Four Factors of Fundraising Disruption

Generosity Practices have shifted drastically in the last ten years. With deep cultural institutional distrust and disruption of the digital age with the advent of mobile technology, the tried and true methods of an analog fundraising approach are waning. Gone are the days of a loyal constituency that feels obliged to support an organization within proximity or even ones in which they participate. As the Church is also feeling the impact of digital disruption, four major factors are reshaping the funding terrain.

1. Institutional Distrust

Institutional Distrust is at an all-time high. Interestingly enough, 2020 (and January of 2021) has served to confirm this assertion, and it’s only going to get worse. Add to this, the American Church damaging public trust with the news of sexual misconduct of world-renowned leaders such as Ravi Zacharias and Carl Lentz, high profile “de-conversions,” and televangelists soliciting viewers for the money to buy a $65 million jet, and our institutional trust might only be a little higher than Congress. When distrust is high, income is low.

2. Aging Membership

As of 2016 Pew Research reported the median age of Evangelical and Mainline Church members in America is 54. If the rates and percentages haven’t changed in four years the median age will have risen to 56, and that isn’t even accounting for the drop-off in participation that occurred this past year during the pandemic closures. The closures will have a rapidly widening effect on the Church’s age disparity. As the overwhelming majority of our churches see their most reliable donors retire in the next five to ten years, our sustainability relies on our ability to create funding sources that fit with a new generation of giving.

3. Pre-Churched Culture

As a Junior in high school in 2003, attending the third-largest school in the country at that time, I was struck by how many students did not ascribe to Christianity in practice. It was a crazy experience considering I lived in one of the most churched cities in America at the time. Over the last 18 years, the numbers have confirmed my observation. The majority of my generation wasn’t involved in church anymore when I was in high school, but what’s even more relevant to us now, is that my generation has middle schoolers and high schoolers of their own now—most of who have never stepped foot into a church. They only know about Christianity based on what they see on social media or in Hollywood, and we all know how positive those representations are. My generation was a post-church Generation…we have now moved into a new era: a Pre-Church era. It’s not a past life for them. It’s not something they moved away from. It’s something they have only heard about and observed “those people” from a distance.

4. Mobile Accessibility

Before the 2020 Shutdown, almost 80% of visitors to churches in America checked out the Church online for weeks before attending in-person events. After Covid, That number will take on more significance. Church’s mobile abilities allowed people to turn three hours on Sundays, into an hour event any time during the week that fit their schedule. Because of COVID-19, people have begun to see buildings as a barrier to engaging in their churches. You might argue that Sunday isn’t a three-hour event, but for a family with two children under the age of eight, the event begins before you walk out the door on Sunday.

You have to get up and get prepared. You have to make sure everyone is on schedule and presentable. By the time you get to the church (assuming it’s within a thirty-minute drive) you have already been at it for almost an hour (or longer). The family has to get into the church and get the kids settled before the beginning of the service, and then the Service itself is at least an hour-long…in most churches 90 minutes. Then after service you have to get your kids, people want to have conversations and hang out, and then you have to pack those kids up and drive home. All this assumes the fact that you are attending only, not serving in any capacity.

With mobile technology, we can get anything we need at any time we need any place we need it. Those that understand this new dynamic and design their outreach accordingly will reach more people in more places.

The current reality is that what got us to sustainability through fundraising in the past won’t get us to sustainability in the future. Although physical churches may find that these factors are tarrying in their context, the truth is any new expression of the church will have to design their funding approach around these realities from the outset and have a plan to achieve sustainability in a new world that can’t rely on church members with cultural theological knowledge of tithing nor an intrinsic obligation to support the church’s mission without training and time.

A New Approach to Generosity Infrastructure

So what does a generosity model look like for a new generation of givers with an understanding of these four cultural shifts? Well, for starters I am sure there will be unique innovative approaches to giving in the future that we are unaware of, but here are four strategies that can help any church re-thinking giving in a digital age. By utilizing these approaches churches can attract donors far quicker than in typical church funding models. We must refuse to let a theological hangup on tithing or guilt because their wallet is light and their faith is weak prevent people from experiencing God’s blessings that generosity opens up in their lives.

