Church funding is broken (a guide for finding a fix)
The individual donor model for funding spiritual communities (a.k.a churches) is broken. Churches are receiving less money overall and less money per member while membership is waning. This is a cycle that is moving in a single direction: closing church communities.
Problem 1: Tithing Impossibility
Many churches have a history of teaching that the Bible encourages all people to give ten percent of their income to the religious community they attend. There are two problems with that. First, the Bible does not mandate 10%. It varies from year to year, but is closer to 22.5%. In addition, the New Testament doesn’t offer anything close to a percentage. Second, for most people giving 10% of their income is an impossibility for much of their lives, and faced with the impossible standard, they generally opt out altogether.
The way the church is talking about tithing has the net result of making people give nothing.
Problem 2: Ignoring Direct Giving
For the majority of people, they no longer want to give to a giant fund. They may give a little here and there, but they want to give to something they are passionate about. They want to give directly to solve a problem or fund a specific effort that made a difference in their lives. Churches fail on two counts in this area. Many constantly pressure members to give to an anonymous general fund instead of to the parts of the organization that is making a difference in their life. In addition, the church only invites members to give to the church ignoring the desire of their members to give to organizations who are addressing issues the church is not. Yes, they will sometimes invite members to give to the general fund by talking about how the church gives money to other organizations through a mission committee, but that committee generally gives away a tiny fraction of the overall church budget. When members discover these percentages, they are often frustrated and disillusioned with the church’s broader appeals.
The anonymous, broad appeals from churches are causing people to give less and stop giving altogether.
Problem 3: Not charging for products and services
People know that it costs money to teach a class on meditation or to send weekly devotions to their email. Though churches are great at coming up with new, helpful products and services, they rarely consider charging a fee that would sustain the effort. The lack of financial buy-in can cause people to flake out and stop attending and the lack of meaningful financial feedback that comes from people discontinuing paying for a service, churches often continue programs long beyond their natural effectiveness lifespan.
Churches need a new financial model
It’s time for innovation in the area of financial models for churches. We need experimentation and testing. Here are a series of questions that can get that innovation started:
What are meaningful programs that we can invite people to donate toward?
What kinds of policies do we need to develop to sustain the overall institution off targeted giving?
What other Biblical teaching on money could encourage generosity that does not present an impossible bar like the Tithe?
What other sources of income have we not explored (interest from direct loans, grants, digital products, etc)
What do we do that is worth paying for? How much would we have to charge to fund it completely from sales?
