10-25 Blog

4 Red Flags for Church Giving

Church giving communicates something about your church that goes deeper than mere numbers.

As pastors, we all know this. But we all might not know exactly what this looks like or all that these numbers can communicate. For example, look at the number of first-time givers who immediately set up a recurring transaction, those who continue to give sporadically, and those who have not given again since their first donation. These groups will reveal whether or not these donors understand the importance of faithful, consistent giving. Likewise, the total number of givers in your church compared to the overall amount given reveals if participation is growing and healthy.

Paying close attention to your giving numbers is essential, not just for financial health, but for the overall church health as well.

Paying close attention to your giving numbers is essential, not just for financial health, but for the overall church health as well.

Giving data reveals a story about your church’s communication and its effectiveness. Whether from the pulpit, offering moment, or church emails, what your church communicates about generosity has a direct impact on generosity. This communication influences the number of people who give, the total amount of gifts being received, and if people understand the value of setting up a recurring gift.

Examining giving data will help your church determine how fruitful your efforts are on discipleship regarding generosity, healthy church-wide giving culture, and effective communication that reaches everyone in the church on a regular basis.

Giving data reveals a story about your church’s communication and its effectiveness

Through the examination process, you will find that you will be more intentional about incorporating aspects into your preaching and teaching. But if you do not examine the giving data, you will notice these factors are not prioritized. And if they are not prioritized, then generosity will not be prioritized among your people.

Here are four red flags for church giving and what they can mean for church health:

1. 10% of givers make up 90% of giving.

You are probably familiar with the 80/20 principle of church giving. This rule states that eighty percent of your church’s giving comes from twenty percent of the people.

While this scenario is not ideal, it is more common than many think. However, if the generosity gap becomes even more significant, pastors should be concerned.

Churches that experience gaps beyond the 80/20 ratio are at great risk. Why? Because a single action, event, or comment could completely shake the church’s financial foundation. Here are a few examples from real churches:

  • An unexpected death could result in your congregation not only losing a beloved member, but also your church losing its highest giver.
  • A disagreement between church leadership and a giver could cause that person to suddenly leave the church, halting their recurring donation immediately.
  • A church member may leave because of a sudden life change like a job transition, which causes them to move out-of-state and take their tithe to a local church in their new city.
  • A heavy storm could hit your town and church building hard, causing devastating floods in surrounding neighborhoods and structural damages requiring repairs to the church building itself. Repairs that could be quite costly and something you’re not prepared for.

The reality is, if one household donates $100,000 and the church’s total annual operating budget is $400,000, if something were to happen to that family, the church would lose a fourth of its funding immediately. Simply stated, when a single donation from a family or individual makes up a fourth of the church’s annual budget, then the church will face more liability.

This leads us to the next red flag.

2. Top givers wield significant influence on decision-making.

Gaps beyond 80/20 also create a scenario where the large giver feels they should have a greater voice than the average member in church’s decision-making.

Sometimes when an individual giver understands their donation makes up a significant total of the church’s annual operating budget, they can equate the amount of their donation with an amount of “influence” over decisions made in the church. Unfortunately, an ownership mentality precedes a stewardship mentality. In this scenario, someone may wield personal authority by threatening to withhold funds or removing them altogether if a certain decision is not made. While it is important that pastors make decisions rooted in Biblical Truths, pastors must place strong boundaries where members are tempted to place pressure for particular decisions to be made based on extra biblical, individual preferences.

Fear of losing funds should never inhibit a pastor from shepherding all congregants, no matter the amount of their donations.

Fear of losing funds should never inhibit a pastor from shepherding all congregants, no matter the amount of their donations. Ultimately, a church should follow a structure of biblical governance when it comes to decision making, and continue to both live as stewards (managers) with a loose grip on resources and teach their congregants to live as stewards, no matter what.

3. Gifts are regularly designated toward ministry areas and away from the general fund.

Designating gifts is a common practice. Many churches have occasional, specific initiatives for members to give towards. Like a backpack drive at the end of summer to help prepare local children for the upcoming school year, raising funds to support a ministry partner who drills wells in Africa, or a benevolence initiative that donates a car to a church member in need.

Occasional generosity initiatives paired with general fund donations help establish healthy giving patterns among your congregation. However, we caution you to avoid allowing your donors to designate funds too excessively. This unhealthy pattern reflects distrust, selfishness, and silos.

Occasional generosity initiatives paired with general fund donations help establish healthy giving patterns among your congregation. However, we caution you to avoid allowing your donors to designate funds too excessively.

Members may designate their gift because they don’t trust leadership to fund their favorite ministry at the level they desire. They are afraid that leaders will “unwisely” fund other, “lesser important” ministry areas with the dollars. It can also unintentionally undermine the importance of your general fund and its needs. People give through the church, but they also give to the church. Lights, air conditioning, and toilet paper are all important building costs. Let’s not deemphasize these things out of concern that they aren’t “attractive” enough to give towards.

Provide people an opportunity to give specifically towards initiatives that they are passionate about. Plus, as a church family, find the specific needs and meet them across your local community. Specific giving opportunities will empower your congregation to participate altogether and help them see that their giving is making a real difference. But, remember to strike a balance between special offerings and general giving. Communicate on a regular basis that both are vitally important and meeting needs.

If designated giving toward individual ministry areas occurs without the church leaders’ encouragement, take note. It is a red flag.

4. Per capita giving is in a rapid decline.

Per capita giving is the total undesignated giving, divided by average worship attendance, divided by 52 weeks.

A sudden drop in per capita giving can occur for several reasons—an increase in new attendees who do not give, a decrease in giving from current attenders, the lack of giving from a historically large giver, or a shift away from undesignated giving.

For churches that experience a significant decrease in per capita, it is essential that church leaders determine the root cause of this red flag and make any necessary adjustments.

 

Stewardship requires that church leaders pay careful attention to their church’s financial situation. These red flags are seen in the numbers and, certainly, can impact financial health. However, the finances may be symptomatic of a more significant issue, one that impact the spiritual health of the church. Pay attention to red flags for church giving.

 

Art Rainer
Art Rainer

Art Rainer is the Vice President for Institutional Advancement at Southeastern Baptist Theological Seminary. He writes and speaks widely about issues related to finance, wealth, and generosity, and is the author of The Money Challenge: 30 Days of Discovering God’s Design for You and Your Money. Art lives in Wake Forest, North Carolina with his wife, Sarah, and their three children.

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