the people who needed to listen, to put on the brakes, to adjust course, never got the message. Or else they ignored it. The American church stands today in a similar position … The church’s overall numbers are shrinking. Its primary fuel – donations – is drying up and disappearing. And its political fervor is dividing the movement from within.”

We’re experiencing that same church fundraising problem today: Leaders who think God will just miraculously provide are still avoiding planned and major giving programs, forgetting the proverb, “God helps those who help themselves.”

The Future is Not Bright

About 58% of church donations come from people 65 and over. What happens when those parishioners pass away? Who’s going to pass the collection plate, much less leave something in it?

And what happens as more services are held virtually? Churches need to look beyond the plate and explore alternate forms of fundraising. They also need to educate donors about legacy gifts.

Where There’s No Will, There’s No Way

  • Over 68 percent of Americans lack even a simple will. And that’s not counting those who haven’t updated their wills to account for life changes.
  • Less than 30 percent of Catholics and self-identified evangelical Christians have a will.

If the folks in your pews don’t have wills, how can you expect to get planned gifts? That’s why estate planning education is so important to your church fundraising program.

Planned Giving’s Role in Biblical Stewardship

Planned Giving? What’s That?

Most of the nation’s pastors (and boards, clergy, committees, and even congregants) are unfamiliar with planned giving programs and how they work. That unfamiliarity leads to resistance.

They have no idea how simple it is to give (and receive) a bequest; have never heard of a Donor Advised Fund; and have no idea they can accept a gift of life insurance or a retirement plan that could fund their mission for generations to come.

Yet churches have a major advantage over other nonprofits. They literally have a captive audience for their appeals and a prospect base for major and planned gifts that would be the envy of many other nonprofits: a mature, geographically concentrated group of people who know and identify with each other, and consider the church to be an integral part of their identities!

Church leaders must use this opportunity to connect with their congregation, explain planned giving, and ask for legacy gifts.

Legacy Gifts Increase Regular Gifts

There’s a very common misconception among fundraisers, board members, and nonprofits in general: That promoting planned gifts takes money away from annual giving. Yet nothing could be farther from the truth — in fact, it’s just the opposite!

If you’re facing resistance, show those Doubting Thomases numbers from experts like Russell James. His study of philanthropic giving (June 2020 UC Davis Law Review) found that including a charitable gift in a will generates a 77 percent increase in annual gifts from the same donors! Our statistics on wills and estate planning will shed more light.

Cash Gifts vs. Asset Gifts

  • According to the Center on Wealth & Philanthropy, the average retired household owns 58% more wealth in assets (stocks, bonds, real estate, etc.), but earns 35% less income than non-retired households. But retirees contribute about 69 percent more to charitable causes than non-retired households!
  • Nationally, only about 10% of the country’s wealth is held in cash
  • Why focus fundraising efforts on cash, when 90% of the wealth is in assets such as stocks, bonds, insurance policies, and real estate? This is why planned and major gifts programs are so important!

The Great Wealth Transfer

We’re on the cusp of the Great Wealth Transfer. Over the next two decades, it’s estimated that Baby Boomers will leave their children more than $68 trillion!

But how much will go to the Church? Experts say much of that wealth could be unintentionally lost to taxes, probate, and lawyer costs because of poor financial and estate planning.

That provides a perfect opportunity to educate your flock about estate planning. You’ll be helping them care for their loved ones while also showing them how to create a legacy of faith. More than 68 percent of Americans lack an estate plan, and many of them are your parishioners!

Fearing the Ask

Many church leaders worry that asking for gifts will anger their congregations. They’re uncomfortable with fundraising, unfamiliar with legacy giving … and unaware of what they’re missing out on by not seeking planned gifts.

Yet there’s a rich legacy of philanthropy in the church, and even a rich historical precedence for planned gifts.

After all, doesn’t Jesus say, “To whom much is given, much is required” in Luke 12:48?

Doesn’t Proverbs 13:22 state, “A good man leaves an inheritance to his children’s children?”

And in I Chronicles 22 and 28, didn’t King David’s bequest build the first temple?

God would not allow David to build the temple, but rather instructed him that his son Solomon would do it—after King David’s death. The king prepared by amassing riches that he then bequeathed to his son, along with instructions on the temple’s design. That’s the very definition of a restricted planned gift!

That means church fundraisers should be identifying high-net-worth individuals in their congregations, and asking for major gifts. They should be showing other congregants how they can create a legacy of faith through a bequest, with no impact on their daily cash flow. And they should be offering other types of planned gifts as well.

What Comes Next for Church Fundraising

It’s time for churches to take their fundraising to the next level.

The clergy needs to:

  • Get trained in Charitable Estate Planning
  • Learn the basics of planned giving (our Pocket Guides are a good place to start)
  • Assemble a team of attorneys, financial advisors, accountants, and tax experts
  • Create basic planned and major gift programs
  • Ramp up their marketing efforts to congregants

Spread the Good Word

Your church fundraising program already uses a number of powerful tools that you can adapt to raise awareness of planned giving. 

  • A regular column in the church bulletin could be dedicated to donor stories.
  • An occasional note from the pastor may point out the fact that a bequest allows a donor to make a much bigger impact than they’d thought possible, with no burden on their day-to-day cash flow.
  • A flier mailed to congregants could point out how gifting a retirement plan also becomes a way to invest in your own legacy.
  • A pamphlet left in the vestibule could illustrate the tax benefits of each type of planned gift.
  • A potluck primer for congregants on the importance of making a will can be used to point out the benefits of planned giving programs and congregation-focused estate planning.
Remember, your donors are “there every Sunday.” This is one thing Harvard would love to have.

Time Is Running Out

Collection plate donations aren’t going to dry up overnight. There’s still time to create or expand planned and major giving programs. But the work needs to start today.

The best time to start a planned giving program was 25 years ago. The next-best time is now.

Or, as it states in Proverbs 22:3: “The prudent see danger and take refuge, but the simple keep going and pay the penalty.”

Which one will your church be?

All of our blogs, products and services are proudly conceived, created, reviewed, and disseminated by real humans — not A.I. (artificial “intelligence.”)

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