GivingUSA is the longest running and most reliable source of data on US charitable giving. The research organization recently released their 2020 report that revealed some troubling trends for the church.
Some leaders may dismiss this research as irrelevant to their ministries, especially if they are cash flush due to PPP Loans and lower COVID-19 operating expenses. But the reality is, these trends are impacting almost every church. The impact of COVID-19 is likely to add to the downward giving trends and, perhaps, even accelerate them.
There is no doubt that giving habits are changing and you want to do what you can to be ready. If you want to remain fully funded, being aware of the changing giving habits of American donors is vital for your strategic planning efforts.
Five Troubling Religious Giving Trends
- Since 1980, giving to religious organizations has declined from 56.4 percent to 30.5 percent of charitable giving. In 2019, that dropped to just 29 percent. Of all the data in the GivingUSA study, this is the most troubling. For the past 40 years, we have been experiencing a prolonged cultural shift. Increasingly, donors no longer see giving to the church as an obligation or priority, but rather they see the church as one of several giving options. In response, financially sound churches are successfully describing the impact of their ministries and connecting giving with the church’s ability to change lives.
- Over the last two years, giving to religious organizations was down 1.7 percent (inflation adjusted). During this same period, every other category—with the exception of foundations—experienced an increase in giving. At Horizons, our Next Level Generosity Discovery process has revealed another disturbing trend—that a decreasing number of donors are making up the majority of giving in most churches. This giving paradigm is simply unsustainable.
- Sixty-nine percent of all charitable giving in 2019 came from individuals. This is good news for churches because individuals provide the greatest source of funding for most churches. However, churches that are intentional about creating a culture of generosity and making stewardship part of their discipleship path experience much higher levels of participation than churches that don't.
- Individual giving, as a percent of disposable income, has stayed generally consistent over the past 40 years at approximately 1.9 percent. Even in 2019 when disposable income went up approximately 4.5 percent, there was no material impact on the percentage of disposable income that went toward charitable giving. This finding further underscores the importance of biblical discipleship in growing generous donors.
- There were more than 1.3 million nonprofit organizations in 2018 compared to approximately 1.1 million in 2008. That represents a 12 percent increase in 501(c)3 organizations over the past 10 years. As more and more nonprofits emerge, the competition for philanthropic dollars rises dramatically. Because of the increasing competition, churches can no longer rely on members’ sense of duty, but must make the case for why their ministry is worthy of funding. It is not sufficient to simply teach generosity principles. Churches must also articulate and demonstrate how giving to the church is translating into life-changing ministry.
Diagnostics for Your Church
Despite our challenging realities, there is hope! Many churches are thriving financially. Church leaders who are proactively making stewardship and generosity part of their discipleship path are experiencing the highest rates of giving participation and percentage of income given. Generosity can be the catalyst for the transformation of your community.
Horizons has both quantitative and qualitative diagnostic options to help you gain a clear picture of the health of the giving culture in your church. We'd love to connect with you to discuss how these tools can help you understand these troubling trends and how they may be impacting your ability to fully fund ministry and make disciples.