Overall fundraising revenue for 334 churches, synagogues and other faith-based organizations representing nearly $1.2 billion in annual revenue grew 3.5 percent in the three months ended in October, compared to the same period a year earlier, according to a new faith-based specialty index in The Blackbaud Index that tracks fundraising revenue for congregations and other faith-based organizations.

In the same period, online giving at 202 congregations and other faith-based groups that raised a total of more than $110 million over 12 months grew 16.7 percent, compared to the year-earlier period.

Overall giving and online giving

Based on data from 3,828 charities that raised more than $12 billion in the prior 12 months, The Blackbaud Index reports that overall charitable giving grew 2.3 percent for the three months ending October 2013, compared to the same period a year earlier.

Among 3,097 charities that raised nearly $1.7 billion online in the prior 12 months, online giving grew 9.9 percent in the same three-month period, compared to the same period a year earlier.

“This year has been a better year for the nonprofit sector than it has been in a number of years,” said Chuck Longfield, Blackbaud’s chief scientist and creator of the Index. “Giving is very dependent on the stock market, which is at an all-time high. With the improving economy, some of the uncertainty has been removed. People tend to donate more when they feel wealthier, and the stock market helps with that.”

Religious giving grows but its share of overall giving dips
After flat years in 2011 and 2012, giving to religion has grown slightly in 2013. And while it receives the biggest share of giving of any charitable subsector, its share in 2012 fell to 32 percent from 33 percent in 2011, according to Giving USA.

“If religion wasn’t doing well, that’s quite a drag on all philanthropy,” Longfield says.

Rick Dunham, president and CEO of Dunham+Company, a Dallas-based consulting firm that works with faith-based organizations, says giving to his clients is up, with growth ranging from a few percentage points to 10 percent or more.

Who’s giving to religion?
While research consistently has shown a steady decline in attendance by younger people at religious services, especially for mainline denominations, that decline has had little impact of overall giving to religion, says Dunham, who is a member of the board of the Giving Institute, which publishes the annual Giving USA report, and a member of the editorial board of Giving USA.

“We’ve known for many years, and Giving USA has pointed out consistently, that there is a direct correlation of frequency in attendance at religious services and giving,” he says. Giving to religion fell during the recession mainly because, just as in any sector, people who give were hit by the economic downturn and had less to give.

And religion has struggled to rebound “because fewer people are attending religious services frequently and there is a smaller core of givers,” he says.

But with the rebound in the economy, that core group “continues to drive giving to religion because the core group who attend religious services frequently are giving,” he says. “Those are people who give the most.”

And the major source of giving to religion “continues to be the ‘classic 50-to-65-year-old’ who is at a stage in life with more money to give.”

Failure to communicate
Chris McLeod, a ministry strategist who advises churches on capital campaigns and planned giving for Horizons Stewardship Co., a national consulting firm in Cabot, Ark., says churches are losing market share of giving to faith-based groups overall.

“The failure of churches to effectively communicate the impact that their mission and outreach programs are having in the community has often left many of their members choosing to give directly to these community-based nonprofits,” she says. “So less of their charitable dollars are being channeled through the church.”

Churches, she says, “don’t know how to say thank you, they don’t know how to ask, and they don’t know how to communicate the impact that a member’s gift is having.”

Communications infrastructure
Churches in mainline denominations also tend to have “very weak communications infrastructure,” as well as young communications staff “who are more like newsletter producers, as opposed to communications strategists,” McLeod says.

In comparison, new “megachurches” and nondenominational independent churches “are investing more money and human resources in communications because they realize how critical it is,” she says. “If you look at giving at megachurches and independent churches, it’s significant, both in terms of giving by the church in the community, and inspiring their members to make significant gifts to the church.”

Megachurches and nondenominational churches also are much more sophisticated than mainline churches in using digital communications and direct mail, she says, and at “saying thank you, communicating impact and asking,” and are particularly good at cultivating larger donors.

Sending the right message
Dunham says houses of worship need to provide “cogent, clear teaching on the Biblical mandate around giving and why that’s important.”

While the Bible makes clear statements about debt and the handling of money, warning, for example, that “money will never provide the security you’re looking for,” he says, there still is a “tension between consumerism, which is primarily the cultural norm in America and drives our economy, and stewardship.”

So it is “incumbent on pastors and leaders to be speaking to the issue of how we view money and the role of money in our life as a faith-based person,” he says.

“Ultimately, people give out of a heart that’s moved to want to support something,” he says. “It’s not an insignificant issue. There has been a lack of teaching of this in the church.”

Church leaders also need to help people understand “what they’re investing in” when they give to the church, and that means “selling the vision and mission of that house of worship, why we exist,” and then “putting numbers to why that’s important.”

Relationships and significant giving
A growing number of religious organizations are investing more resources in planned giving and major giving, a trend that makes sense because the wealth that has grown the most, fueled by the booming stock market, is controlled by the wealthiest 3 percent of the population, Dunham says.

“Being able to tap that is critical,” he says.

Making a significant decision about a big gift ultimately is “very personal” and rooted in “relationship,” he says. “That is the apex of relationship fundraising, building a strong relationship with the donor so you can understand what their priorities are and so you can meet their priorities.”

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By Todd Cohen, founder of Philanthropy North Carolina, providing news, writing and advisory services for nonprofits.

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