Charitable Giving Inches Upward, Says ECFA Survey

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2 Charitable Giving Inches Upward, Says ECFA Survey by Warren Bird, Ph.D. Key Findings: ECFA (Evangelical Council for Financial Accountability) conducted a survey to ask how churches and ministries ended 2017 and began 2018 in terms of charitable giving, releasing the results on July 16, Here s what they said: 1. Better position to start The year 2017 ended better than did 2016 for many ECFA-related ministries. Over three quarters (78%) indicated that December 2017 s giving was the same or better as December 2016 s. In fact, more than a third (35%) of ECFA-related ministries said that December 2017 s giving was 7% or higher than the previous December s. (Details on pages 2-3) 2. Not much financial margin. The increased giving somewhat hides the close financial margins experienced by most ECFA-related ministries, where money remains tight. When asked how they d respond if 2018 represented an overall 3% decrease in giving from 2017, well over half (61%) said we would need to make budget changes to offset the decrease. The remainder (39%) said we have adequate reserves to cover the decrease. (Details on pages 4 & 5) 3. Ministries are very donation-dependent. For ECFA-related ministries, December is a crucial month, with a disproportionately high amount of donations, which are crucial to each ministry s budget. A solid majority (78%) receive more than three quarters of their income from donations as compared to fees, product sales, endowment income, or another source. Churches receive an even higher percent of their income from donations than do other nonprofit ministries. (Details on pages 6) How broadly can the findings of this report be generalized? ECFA s membership serves as a strong proxy group to represent all U.S. Christ-centered ministries. We ve heard many times over the years that when our constituency identifies trends and benchmarks, other ministry leaders find the same to be true for their own contexts. Dan Busby, ECFA President Charitable Giving survey analysis. 1

3 Please compare giving in December 2017 to December The year 2017 ended well for many related charities. 78% (Over three quarters) indicated that December 2017 s giving was the same or better than December 2016 s. Such affirmations were strongest from charities in the Midwest where 85% said that December 2017 s giving was the same or better than December 2016 s. Compared to Dec. 2016, Dec giving was... Higher 49% 56% 53% 48% 48% About the same 29% 23% 32% 31% 25% Lower 22% 21% 15% 21% 27% CHURCHES ONLY Among the various types of charities, large churches those with attendances of 1,000 or higher saw the strongest upturns in the December-to-December comparisons, with 86% reporting that 2017 was the same or better Higher 52% 44% 72% About the same 29% 35% 14% Lower 19% 1% 14% NONPROFIT MINISTRIES ONLY 72% reporting it was higher ALL SIZES Under $1M Budget $1M-up Budget Higher 47% 39% 52% About the same 30% 29% 30% Lower 23% 32% 18% (Note: The answer option I don t know was omitted in our tallies.) 14% reporting it was about the same Charitable Giving survey analysis. 2

4 Estimate the percentage difference in giving between December 2017 and December Looking specifically at the percentage difference in giving between December 2016 and December 2017, of ECFA-related charities said that December 2017 was 7% or higher 35% (more than a third) Limited to churches only, 40% indicated that December 2017 came in 7% or higher Larger churches indicated higher Smaller churches indicated lower Among other nonprofit ministries said that December % was 7% or higher The percentage difference in giving was... -7% or more 17% 18% 11% 15% 23% -6% to -3% 7% 10% 6% 7% 7% -2% to +2% 22% 13% 209% 26% 22% +3% to +6% 19% 28% 22% 15% 18% +7% or more 35% 31% 41% 37% 30% CHURCHES Only -7% or more 14% 17% 8% -6% to -3% 6% 6% 8% -2% to +2% 21% 27% 11% +3% to +6% 19% 16% 23% +7% or more 40% 34% 50% NONPROFIT MINISTRIES Only ALL SIZES Under $1M Budget $1M-up Budget -7% or more 19% 22% 17% -6% to -3% 7% 10% 5% -2% to +2% 23% 23% 22% +3% to +6% 19% 13% 23% +7% or more 32% 32% 33% (Note: Blank responses and choices of not applicable were omitted in the tallies.) Charitable Giving survey analysis. 3

5 Roughly what percentage of your organization s annual income comes from donations (as opposed to fees, product sales, endowment income, etc.)? of ECFA-related charities receive more than 3/4 of their income from $ as compared to 78% Donations Fees Product Sales (a solid majority) $ $ $ $ Endowment Income Other Sources Among churches, 94% receive 3/4 + of their income from donations Among nonprofit ministries, 66% (with some types of ministries lower and other higher) do so These numbers hold true across all geographies. zero to 25% 10% 2% 7% 13% 102% 26% to 50% 6% 9% 9% 4% 4% 51% to 75% 6% 8% 5% 6% 4% 76% to 100% 78% 81% 79% 77% 82% CHURCHES Only zero to 25% 2% 3% 0% 26% to 50% 2% 3% 1% 51% to 75% 2% 1% 4% 76% to 100% 94% 93% 95% NONPROFIT MINISTRIES Only ALL SIZES Under $1M Budget $1M-up Budget zero to 25% 16% 17% 16% 26% to 50% 9% 6% 11% 51% to 75% 9% 8% 9% 76% to 100% 66% 69% 64% NONPROFIT MINISTRIES Only (cont d) Those focused on missions, evangelism, prayer, Bible translation/distribution Those focused on human services and community development Those focused on education, children, and youth zero to 25% 4% 12% 37% 26% to 50% 2% 8% 17% 51% to 75% 7% 14% 2% 76% to 100% 87% 66% 44% Charitable Giving survey analysis. 4

