Giving and Growth Among the Top 200 United Methodist Churches

by | January 23, 2018

Over the last 10 years, I have been tracking data from the largest United Methodist congregations in America. Through this work, I have uncovered some interesting relationships between giving and growth among the top 200 churches in average worship attendance. You can use these figures as benchmarks to get a quick snapshot of your own church's financial situation.

(This data also fuels my annual list of the Top 25 Fastest Growing United Methodist Churches. I’ll link the 2018 edition when it releases here. You can also read previous editions here: 2017 Edition, 2016 Edition, 2015 Edition and 2011 Edition.)

Let’s look at some numbers:

 

Annual Operating Budget Income

Annual Operating Income, Top 200 ChurchesHere is the range of annual income among the largest 200 United Methodist churches, as measured by average worship attendance:

  • $18,210,000 - Highest
  • $3,591,487 - Average
  • $2,756,199 - Median
  • $875,000 - Lowest

 

The average income of the top 25 fastest growing is $3,377,130 which is 5% less than the average budget of the entire Top 200 list.

These numbers provide interesting insights regarding the budgets of the Top 200 United Methodist Churches. But what about relationship between total annual giving and average worship attendance? How might you you discover a relationship between giving and growth at your church?

 

Annual Giving per Average Worship Attendee

Giving per Attendee, Top 200 UM ChurchesAgain, among the top 200 United Methodist congregations in average worship attendance in the United States, here is the range of giving, as measured per average worship attendee.

  • $10,773 - Highest
  • $2,300 - Average
  • $2,230 - Median
  • $585 - Lowest

 

The average giving per worship attendee of the top 25 fastest growing is $1,570, which is 32% less than the average giving per attendee of the entire Top 200 list.

While the Top 25 fastest growing churches average 5% less annual income than the Top 200 as a whole, when divided by worship attendance, you see a big (32%) drop per attendee. This could suggest some economies of scale in the larger congregations or, perhaps, rapid growth occurring as a result of people new in faith who do not yet understand the principles of Christian Stewardship.

Additionally, you can project the giving health of your congregation, as compared to this range, by dividing your budget by your current average worship attendance. Are you above the median of $2,230? Below?

 

Per Capita Giving (aka, Weekly Giving per Worship Attendee)

Per Capita Giving, Top 200 UM ChurchesBreaking down the previous per attendee statistics on a weekly basis, we can determine an average weekly per person gift of those attending worship in a typical large United Methodist church in America.

Here are the average weekly gifts per attendee in the largest 200 United Methodist churches (in terms of average worship attendance):

  • $206 - Highest
  • $44 - Average
  • $43 - Median
  • $11 - Lowest

 

This number breaks down the weekly tithe and offering gift into a specific number. As with the annual gift, the average weekly giving per worship attendee of the top 25 fastest growing is $30, or 32% less.

The top 10% of per capita giving congregations receive at least $73 per person, per week, and the bottom 10% of per capita giving congregations receive less than $25 per person, per week.

 

Debt

Last, debt can be a useful tool for innovation, but how much is considered too much? Here’s where the Top 200 United Methodist churches stand in terms of total debt:

  • $21,102,000 - Highest
  • $2,755,031 - Average
  • $1,762,207 - Median
  • $0 - Lowest (60 of the Top 200 churches have no debt)

 

The average debt among top 25 fastest growing churches is $3,625,744, which is 24% higher than the average, again indicating a possible economy of scale, or perhaps the artifacts of innovations which have incurred short-term debt.

 

Debt to Giving Ratio

How much debt a church can incur without jeopardizing ministry may be measured in proportion to the size of a church’s annual giving—an indication of how quickly the debt can be repaid. A good rule of thumb is that anything under a ratio of 2.0 (debt twice the annual operating budget) should be manageable.

And here’s where the top 200 churches stand in debt-to-income ratio:

  • The average debt-to-income ratio is 0.9.
  • 27 of the top 200 churches have a debt to income ratio above 2.0.
  • The highest is 4.7.

 

Measure Your Church's Giving to Growth Ability

Fill out the following exercise to get a snapshot of your church’s financial situation, as compared to the above benchmark figures:

 

2017 End of Year Worship Attendance: _________

2017 End of Year Annual Operating Income: _________

Dollars per attendee (Income / Attendance): _________

Per Capita Giving (Dollars per attendee / 52): _________

Are you higher or lower than the $2,300 yearly average or $44 weekly average?

