Church Strategy

I’ve been thinking about church strategy for a little while, and have some books on my digital book shelf that I plan on reading about the topic.  In some ways I’m in the early stages of thinking about it.  In other ways I think I’m far along, thanks to years of being in business, working with clients, and thinking about how my lessons apply to churches.

So it seems time for me to go deeper and to study more on the subject, which I will do.  But in some ways it seems to me that the foundation for strategy is already found in John’s gospel as Christ is preaching on what we now call Palm Sunday, and is simply this:  And I, when I am lifted up from the earth, will draw all people to myself.  The apostle tells us that Christ was teaching about how he would be lifted up on the cross, but Spurgeon tells us that there is an “attractive power of the cross of Christ.”

I truly believe that this is the first step to understanding church strategy.  How belief in the gospel is manifested (in service, in teaching, in fellowship) will be different, just as liturgical expressions vary.  But it starts with lifting up Jesus Christ.

I end with two things: the link to Spurgeon’s sermon (http://www.romans45.org/spurgeon/sermons/0139.htm), and the other a video of simple yet profound hymn, and one of my favorites: Lift High the Cross.   As God’s stewards of the money, properties, and talents in our purview, let’s always remember to raise Christ in our thoughts and actions.

 

https://www.youtube.com/watch?v=auHvvjbnFEk

Lift high the cross, the love of Christ proclaim
till all the world adore his sacred name.

1. Come, Christians, follow where the Master trod,
our King victorious, Christ the Son of God.

Lift high the cross, the love of Christ proclaim
till all the world adore his sacred name.

2. Led on their way by this triumphant sign,
the hosts of God in conquering ranks combine.

Lift high the cross, the love of Christ proclaim
till all the world adore his sacred name.

3. Each newborn servant of the Crucified
bears on the brow the seal of him who died.

Lift high the cross, the love of Christ proclaim
till all the world adore his sacred name.

4. O Lord, once lifted on the glorious tree,
your death has brought us life eternally.

Lift high the cross, the love of Christ proclaim
till all the world adore his sacred name.

5. So shall our song of triumph ever be:
praise to the Crucified for victory!

Lift high the cross, the love of Christ proclaim
till all the world adore his sacred name.

Which would you prefer?

I’m obviously on an income kick as of late, and I have one more thing that I’m thinking about regarding income to get out of my system… at least for the moment.  And that is the question about which income preferences: all else being equal, is it better to have one major donor or multiple donors giving smaller gifts?  Actually, why not throw a real number here to make it real: is it better to have one donor give $100,000 or 20 donors giving $5,000 each?

I’d have to go with multiple donors giving smaller gifts, and here’s why: you’re sunk if the major donor pulls out, while losing one $5,000 donor would hurt but wouldn’t be catastrophic.  The major donor scenario creates what we refer to in finances as “concentration risk.”  All the revenue is concentrated in one source.

The reality is that organizations typically have a diverse group of donors, the investors, sustainers, and tippers that I discussed two posts ago.  However, as you look at your fundraising strategy and budget your income, be thinking about how this might be relevant to your ministry.  Is your ministry reliant on one major donor?  What would happen if they stopped giving?  Does the ministry have enough sustaining givers?  If not, why not?  If you do have a good pool of sustaining givers, could one or more be convinced to up their support so that the ministry can fund new and important outreach initiatives?

So be thinking about your income in terms of how giving is concentrated among givers and think about how to diversify and encourage prudent giving.

And this wraps up what I’ve been thinking about in terms of income recently.  There’s more to come in the future, I’m sure, but these have been on my mind for the last few weeks and I needed to put them out there.  Thanks for reading, and drop me a line if you have thoughts or questions.  I don’t have comments on the blog, at least not yet, but you can reach me via the contact form.

An intuitive look at income

I’ve been thinking about income a lot recently, in part because I’ve been talking about it with clients and partly because I’ve been thinking about it as a business owner.  Now, last time we talked about the types of donors you’ll likely experience in ministry, but that article focused on the types of “customers” you have.  This time I want to look at income, using an intuitive approach.

See, income really breaks down into two components: how many people give, and how much they give.  Let’s go to a humble lemonade stand for a moment.  If my niece and nephews put a table up at the nearby train station and sell 40 glasses of lemonade for $1 each, they’ll have $40 revenue.  The quantity of 40 is the how many, the $1 is the how much, and 40 cups times $1 equals $40.  Yes, it’s basic, yes it’s intuitive, but it’s an approach we can build on.

Now let’s look at something close to home: a fundraiser.  Let’s say that the youth group is having a fundraising dinner in the parish hall.  We can seat 100 (how many) and we’re planning on selling tickets for $50 (how much).  We can budget revenue at 100 seats times $50 or $5,000.  But what if we averaged 90 tickets for the last three years?  Then let’s adjust the seats down : 90 x $50 = $4,500.