6 What would be the impact to your organization if 2018 represented an overall 3% decrease in giving from 2017? Going forward, seems tight for most ECFA-related charities. If 2018 represented an overall 3% decrease in giving from We have adequate reserves to cover the decrease When asked how they d respond if 2018 represented an overall decrease in giving from 2017, 3% We would need to make budget changes to offset the decrease CHURCHES Only 61% 39% We would need to make budget changes to offset the decrease. We have adequate reserves to cover the decrease. Hardest hit would be nonprofit ministries with annual budgets of <$1M We would need to make budget changes to offset 74% the 3% decrease. Among churches, the response varied by size, with larger churches faring better. of churches with 47% attendances of 62% of churches with attendances of (just under 1/2) >1,000 saying <1,000 saying We would need to make budget changes to offset the decrease. 39% 40% 39% 36% 38% 61% 60% 61% 64% 62% We have adequate reserves to cover the decrease We would need to make budget changes to offset the decrease 43% 38% 53% 57% 62% 47% NONPROFIT MINISTRIES Only We have adequate reserves to cover the decrease We would need to make budget changes to offset the decrease 35% 26% 41% (Note: The answer option I don t know was omitted in our tallies.) 65% 74% 59% Charitable Giving survey analysis. 5

7 Roughly what percentage of your organization s total 2017 income came during December 2017? DEC is not just another month for the majority of ECFA-related ministries. > 3/4 received an amount greater than 1/12 of their total 2017 income during December The typical ministry received to 11% 20% of its total 2017 income during December. Churches received a higher percentage during December than other nonprofit ministries. $ The bigger the church, the greater the % of income that came in during Dec zero to 10% 23% 19% 22% 25% 22% 11% to 20% 48% 52% 49% 44% 51% 21% to 30% 17% 15% 17% 20% 15% 31% and higher 11% 14% 12% 11% 12% CHURCHES Only zero to 10% 24% 27% 17% 11% to 20% 59% 55% 68% 21% to 30% 11% 9% 14% 31% and higher 6% 9% 1% NONPROFIT MINISTRIES Only ALL SIZES Under $1M Budget $1M-up Budget zero to 10% 22% 30% 16% 11% to 20% 40% 43% 38% 21% to 30% 22% 14% 28% 31% and higher 16% 13% 18% NONPROFIT MINISTRIES Only (cont d) Likewise, the bigger the nonprofit ministry, the greater the percentage of income that came during December (The specific percentages varied considerably between different types of nonprofit ministries) Those focused on missions, evangelism, prayer, Bible translation/distribution Those focused on human services and community development Those focused on education, children, and youth zero to 10% 10% 25% 36% 11% to 20% 50% 36% 31% 21% to 30% 27% 18% 25% 31% and higher 13% 21% 8% Charitable Giving survey analysis. 6

8 Where to go from here? These insights are part of a broad knowledge library of ECFA resources available at ECFA.org/content/resources. These include: EXCLUSIVE MEMBER BENEFITS & RESOURCES Nonprofit Knowledge Center policies, procedures, and whitepapers Live Webinars and Recordings Including CPE Connecting Donors to Your Ministry Executive Compensation Data for over 2,000 nonprofits ebooks Complimentary Downloads Online Videos Governance Toolbox Series Complimentary Downloads NEWS NonprofitPulse enewsletter ECFA ALSO PROVIDES Leadership Expertise at Conferences Monitoring & Reporting on Capitol Hill ECFA s desire is to help equip churches and ministries to fully achieve their God-given missions. As Dan Busby, ECFA President, says, ECFA hopes these survey results will be meaningful to all churches and other Christ-centered ministries as they review their current financial results and make budgetary plans. Charitable Giving survey analysis. 7

9 METHODOLOGY: ECFA s charitable giving survey, fielded April 12-May 1, was titled Tax Reform s Impact on Giving Trends. The stated purpose of the survey was to learn how the recent tax reform legislation and other issues may be impacting giving trends. It had three sections, one dealing with year-end giving, another dealing with tax reform impact, and the third with the universal charitable deduction. The 13-question survey drew 680 responses, mostly from ECFA-accredited charities plus other churches and nonprofit ministries on ECFA s mailing list. For questions about the content, including reprint requests, contact research@ecfa.org ECFA.org Charitable Giving survey analysis. 8