 

2017 End of Year Debt: _________

Debt to Income Ratio (Debt / Income): _________

Are you higher or lower than the 0.9 average?

 

If your church could benefit from some coaching to improve this snapshot, contact us. We’d love to help you!

 

2 Comments

  1. I assume attendance includes all, children, babys, etc.
    Do you have any data adjusted by region so that cost of living variations could be factored?

    Reply
    • Len Wilson

      Hi Reid,

      Here is the disclaimer from my blog about all UM church data:

      “This list is ordered on a 5-year trend according to self-reporting attendance numbers as recorded by the General Council of Finance and Administration office of the United Methodist Church.”

      Self-reporting means attendance is whatever the church declares it is. The check and balances here are a) that a church has to pay apportionment dollars on whatever they claim, so most churches stick with people in worship venues on Sunday (not babies in the nursery, etc.), as inflated numbers have negative financial consequences, and b) Pastors also must answer to their district superintendents about the numbers they report.

      That said, there is nothing preventing a church from adding bodies outside in-venue attendance.

      Reply

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Mick Tune was a pastor for eighteen years and has worked as a consultant with churches across the country for more than twenty years. He is a partner with Doug Turner at Culture of Ready (a ministry partner with Horizons Stewardship) and the author of Wildering: Anyone’s Guide to Enjoying the American Wilderness.

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Whether in a capital campaign, annual giving, or planned giving program, generous giving happens when people believe your organization is changing people’s lives. Sadly, most churches try to grow giving by presenting data, finance reports, and line item budgets. This approach doesn’t work! Rather than share facts and figures, tell stories of how you are making an impact.

 

How does storytelling help grow giving?

 

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How can you begin inspiring generosity with powerful storytelling? Here are some ideas:

 

  1. Identify stories at staff meetings, leadership meetings, and program meetings. Be prepared for silence and blank stares. However, if you persist, sharing stories will eventually become the best part of your meetings.
  2. Regularly ask people to tell stories in worship—send out video links, always with permission.
  3. Solicit stories after significant events like V.B.S, mission trips, Bible Studies, youth retreats, etc.
  4. Any communication, newsletter or email blast should include at least one story.
  5. Personal giving statements, and other communication about finances, should include stories of how the generosity of the church members is transforming lives. Connect money with the church’s ability to do ministry. Tell people how their generosity is impacting people every day.
  6. When you present the budget, resist reporting data only. Through powerful storytelling, you will transform your budget into a compelling tale of God’s work.

 

When you begin asking people to tell their stories, some people will argue they don’t have a story. However, each of us has a story to tell. You can help people get in touch with their stories.

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Do you want to inspire generosity and increase giving?

Instead of reporting facts and figures — tell stories. When the focus is on powerful storytelling, meetings become more enjoyable and newsletters, email blasts and financial statements come alive. In addition, you and your people will know that all the time, energy and yes, all the money, is in fact making a difference. And that makes it all worthwhile.

For more insights on powerful storytelling go here and here.

 

Scott McKenzie is a Partner and Senior Vice President with Horizons. Scott is a pastor, fund raising consultant, generosity coach and story teller.

How to Increase Your Church’s Giving in Spite of the New Tax Law

The headlines suggest impending doom for churches:

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“Charities Brace for Giving Plunge in Wake of New Tax Law”
“Charities to Lose Billions in Donations Due to New Tax Law”

This is not the first time that changes in tax laws have resulted in such dire predictions. In 1981, the New York Times published this headline: “New Tax Law is Said to Endanger Billions of Gifts to Private Groups.” Fortunately for the nonprofit sector, that predication was wrong: gifts to charity over the next three years actually increased!

What impact will the new tax law have on charitable giving?

The long-term impact on philanthropy of the Tax Cuts and Jobs Act of 2017 (TCJA) remains unclear.  However, a strategic giving summit, led by Robert Sharpe of the Sharpe Group, highlighted new opportunities for donors made possible by the new law. Also, Sharpe suggested several strategies to grow giving to compensate for changes in the law. Here is an overview of Sharpe’s perspective on the law and the most effective ways to give going forward.

First, the reality. The new law was the most comprehensive revision in the tax code in over 30 years. The changes included a doubling of the standard deduction and a reduction in the mortgage interest and state/local tax deductions. Also, the cap on cash gifts was raised from 50% of Adjusted Gross Income (AGI) to 60%. Limits on deductions for high income donors were suspended until 2026 and home equity interest deductions were eliminated. As a result, it is expected that half of the people who itemized their deductions in 2017 will not itemize in 2018. However, high income donors who will continue to itemize may find expanded opportunities and incentives for larger charitable gifts.