But what about contributions where any amount could be given?  This gets closer to what I was talking about last time, and that’s reviewing contributors and breaking them down into demographics.  In fact, I even did that in my example, which I’ll repeat here:

1 investory @ $100,000 / year
5 investors @ $25,000 / year = $125,000
100 sustainers averaging $7,500 / year = $750,000
100 tippers averaging $100 / year = 10,000
Total = $985,000

The final point I want to make about income is this: when revenue is faltering, it either means that there is a breakdown on the how many side and / or on the how much side, that not as many people are giving or that they are giving less.  When this happens, we want to ask why it is happening.  Is attendance the same, but fewer people are giving?  If so, why are gifts being withheld?  Is attendance down?  If so, why?  Are the same number of people giving but the amounts down?  Why?  Is the economy taking a hit, or are they finding different financial priorities?

So this is a basic look at income: how many and how much.  And by the way, behind the closed doors of accounting we refer to how many as “volume” and how much as “rate.”  If you ever listen to a dyed-in-the-wool accountant talking about these concepts you’ll hear them discuss revenue as volume time rate.  I really don’t care.  What I do care about is that we understand how the math works and can make good decisions based on our understanding about what is happening with the number of givers and their gifts.

What kinds of contributors do you have?

I’ve been thinking more about what I wrote in my last entry–why do people give to your ministry?  I view it as an important question to ask in order to understand how to approach them when it comes to raising funds.  But I want to look at the income picture in a different way this time around.  But I want to preface what I’m going to say by first explaining what we want to do and then provide a caveat.

What we ultimately want to do from a financial perspective is to group donors into pools that allow us to budget how much giving is coming in.  I know this sounds impersonal, but I believe God gave us minds for applying wisdom, and being able to estimate how much income we’ll have based on givers and typical giving is part of the game.  So this is why we want to do this exercise.

But I also urge caution when discussing people and money.  It’s so easy to make assumptions about how much people have, what their circumstances are, and what they should or should not be giving.  Money and identity are loaded topics, and I don’t want myself or anyone else caught in a trap of setting expectations for what a person should or should not be giving.  It’s ultimately up to God to judge where each person’s heart is regarding their material gifts.

It is with this background that I’m going to suggest that there are three types of givers.

First, we have the investors.  These are people who give because they see special opportunity in the ministry and want to advance it.   These might be people inside or outside the church.  Whatever it is, they give a significant amount of money, and possibly even discuss how it should be used.

Second, we have the sustainers.  These are people who give regularly in large enough amounts to carry the ministry.  In some ways these are the financial backbone of the ministry, because the ministry can depend on their gifts to support it as long as the individual or family is associated with the ministry.

Finally, we have the tippers.  These are people who give token amounts of money to the ministry.  Now, I’m going to suggest that not everyone who gives a small amount of money to the ministry is a tipper.  The lesson of the widow’s mite tells us that there will be people giving as much as they can, but it will be small.  They will be small sustainers.  And conversely there may be very wealthy people giving a small fraction of their income that are tipping.  But for purposes of budgeting we’ll have to lump small givers together, regardless of their generousity.

With these categories, we can do some basic income budgeting:
1 investory @ $100,000 / year
5 investors @ $25,000 / year = $125,000
100 sustainers averaging $7,500 / year = $750,000
100 tippers averaging $100 / year = 10,000
Total = $985,000

I should mention, in wrapping up, that there are other options for budgeting too: getting more granular by looking at individual donors or looking at trends come to mind.  From a back-of-the-envelope viewpoint though, this is a great way to get started.

An important question

I feel a tension inside of me sometimes as I talk or think about ministry, because one part of me looks at what is going on from a spiritual standpoint while another part of me is looking at it from a business standpoint.  What I’ve been thinking about, and what I’m about to ask, has brought that tension up again.

You see, I have a question that I’m going to ask, but it originates from a question that I have for my business clients.  But it’s one that needs to be asked.  And that is…

Why do people give to your ministry?

The question I pose to business owners is a bit different, and typically goes along the lines of “Why do people buy your product or service?”  Or if I wanted to be a brutal New Yorker, I could pose it as “Why should I give you my money?”  Spoken nicely of course, but still to the point.

Here’s the thing, and where my internal tension comes into play: from a financial standpoint, your donors could be looked at as customers.   After all, they’re the ones handing over the money.  I realize that they’re ultimately not who we serve in business; that’s for another post / another day.  But they are the ones handing over the money.

My question goes to their motive.  What’s behind their giving?  Did they grow up in a legalistic household where that is how things should be?  Do they give because they see others give?  Does the offering plate pass by and they throw in a couple of dollars so that they don’t look cheap?  Do they give because they have a personal connection with someone on staff?  Do they give in order to fund a specific ministry project or cause?  Do they give because they’ve bought into the vision of the ministry?

Understanding why someone gives–and not just gives, but gives to your specific ministry–is going to help you tremendously when it comes to asking for money.  You’ll know better who to approach and who not to approach, and what message will resonate.  I believe it also helps ministries to know where their donor’s interests are too, because these are ministry areas that God has put on their hearts that you should be aware of too.

So start to put feelers out and ask various people why they give.  Some things might be as you expected, but there may be some surprises there too.  And then start using this information for planning, budgeting, and fundraising.