What Should Churches Expect with Giving in 2024?

What Should Churches Expect with Giving in 2024?

Perhaps the most noted voice in nonprofit philanthropy is Dr. Russell James, who serves as the Professor and CH Foundation Chair in Personal Financial Planning and the Director of Graduate Studies in Charitable Planning at Texas Tech University. As an Estate Attorney, Financial Planner, and Researcher, Dr. James has written four books and has been published in numerous professional journals. MortarStone’s Tim Deatrick recently had the opportunity to sit down and interview Dr. James on a variety of topics concerning major gifts and legacy giving.

Tim Deatrick: Dr. James, it’s good to have you with us today. According to Giving USA, charitable giving experienced a notable decline over the past two years. What should churches expect related to giving in 2024?

Dr. Russell James: Giving to religious causes, including the church, will do exactly the same thing that it has done for the last 35 years, and that is it’s going to continue to decline. Every year, giving to religious organizations as a share of overall philanthropy has incrementally declined.

Tim Deatrick: What would you say are the factors contributing to that steady decrease?

Dr. Russell James: When you look at the data, I think there are two things. My dissertation was on religious charitable giving which was based on research using massive national data sets. One of the first things I learned from that is if you discover somebody’s faith or denominational affiliation, you learn approximately nothing about their charitable giving. However, if you learn about their frequency of attendance at religious services, that tells you almost everything about their charitable giving. We can definitely see a trend where the frequency of attendance at religious services is going to predict religious giving. Attendance has been dropping consistently over the years; therefore, we see a lagged result of that effect.

There’s a second thing that is different about religious charitable giving that we see in the data when you look at the typical nonprofit organization. The Fundraising Effectiveness Project includes data from over 8,000 non-profit organizations. Part of their findings reveal that the typical nonprofit organization gets about half or a little more than half of all its dollars from the top one-half of 1% of its donors. So, that is normal in nonprofit philanthropy. The top one-half of 1% of your donors will give the majority of dollars. However, when we look at religious organizations, particularly when we look at churches, those high-capacity donors are not making their large gifts to those organizations. Instead of seeing that top of one-half percent which delivers approximately 55% of the dollars to nonprofits, they are only delivering about 15% of the dollars to churches.

This does not mean that wealthy people don’t give to religion. In fact, it’s just the opposite. As wealth increases, the propensity to give to religious organizations actually goes up.

The difference is that those gifts to religious causes never get big. Wealthy people are more likely to give to religious organizations and churches, but that’s not where they make their large gifts.

I would call this a block of missing gifts, which are the large donations that come from what we refer to as high-capacity donors, or wealth holders, who have capacity to make those gifts. They do give to religious organizations, but they just don’t make their large gifts to churches or religious organizations.

Tim Deatrick: Do you think it is because of the clarity of their message, or because they’re making specific asks? Why is the church missing those gifts when we know that there are people with capacity in every church in America?

Dr. Russell James: The missing part is what I like to call the Missing Ministry of the Church. Now what do I mean by that? It’s the idea that within the Church when we have conversations about generosity, giving, or stewardship, those conversations tend to be exclusively focused on income sharing. There’s nothing wrong with income sharing conversations, but these missing gifts are not about gifts from income. These are gifts made from wealth from wealth holders. That’s a different kind of conversation that we’re not in the habit of having within the Church.

Tim Deatrick: Some people may not understand the difference between income sharing and wealth. Would you explain the difference between the two? Some church leaders may view money as money, but you’re describing two different pockets from where wealth holders do their giving.

Dr. Russell James: Yes, this is something that I do see getting confused a lot when people are having conversations. Income is what comes in. That’s what you earn – your paycheck, right?

But wealth is an accumulation of resources, and that is something not everybody has. This specific group you might call accumulators. They have specific tendencies, and they are holding wealth.

Now, when we have conversations about giving and are talking about income sharing, then we think of these in terms of, “Oh, give up a cup of coffee a day to help an underprivileged child.”

So, we create a trade-off between what a person is going to consume and what they are going to give. Those conversations are fine, but that’s a different ministry with a different message. Wealth sharing is a different spiritual conversation because it’s a conversation among those who are wealth holders centered on “What are you going to do with your buried wealth?”

The idea is to understand that if you are a wealth holder, in many cases you have wealth that exceeds the difference between your normal spending and your normal income for a normal life, right? These wealth holders are often people who honestly don’t spend that much in their regular income and are actually pretty productive. They tend to have high earnings, and so, they actually are in a position where economically they have an abundance. So, the question we need to pose is, “What are you going to do with that abundance?”

To hear the entire interview with Dr. James, you can find the webinar on MortarStone’s website

For more information about how MortarStone can help you connect with the wealth holders to create current major gifts and other gifts from wealth for your church, contact Tim Deatrick (tim.deatrick@mortarstone.com) or get in touch with us today! To stay up to the minute with the latest trends and feature releases regarding generosity and legacy giving, including our 2023 Annual Generosity Report, follow MortarStone on LinkedIn, Facebook, X, and Instagram.

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