So, how can churches guide donors? What can be done to salvage the tax benefits for those who no longer itemize and promote new opportunities for those who do?

Sharpe suggested three strategies: bunching, boosting and bypassing.

Bunching refers to donors making charitable contributions every other year. The every-other-year strategy enables donors to bunch two years of giving into one allowing them to itemize in the year their gifts were given. As an alternative, donors can contribute to a donor-advised fund (DAF) every other year and give ½ to the church each year. This strategy helps the church’s cash flow but can skew income if the church is not aware of the donor’s intentions. Some of your donors may have done this last December. You should review your 2017/2018 giving, especially among your larger donors, to see if they may be using a bunching strategy already.

Boosting is most applicable to capital campaigns. Some high capacity donors may choose to make asset gifts that boost them to itemizer status for a number of years. Donors choosing this option lock in current market values, bypass capital gains taxes, and save a substantial amount on state and federal taxes. Boosting makes sense for donors who have highly appreciated assets that pay minimal dividends and who want to make a larger gift to a capital campaign.

Bypassing is the third way to take advantage of the changes in the tax law. Donors can enjoy a “deduction equivalent” by making gifts that bypass their income stream. The most common form of bypassing is the IRA rollover provision in the tax code. People age 70 ½ and older who have IRAs are required to take a yearly minimum distribution (RMD) that is taxable as ordinary income. These people are now able to make a yearly gift of up to $100,000 directly from their IRAs to churches and charities. This gift counts as their RMD, avoids the taxes, and reduces their AGI on which many other deductions are based. Although the IRA rollover provision predates the new tax law, its importance has been amplified by recent changes and by the increasing number of Boomers becoming eligible.

Finally, Estate and Gift Tax laws remain essentially unchanged. However, by doubling the exemption amount ($11.18 million per individual and $22.36 million for married couples in 2018) and indexing it for inflation, the TCJA eliminated federal estate taxes for 99.9% of Americans. For some perspective on the scope of this change, the exemption was $600,000 as recently as 2000. As a result, it is likely more discretionary assets will remain in the typical estate. Surveys show that donors with such increased assets probably will split the tax savings between family and charity.

So how should churches respond to these changes? Here are some suggestions:

  1. Educate yourself, your staff, and donors about the changes that impact charitable gifts. The TCJA left the charitable deduction intact while repealing and limiting many others. In fact, some benefits were actually expanded! Many denominational and community foundations have staff whose primary job is providing advice and resources for their constituents. Take advantage of these low-cost (or free) resources. The Sharpe Group has excellent white papers and educational materials, too. “Talk to your financial advisors” should be your mantra in 2018 and 2019!

 

  1. Promote the benefits of gifts of appreciated securities and other non-cash assets, such as IRA rollovers. Because about 8,000 Baby Boomers turn 70 ½ every day, appreciated asset gifts will be increasingly important in funding your ministry. Remember the IRA rollover provision allows eligible donors to enjoy the tax benefits of their gifts regardless of whether they itemize. However, your church will not receive asset gifts unless you make a conscious effort to educate members about these opportunities. Remember to tell donors how these gifts make a substantial difference to your mission and ministry. Colleges and nonprofits are making the case for why they should receive these gifts. Be sure you are doing the same.

 

  1. Inform your donors that the federal estate and gift tax has, for all practicable purposes, been eliminated. Many donors created estate plans based on the old tax laws. Those plans usually included insurance or assets in trusts to pay the necessary taxes. Any bequests to family and charities were made from the remaining assets. The higher estate tax exemption means donors can leave more to charity and increase the amount distributed to family members! Position your church to be the recipient of these “extra savings.” Once again, take advantage of the resources available through denominational and community foundations.

The new tax law does not mean your giving will be negatively impacted. But growing giving requires being informed about the best ways to give.

Too many church leaders are operating under the assumption that the TCJA will have a negative impact on giving. Robert Sharpe reminded us that the “sky has never fallen” except during major economic downturns. It is clear the opportunities made possible by the new law outweigh the threats created by it. Churches need to tell that good news in order to enhance their ability to proclaim THE Good News!

Tom Norwood, D.Min, CFRE is a Senior Vice President with Horizons. He is an ordained Presbyterian minister who holds degrees from Davidson College, Columbia Theological Seminary, and Yale University. Tom is a regular speaker at regional and national fundraising and stewardship conferences.

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