Micro-Donations

We had a college student in our group that expressed her guilt because she couldn’t tithe. She only brought home a net income of $100 monthly and it had to last her. When I asked her what she felt like she could give without hyperventilating she sheepishly stated, “Two dollars.”

I smiled at her and asked her if she thought Jesus would be happy and proud of her for giving the two dollars. She couldn’t come up with a good answer because she had guilt. This is one of our few girls that has spent her entire life in the church, and she couldn’t come up with a straight answer about if Jesus would be proud of her for giving what she had! That guilt didn’t compel her to give, although that would have been the wrong motivation to give in the first place, it caused her to clench her fists to hold on to her money tighter. She thought, “if I can’t give the ten dollars to appease God, then I guess I shouldn’t give the two because He’s still gonna be disappointed in me.” I don’t know about you, but I think that is frustratingly harmful to the spiritual vitality and maturity of a young Jesus Follower who has been sitting in our churches her entire life. If she feels that way after intimate knowledge of the church, then what do others feel?

Micro-Donations help people like her give with a cheerful heart and little guilt, and actually is a practical and widely accepted business practice among most digital organizations. There are two major tactical ways of implementing Micro-donations: Micro-funding and Roundups.

Micro-funding was made popular by funding platforms named Patreon, Round Up, and Ko-fi. It was created for Creators on social media to monetize their brand by people giving them money to support their content. Think of a miniature version of viewer-supported TV like PBS. It allows people to press a button and instantly give $1, $2, $5, $10, $100, or more instantly. People like our college students can see our encouragement to micro-fund our content as an easy on-ramp into our Generosity ecosystem without the guilt of not measuring up to a theological standard. She gets in the game, and we believe God will bless her generosity.

Roundups are done by multiple organizations, and if you have been to Taco Bell you probably have been asked to round up your purchase. We also have the ability to ask our people to round up every purchase they make in a month. It’s simple. You sign up to round up your purchases in a secure portal, and you give permission for the portal to round up your purchases for the month to give to the organization. Then every purchase you make will be rounded to the next dollar. It’s an easy way for people to give to us.

It’s really easy to set up. In fact, we already set up RoundUp and a Ko-fi for our church and we already have three people who have signed up to donate.

Crowdfunding

Kickstarter popularized a method of donating and investing that allowed many people to pitch to fund a project, thereby democratizing the investment process and disrupting the investment industry in the process. With Kickstarter, you could begin a campaign to raise a specific amount of funds in a specified amount of time. The agreement is that if you don’t raise the funds in the allotted amount of time then the money goes back to the donors and the project must try again with a better plan. Other crowdfunding apps have been created that allow people to keep everything raised whether they hit their goal or not. The most popular of these sites is GoFundMe.

Here is a cool idea that I helped one friend's church implement. We decided to utilize this tactical approach to begin raising money for projects while simultaneously A/B testing our congregation’s buy-in for the project, allowing us to create solid emotional and financial support for a project before we commit to creating the product or service for the church.

Any time they have a set of projects or ministries they want to create they now create a crowdfunding campaign that will show the plans for three ministries or projects and set a dollar amount for each one. They invite their people to vote for the project by donating to the project. The first one to win by attaining the set amount of money is the project they begin, and the process will start again. The money that is raised from the two “losing” endeavors will be set to zero and the collected money goes to the general fund as per the donation agreement before a person donates to the cause.

This type of fundraising added a fun, competitive element to the giving process and allowed them to move with more educated buy-in from their community before they began things. Young Professionals familiar with Kickstarter enjoy this type of giving because it makes it more of a game, and because they get to have a say in what comes next.

Subscriptions

Subscriptions have been around for hundreds of years. This tried and true method of selling and fundraising is a staple in the digital economy as well. As many have moved to automated giving patterns, this has become the most utilized form of funding on the web. While churches work to create a culture of generosity, many should consider implementing the subscription method as their primary giving vehicle for members. Churches can implement Subscriptions as a step along the discipleship journey toward a tithe. The Tithe is the summit, but it doesn't have to be basecamp as well.

