How Amazon Changed Church Giving Forever
Amazon (and eCommerce) has changed church giving forever. Here's what you need to know and how your church can respond before you get left behind.
January 22, 2020
These 27 brand new fundraising findings will revolutionize the way your church raises money.
February 19, 2020
Charitable giving is changing. Right in front of us, the way the church fundraises, resources its ministries, and grows its giving is becoming a very different animal than it was in the 20th century.
Fundraising tools are evolving rapidly. The psychology of generosity is shifting as wealth transfers from one generation to the next. Charitable giving data indicates that clashing values and market dynamics sometimes prompt financial volatility for nonprofits, and other times significant stability.
In order to architect an effective fundraising strategy for your church, you need to be working with the right data. If your strategy is data-informed, you place luck on your side. You no longer have to throw tactics at the wall to see what sticks. You must begin from an emperical, tested set of facts about the world as it currently is—and the state of generous giving as it currently is—and strategize from there.
A recently published Charitable Giving Report, released by Blackbaud Institute, does a great service for churches in this regard. They augment their findings with the GivingUSA 2019 Report, which delivers a similar kind of data—if you’re interested in this data, you can read Tithe.ly’s digest of those fundraising findings here.
The purpose of this post is to give you the 27 findings from this report that are most practically relevant for church fundraising.
Before we dig into the facts, it’s important to understand what the 2019 Charitable Giving Report actually is. It is an empirical study of the fundraising performance of 8,210 nonprofit organizations in 2019. In those organizations, over $36.3 billion of raised funds were analyzed, compared with the previous years, and synthesized into digestible charts. Of the 5,204 churches who used digital giving tools, $2.7 billion in digitally given funds were analyzed as well.
The results of these analyses are published in this report, and those findings supply us with the critical insights listed below.
The statistics have been organized into simple takeaways for your church. For those who want a deeper understanding of these facts, I recommend reading our digest of the GivingUSA 2019 Report.
The U.S. Department of Commerce estimates that e-commerce sales in the third quarter of 2019 accounted for 11.2% of total sales. More than that, giving grew 1.0% year-over-year compared to 2018, and giving grew 5.1% over the past 3 years. Among those amounts, 8.7% of overall giving in 2019 came from online giving.
This data shows us that peoples’ giving habits are following their spending habits. The more people accommodate the tools of eCommerce, the more fluent they are in the tools which enable digital giving, fundraising, and tithing. As we will see below, these changes are here to stay.
If churches want to benefit from the growing economy in the United States (the S&P 500 is setting new records every day), then they must adapt to the tools which have catalyzed this growth—namely, digital fundraising tools that have a streamlined architecture, integrate well with database management tools, and have features that make their implementation easy and powerful (such as Tithe.ly Giving).
The average age of U.S. donors is 63. This is why churches that attempt to cater primarily to young people often do not last. Because the average age of the U.S. donor puts them 4 years past the 401(k) withdrawal minimum age, this means that fundraising strategies should be tailored primarily to retiree-aged church members.
The reasoning for this is twofold: (1) It is easier to generate significant cash flow when your partners are able to give big gifts (especially for early-stage church plants), and (2) the demographic data proves that there is a working model here—the data sets the target donor persona for churches before their communications team can even tie their shoes.
A church fundraising strategy that isn’t running an active campaign to reach and partner with age 63+ donors in its church is leaving a lion’s share of potential funds raised on the table.
Donor retention is one of the biggest challenges facing donor nonprofits.
Nonprofits only retained 27% of offline-only first-year donors and retained 57% of offline-only multiyear donors. Those same nonprofits retained only 24% of first-year, online-only donors and retained 63% of multiyear, online-only donors.
This data could mean two things. It could mean that churches have an easier time getting people to give than keeping the donor relationship alive. It could also mean that churches tend to overemphasize giving and underperform in cultivating a strong relationship with their donor bases. These two variables—retention difficulty and retention-oriented fundraising performance—likely yield the data as we have it.
This data also teaches churches one more thing: There is a higher long-term donor retention for online giving. This means that people are more likely to give (or, their expectations for a donor relationship are lower) when they give through an online or mobile portal.
Faith-based organizations grew 2% in overall giving in 2019, compared with Arts and Culture and International affairs, which decreased 9.4% and 11.5% respectively, and Animal Welfare and Environmental institutions, which grew in giving 11.6% and 9.2% respectively.
On a three-year rolling trend, faith-based organizations grew in giving 4.7%.
