If the past two years have taught us anything, it’s that the unexpected is to be expected. Real disruptions are something most churches continue to underestimate in their planning and strategy. Whether it’s the global pandemic or mass movements calling for social reform, what otherwise seemed like a predictable and linear industry remains mired in continued seismic shifts. This year, like the last few years, remains the same but for newly disruptive reasons.
Two giving shifts to watch for now and for the rest of 2022…
1. Inflation is having a real (and negative) impact on giving. If macroeconomic forecasting holds, rising inflation is weakening the ability of everyday givers to contribute to their churches. When the value of your dollar decreases due to inflation, your ability to give church contributions will shrink accordingly. While inflationary pressures impact top givers less than most of us, it will very much impact everyday givers as the purchasing power of their discretionary income disappears under inflation. For younger and newer givers, this is likely the first time they have lived through a period of significant inflation, and we should expect a pullback from giving to churches from these givers.
From the 2022 Giving USA Report, giving to religion increased 5.4%, or +.7% adjusted for inflation. Religious giving has remained flat for the last several years and the impacts of inflation are just now starting to be realized. Givers gave 1.8% from disposable income, down from 2% the previous year. To put this in perspective, we haven’t seen a 1.8% giving percentage in over 100 years – in fact, giving during the Great Depression was higher!
2. Rising interest rates are materially impacting giving this year. To combat inflation, the Federal Reserve (and other central banks) are continuing to raise interest rates. While this is a monetary antidote to curb inflation, it is generating pressure on businesses that rely on debt financing (as that debt becomes more expensive) and moving capital markets toward debt and away from equity (similarly to what we’ve seen with the weakening stock market performance). In these effects, we may see an impact on top givers whose wealth (and ability to give at scale) is often linked to performance in equity markets.
We may ultimately look back at 2020 as the beginning of a truly generational shift in giving that long outlives the pandemic. The need for innovative giving has never been greater, yet the current crisis has revealed that many conventional giving options hamper church funding potential.
So, what can we do?
As the church, we cannot avoid the inevitable – inflation (already at a 41-year high) will continue to rise, and interest rates will continue to increase. Our buying and giving power are diminishing, but there is real and tangible hope just within reach for most churches. Major gifts, in the form of tax-saving and income-producing vehicles, are, for the most part, overlooked by mainstream Christian churches. Where universities and major non-profits have thrived through presenting these funding opportunities to their donors, churches have ignored or have been afraid to ask their givers to consider creative funding options. Did you know that an average major gift is 10 times the amount of a giver’s annual gift? Now is the time to fully fund the most significant cause of all – the salvation of the world through Christ!
Where to start?
Oftentimes churches ignore more sophisticated giving options because of a lack of knowledge, expertise, or the bandwidth to take on this type of ministry. This is where MortarStone comes into the picture. We provide you with the giving analytics to make strategic decisions, and we come alongside you to help fully develop and run your major gifts ministry. Every part of this ministry is covered – from frontend discovery to complete gift administration and conversations with your givers. We take the burden off you and act as an extension of your church team to secure major gifts that sustain your ministries today and for the future.
With the fall giving season quickly approaching, don’t let your budget reflect a shortfall for 2022, let us help you increase giving substantially with creative gift options. Schedule a free 30-minute major gifts consultation, and we will build a customized gift planning report with information about your current giving health.