Here is the Challenge
Many, if not most, denominational organizations are facing a long-term trend that is radically changing the way they finance their work. Some denominational organizations have recognized this trend and are responding to it by multiplying their denominational funding streams. Other denominational organizations are in denial about the funding transformation that is occurring, and are failing to intentionally multiply their funding streams.
A decreasing, yet myopic, number of denominational organizations are hanging on to the concept of one foundational funding stream composed of basic assessments to congregations by the denomination, or basic allocations to the denomination from congregations. They are doing this in spite of the facts, and in spite of warnings from their accountants, researchers, strategists, and some leaders within their denomination.
Some denominations are caught in a double bind situation. On the one hand, they speak loudly and passionately about the necessity of congregational contributions through the foundational funding stream. They feel they have to do this because of the aura that has developed about that funding stream. To do anything else is to be seen as disloyal to the heritage and hope of their denomination.
On the other hand, they realize congregational commitment to the foundational funding stream is diminishing. So they bless efforts to secure donations through numerous funding streams to make up for the loss in buying power resulting from the decreasing percentage of congregational offerings being directed towards the foundational funding stream.
The facts are that these basic assessments or allocations are a decreasing percentage of annual congregational tithes and offerings, make up a decreasing percentage of the annual budget of the denomination, cause the agencies and institutions of the denomination to fight over a shrinking funding base, and do not have the loyal support of a growing number of congregational members born after February 9, 1964.
Here is the Response
The response of some denominational organizations is to push their basic funding stream harder and with a greater demand for commitment from congregations in hopes that tomorrow will bring a return of yesterday. One of the characteristics of these denominations is that they celebrate any increases in the actual dollars received from congregations, but do not talk much about the fact that the increases are not keeping up with inflation, and that they represent a decreasing percentage of the budget of affiliated congregations.
Other denominational organizations appear to be accepting the inevitability of shrinking budget income from congregations, and have engaged in multiple rounds of cut backs and downsizing. Among their actions have been eliminating services, deceasing funding to non-essential causes, and adjusting funding formulas for agencies and institutions to keep a larger percentage of the budget for denominational administration and direct programming to congregations.
A few denominational organizations have proactive plans for multiplying their denominational funding streams. They are not necessarily discarding their commitment to a basic funding stream, but they are recognizing that providing multiple streams allows more productive ways for congregations and individuals to express support for the diversity of programs, ministries and activities of the denomination. At least twelve such streams can be identified.
This paper does not seek to suggest that denominations are not aware of and working multiple streams. Rather it is a proactive effort to get denominational organizations to think more intentionally or strategically about these funding streams.
Here is the Opportunity Through Twelve Denominational Funding Streams
The following are twelve denominational funding streams that can be used to diversify the sources and pathways of fund raising in denominational life.
Stream One—Basic Giving Plan: The first funding stream is the basic funding or giving stream. Numerous denominations have a very successful 20th century heritage in regards to their basic funding stream. During much of that century their basic funding stream took on characteristics of a spiritual movement whereby giving to or through the basic funding stream became a way of expressing sacrificial Christian commitment to the global fulfillment of the Great Commission. The basic funding stream in some denominations became a new sacrament for congregational worship.
Unfortunately many basic funding streams peaked in their appeal as a sacrificial channel for financial support of the denomination some time between 1960 and 1980. However, too many denominations were in denial about this fact for a decade or two after the peak. Only the accountants, researchers, and strategists within denominational offices saw the true trend, and often they became victims of a shoot the messenger syndrome.
Stream Two—Special Offerings: A second funding stream is that of special offerings. Often these offerings have developed their own brand identity and congregational members even equate the work of their denomination—particularly its missionary or benevolence work—with one or more special offerings.
Some of these special offerings are so large that they rival or exceed the basic funding stream as the primary funding source for some of the special causes these offerings fund. Denominational organizations would do well to continue to enhance these special offerings as the decision on how much to contribute is generally made by individuals rather than by congregational boards or denominational formulas.
Stream Three—Designated Gifts: Designated gifts are a third funding stream. Increasingly people want to specifically see the impact their gifts have on Christian ministry. Some people want the impact to be that their name is on a building, program, or scholarship. Others simply want to see evidence that their money has an immediate impact on a specific spiritual or human need. Denominational organizations need to highlight, and perhaps multiply, the number of ways people can make designated gifts.
It is also important to distinguish between those designated gifts that flow through the denominational office, those that flow directly to an entity tied to or related to the denominational organization, and those that flow directly to a project or place of ministry with no direct ties to the denominational organization. For example, in regards to GlobaLocal missions work, increasingly individuals and congregations are sending their funds directly to a place of ministry.