Generosity Community

I urge churches to go all-in with the subscription model by creating a community around their donors. This concept was stolen from Charity:Water. There are levels of ability to give and so there should be tailored asks to each of these self-selected groups of people. I see four distinct levels of Generosity Involvement for churches:

The Companions

The first is considered entry-level giving. These are for people that love what we do but haven’t taken the step into the subscription part of our community yet. These would be mostly Microdonors or inconsistent givers, but we want them to know we are excited to have them as part of our Giving Community. It also gives an awareness of the people that we can cultivate into the type of givers who make the step into our next group of Community Members.

The Community

The Community is where a church would build its subscription group. I believe a smart goal for a subscription is to get people at a starting point of $100 per month, but the reality is that any subscription is a success. For most churches, this group's giving determines how it sets the budgets and what it can provide for the faith community as a whole on an annual basis.

The Champions

Champions are a group of people who have extra margin and capacity to be generous with their income, believe in the mission of the Church, and want to invest in the expansion of the ministry. Champion giving is an above and beyond the type of giving. It is built for those that have a spiritual gift of generosity. Churches should tap into the giving superpowers of those who have the gift, but to do that, churches need to be good stewards by showing the vision and the stories of how previous acts of generosity created a win for the Kingdom.

The Commons

I get excited about this idea. The Commons, taken from Acts 2, is a crowdfunding platform that can be done by multiple generosity platforms that allow Church leaders to post a need from one of the church's people who need help from the Community. The leader could post the need to the church's digital community and the community would take care of the need. This gives the tangible ability for people to be the hands and feet of Jesus. It also takes care of the Church needing a Benevolence fund.

A New Approach to Revenue Infrastructure

Typically Churches overwhelmingly rely on the generosity of their members. While it is the most consistent form of income for churches, there are other sources of supplementary income that Churches for the most part have not tapped into. These sources have the ability to create massive revenue streams for churches thereby diversifying their approach to funding and reducing the need for the generosity of those consuming our services. Here are three untapped areas of Revenue for churches that desire to pursue sustainability.

Content Revenue

Known as Advertisement and Affiliate marketing, these forms of revenue are specially tailored for a digital church like ours who already will be creating a fair amount of weekly content and already distributing them on the major social channels. As we grow our audience we will be given opportunities through youtube, TikTok, Instagram, LinkedIn, Facebook, and our podcasting platform, Anchor, to sell space for ads and become affiliate partners with places like Amazon. With people already used to seeing ads on these platforms, now, we would be able to control the type of ad that plays on our videos, allowing us to never have an ad play that we feel would not fit our community, and we would earn a commission for those products that we advertise giving us more revenue to create better services, products, and experiences for our community.

Grant Revenue

One of the Strategies churches can deploy is tailoring our departments into Community Development Organizations to position them for Grants. This could allow churches to build out these programs quickly and serve more people without the burden of using the limited resources of member funds. It could vastly improve a youth ministry's ability to serve and even provide a livable wage for the department head. Through great grant writing and health management, ministries can serve more people that will allow churches to grow quicker than traditional methods.

Resourcing Revenue

Because churches are primarily educational organizations from a production perspective, we have the opportunity to package our intellectual property and help other churches with our experience and creativity. With this source of income, we can add this to the balance sheet to keep expanding the ministry for years to come.

As a digital church, here is my working assumption: the giving-per-person ratio will be lower than in a physical location, but what it lacks in giving-per-person, it makes up for in scale. It’s easier to attract massive numbers online than it is live. Combining that with the power of micro-donations and gamifying giving through the crowdfunding approach we can, with. Hard work, become as sustainable as a church anchored in a thriving neighborhood. It just takes an understanding that giving behaviors and motivations have shifted, and creating a system that reflects the reality of this current generation’s preference for generously partnering organizations.