Expert says churches must adapt to new profile of charitable giving

It’s no secret that in the Presbyterian world money is scarce at every level, from the denomination to the individual church. Folks hear of congregations without pastors, buildings locked and sold, yet another round of layoffs.

Part of the reason is fewer bodies in the pews, as mainline denominations slip away from center stage of American religious life, with the Presbyterian Church (U.S.A.) having dropped from its peak membership of 4.25 million in 1965 to about 2 million today.

Giving to churches, however, is not determined solely by how many people are in the pews.

William G. Enright, the former pastor of Second Presbyterian Church in Indianapolis, is now executive director of the Lake Institute on Faith and Giving at the Center on Philanthropy at Indiana University. Earlier this year, Enright spelled out trends in religious giving for the General Assembly Mission Council.

Part of his bottom line: People of religious faith continue to give — often generously. But their money may not go to churches or denominations.

Also: churches need to become more comfortable talking about money.

“Something significant is happening when it comes to religious giving,” Enright told council members during a webinar. “In short, it seems our indifference to money talk has finally caught up with us … People have money and they continue to give. Religion is just no longer their charity of choice.”

Here are some research findings Enright shared.

Faith and generosity. “People of faith are generous givers,” he said. Studies show a person’s attendance at worship is the single best indicator of overall charitable generosity. Those who attend worship regularly (two or three times a month, at least) are three to four times more generous than those who attend less frequently, or not at all.

Small minority gives most. The 2008 book “Passing the Plate: Why American Christians Don’t Give Away More Money,” by Christian Smith, Michael O. Emerson and Patricia Snell, examined contributions by church-attending Christians in the U.S. Findings included: 5 percent of churchgoers gave more than half the contributions; 10 percent accounted for 65 percent of the donations; and 20 percent — that’s one in five churchgoers — gave nothing at all.

Since a small group gives a big chunk of the budget in most congregations, congregational leaders need to know the profile of that most generous group, Enright said. He said he had worked with a congregation where the leaders realized almost all their top givers were elderly — in one case, 99 years old. What happens to the congregation’s budget if that generous top donor should die?

Smaller share. From roughly 1970 to 1995, about half of what Americans gave to charity went to religious organizations (congregations, denominations and parachurch groups). Now that share has dropped to about one-third, Enright said.

Giving to religious organizations remains the single largest share of all contributions, at about $101 billion, according to the Giving USA 2010 report. The next biggest chunk went to education, with $40 billion, or 13 percent of total donations.

More competition. Simply put, there are more religious groups vying for dollars. From 1995 to 2010, the number of religious groups registered as charitable organizations jumped by 163.5 percent, Enright said. “It means the competition is much more keen” from nonprofits in general and specifically from faith-based nonprofits, he said. “And it means we can no longer just take for granted that people are going to donate to us out of some sense of loyalty. It means we really have to focus on, ‘What is the story that we have to tell?’”

Shifting religious culture. The 2009 Congregational Economic Impact Study, a cooperative effort of the Lake Institute and Alban Institute, looked at which types of congregations fared better during the recent economic downturn. It found that fundraising success was likelier at congregations where attendance grew over the previous five years. It also showed that congregations heavily dependent on endowments or where the average age was 65 or older tended to be hit harder by the recession.

Generational differences. Researchers also see generational differences in charitable giving.

For those born before 1929, about 68 percent of charitable giving goes to religious organizations, with an average gift of $1,180. About 57 percent attend church once a week.

For baby boomers, born from 1946 to 1964, about 60 percent of charitable giving goes to religion, with an average gift of $1,380. About one-third attend church once a week.

Millenials, born since 1981, often lack firm footing in a career and have yet to reach their top earning power. About 57 percent of their charitable giving goes to religion, with an average gift of $722. About 28 percent attend church once a week.

“You don’t want to neglect this generation,” Enright said of the millennials. He said they want to be represented at the leadership table, want to know exactly how their donations will be used and prefer to receive updates on charities’ work electronically. He said relationships matter to millennials — so if a close friend or relative asks them to donate to a particular charity, they pay attention.

Impact of economy. Giving to religion remains surprisingly steady even during a recession. The sociologist Robert Wuthnow has described religious giving in America as “basically local,” Enright said. And for many “their local congregation is a bit like their family. It matters to them” — so many churchgoers will trim spending elsewhere first.

The 2010 Study of High Net Worth Philanthropy, conducted by the Center on Philanthropy, profiles charitable giving by households with an annual net income of at least $200,000 or with invested assets beyond their homes of more than $1 million. Enright said it found some shifts in giving in response to the recession.

Among those high net-worth households, giving to all causes during the 2007-2009 recession declined by nearly 35 percent — with many households dropping three or more organizations from their giving lists.

Among factors that favorably influenced charitable-giving decisions were the donor’s personal experience with an organization and its public image.

“Relationships and personal involvement are very, very important to donors when they look at their charitable giving,” as well as “good business practices and essentially fiscal transparency,” Enright said.