The average donation amount in 2019 was $617. The average online donation amount was $148. While at first glance this might seem to indicate that offline donations are a more reliable fundraising avenue than online donations, the opposite is actually the case. Nonprofits seeking to increase their growth margins should be utilizing both offline and online fundraising methods simultaneously.
As proof, online giving grew 6.8% year-over-year in 2019 for the 5,204 nonprofit organizations analyzed who used digital giving tools. Organizations raising more than $10 million had an increase in online giving of 4.9%. Those raising between $1 million to $10 million had an increase in online giving of 7.1%. Finally, those raising less than $1 million grew their online fundraising 8.3% compared to 2018.
More than that, 31% of all mobile donations occurred in August 2019. 26% of all online donations were made using a mobile device. 8.7% of all funds raised in 2019 were from online giving. Small nonprofits received 14.1% of their total funds from online giving. Medium-sized organizations were 7.7%, and larger nonprofits remained at 4.0% in 2019.
This means that the smaller your church is, the more important online giving will be for growing your church resources to catalyze church growth.
Faith-based organizations grew their online giving 8.0% year-over-year and grew their online giving by 10.6% on a three-year rolling trend. More than that, faith-based nonprofits raised 10.0% of their total funds from online giving and raised 19.6% of their online funds in December.
Pastors and church leaders should take this data as a sign that online giving is an indispensable tool for raising capital. Look at these statistics—approximately 2% of the faith-based nonprofit’s annual budget (20% of the 10% raised digitally) was received in December through digital giving alone. Churches cannot afford to live, on average 2%—and far less 10%—closer to their operating budget merely because they don’t have the digital net in place to catch those donations.
The average donation in the faith-based sector is $319, compared to the overall average fundraising gift of $617. This could be for a number of reasons, one of which being that churches tend to promote a recurring, monthly giving model, compared with many other nonprofits that use a quarterly or annual approach, resulting in higher average gifts.
Evidence of this theory is indicated Faith-based nonprofit organizations raise, on average, 17.2% of their annual giving in December, compared with the industry average of 18%. The 2019 GivingUSA report shows that 29% of the total $427 billion raised in the U.S. in 2019 was raised by faith-based nonprofits, the largest percentage of any other sub-sector.
The 2019 GivingUSA report compares the actual numbers of the funds raised, where this study's report seems not to.
Finally, these trends are not local to the U.S. In Canada, despite a 1.6% decrease in overall giving, online giving increased by 11.8% and online giving accounted for 8.2% of total funds raised.
In the UK, overall giving increased 5.7%, online giving increased 4.1%, and online giving accounted for 3.4% of total fundraising.
In Australia and New Zealand, overall giving decreased by 2.2%.
Unlike GivingUSA, the this report does not mention inflation or include inflation-relevant data to augment the results. While reading the report, readers cannot be certain whether the numbers are inflation-adjusted or not. This could partially account for the fact that in this report, online giving to K-12 schools was reported to have a 2.2% increase year-over-year, but in the GivingUSA 2019 report, online giving to K-12 was reported to have decreased 2.1%.
It is also curious that the taxonomies of this report seem to differ significantly from the 2019 GivingUSA report, resulting in significantly different data. For example, in the GivingUSA 2019report, faith-based fundraising exhibited a much larger market share and growth performance than it does in this report. One way the sub-category taxonomy might affect this, for example, is in the segmentation of K-12 education from faith-based nonprofits, a distinction the GivingUSA 2019 report does not make.
Many private K-12 schools are in fact Christian schools—and many of them are ministries of churches themselves. This taxonomical variation between the two studies should have been mentioned, qualified, or explained in this report, because the stark contrast in the reported metrics is quite confusing.
Religious nonprofits will do well to take this data into account when architecting their fundraising strategies. The indications of this study are enormous, not only for the general market but for churches in particular.
The most protrusive implication of this study for churches is that those aiming to increase the effectiveness of their membership fundraising and capital campaign outcomes need to leverage offline and online fundraising methodologies simultaneously.
Growth is occurring in the faith-based nonprofit sector, but mostly for those nonprofits who have the organizational agility and foresight to rewrite their fundraising playbooks to thrive now rather than hopping on the train 10 years from now in a fight to survive.
Reflect deeply on these facts. Implement these statistics into your fundraising strategy meetings. As a result, you will have a more data-informed and empirically effective strategy before you even begin market testing with your church membership base.