Stream Four—Fees for Events and Services: Congregations are more willing than denominations think to pay a fee for services if they feel the service they are receiving adds value to the congregation they have not typically received. This forms a fourth funding stream. Congregations are increasingly willing to pay parachurch groups and consultants for specialized learning experiences and coaching relationships. If and when their denomination offers similar services, they are also willing to pay fees beyond their basic funding contributions to enhance the ability of their congregation to reach it full kingdom potential.
Congregations are probably willing to pay small registration fee for basic training from their denomination. For premium learning experiences, some congregations will pay a large registration fee because their feel the direct benefit or added value from the experience. Congregations are also willing to pay for consultant expertise or coaching competency for ongoing opportunities and challenges they face.
Stream Five—Product Sales: The sale of products is an fifth funding stream that has existed in numerous denominations for years, but often their primary market has been defined as congregations affiliated with a specific denomination. Now many denominations are finding markets outside their own denomination. These can include smaller denominations, denominational and nondenominational congregations, and individual Christians.
The types of products that can be sold are learning vehicles such as books, manuals, audiotapes, videotapes, CD’s and DVD’s. Subscriptions to learning mediums such as an electronic newsletter or distance learning experiences are also marketable. Often denominations produce wearable products such as t-shirts and other clothing that can be sold to various constituents.
Stream Six—Capital Fundraising Campaigns: The typical pattern has been that denominational agencies and institutions engaged in capital funding raising campaigns for operations and facilities, and congregations conducted capital fund raising campaigns for new construction or renovations. However, core denominational organizations have not generally done so. If carefully targeted toward high priority missional issues, reasonable capital campaigns that target individuals, and are conducted no more than every five years, can benefit denominational organizations as a fifth funding stream.
Stream Seven—Development Efforts: A seventh funding stream is one that denominational organizations have awakened to during the past several decades at a level that is equal to the desire of people to contribute. That is a foundation approach that focuses on bequests, trusts, deferred gifts, and investment vehicles.
Parachurch organizations recognized the tremendous benefits of this approach before many denominations. This is also a place where denominational agencies and institutions focused on this funding stream before the core denomination picked up on it and moved from a passive to active approach.
Stream Eight—Investment Efforts: Several decades ago denominations began discovering at a new level the benefit of investment income. While the investment climate may not always make this appear to be a beneficial funding stream, a long-term commitment to an investment of even one percent of the gross income of denominational organizations makes an amazing difference in the funding base of a denomination within a generation of time.
Stream Nine—Grants From Foundations, Businesses, and Other Entities: Foundation grants are a ninth funding stream. An increasing number of private foundations are funding Christian organizations. They are becoming an important source of seed money for human needs, leadership development, and congregational redevelopment projects.
The fastest growing foundation source may be small to medium size family foundations where benefactors desire to give away their wealth during their lifetime so that they can enjoy watching the enhancement of Christian ministry which their resources empower.
Stream Ten—Networks, Strategic Alliances, and Partnerships: A tenth funding stream is the increased use of networks, strategic alliances, and partnerships that may result in discounted or in-kind resources and services from various professional individuals and businesses with products and services that can benefit denominations. Many professionals, particularly Christian laypersons, may have a ministry rate that makes the use of their services cost efficient.
Included in this is the geometric increase in volunteerism that has characterized the past several decades of religious life in North America. Denominations often underestimate the time, products, and services laypersons are willing to provide if appropriately challenged.
Stream Eleven—Sale of Assets: The sale of assets can provide funding for a denominational organization. However, what assets, and how the funds are used, should be carefully thought through. For example, generally it is better to sale appreciating assets. The wisely move can be to sale appreciating assets that are also renewable in that the core asset remaining may continue to increase in value, or the asset sold can be renewed and once again appreciate.
Steam Twelve—Income From Non-Member Individuals, Congregations, Denominational Organizations, or Other Entities Benefiting from Events, Products, Services: While particular funding streams on this list include some reference to this methodology, it is a large enough funding stream that it ought to be considered separately. A vastly untapped funding stream is the one support by events, products, and services that a denominational organization can offer to individuals, congregations, denominational organizations, and other entities outside of its own denominational organization.
When a premium event, product, or service is aggressively marketed to others, it can have a tremendous appeal that will more than pay for the cost of writing, production, marketing, and fulfillment. It may, in fact, provide funds for to research, write, produce, market, and sell additional events, products, or services that both benefit those individuals and congregations affiliated with the denominational organization, and others.
One example of a service many denominational organizations offer is a conference center or camp that is made available to people outside its denominational family. They may even be made available to other not-for-profit organizations, and if the conference center or camp charter allows, to for profit organizations.
