The topic of “religious giving” is far too broad for my limited perspective and experience so I would ask your permission to allow me to focus on a particular area of religious giving.  It is where I spend my time and about which I have thought the most:  Protestant Evangelical giving.

And if I have your permission to focus there, then I would like to push even a little further and limit it to two general areas – but the areas where I think the bulk of giving occurs:  the local congregation and parachurch organizations.

As you probably know, half of all philanthropy in this country is directed to and through religious organizations of all kinds.  It is probably far more were you to include religious colleges and universities, religious hospitals and healthcare institutions, religious human service organizations and foundations with religious roots and purposes.  But using the percentages developed by Giving USA 1999 and reported in the latest issue ofPhilanthropy, more than $76 billion of the almost $180 billion given by Americans last year was given to religion.  Of that $76 billion amount, 63% or $48 billion was given to local churches – almost 375,000 congregations around the country.  More than that, virtually all of this giving is from current income of individuals and not from foundations or appreciated assets. (As well, millions and perhaps billions of dollars of religious giving goes unreported as people do not itemize it on their tax returns or they give directly to individual need or fail to report cash or in-kind gifts. Only 14% of the population give specifically for tax benefits.  The overwhelming majority would continue to give even if there were no tax benefit.) In fact, 96% of all giving to congregations and religious organizations is derived from current income and only 4% from appreciated assets.  Individuals owning appreciated assets is a phenomenon of the last twenty years and even though 50% of the adult population now hold appreciated equity investments, the habits of religious giving (and virtually all individual giving) in this country were formed around giving from current income.  We have yet to see what religious giving could be were people to begin to give from their wealth and not just from their income.

So, the story of religious giving in this country is essentially a story of tens of millions of individuals giving hundreds of dollars each annually to hundreds of thousands of churches that average less than one hundred people in attendance.  Just as small businesses in America generate a disproportionate share of the GNP, employ most of the people and generate the most growth in businesses and jobs, so it is with religious giving.

But it is also a story with two trends: First, giving as a percentage of income is declining.  In the 1950’s, a period of rapid church formation and growth in this country, giving as a percentage of income was at 3%.  In 1999, even though personal income has increased by 90%, giving as a percentage of income is at 2.5% or 20% lower.  The most generous are Mormons and Assemblies of God with 7% and 5% respectively and the least are Unitarians/Universalists with less than 1%.  Second, congregations are keeping more of their income.  In the 1950’s it was common for denominational congregations to pass 10% of their receipts on to the denomination.  Today, according to John and Sylvia Ronsvalle, congregations keep 97% of their income and distribute only about 3%.  There are many reasons for that change but it is not likely to reverse as new generations have very little loyalty to denominational offices and are far more interested in supporting local initiatives or global missions directly from their own budgets.  As well, growing congregations with increased giving are spending more on providing staffing, programs and facilities that attract new families.

However, I would like to take an even thinner slice of religious giving beyond general congregations.  I would like to focus for a moment on a group known as evangelical congregations.  No one has yet to come up with a definition for “evangelicals” that is precise but it is a network of congregations and organizations – a transdenominational movement begun in the early 1940’s by a group of young men (including Billy Graham) that now includes about 20 million Americans or about 7% of American adults.  Its churches are growing and the congregations give high proportions of their income and high priority to evangelism and missions.  In fact, evangelical churches and agencies provide 90% of all missionaries sent out from North America to other countries.  Lyle Schaller, the most respected church consultant and author in this country, has written that 4% of the Protestant congregations collect one third of all the giving to churches – and much of this 4% is made up of evangelical congregations.  So, while giving as a percentage of income as a whole is declining to 2.5% in churches, giving in many evangelical congregations is above 5% of income.  One other feature of these churches as it relates to giving is their intentional teaching about money and stewardship.  In his book Money Matters: Personal Giving in American Churches, Dean Hoge’s research is persuasive that the number one indicator of healthy giving is consistent teaching about giving in the church.  Evangelical churches have produced thousands of resources and have the help of dozens of associations and ministries to teach stewardship to their people. Many large congregations are beginning to create “ministers of stewardship” to coordinate all these resources within the congregation.

I would propose that the future would only be an increase of this trend.  The traditional financial connectivity and hierarchy of denominations and the denominational system is being reshaped around growing congregations forming their own alliances and the rise of new associations and denominations based on common mission and purpose and approach to ministry.  Giving is not going “upstream” anymore but is being “pooled” around the world by non-denominational specialized organizations (like World Vision in relief and development or Opportunity International in microenterprise development) that act as independent religious brokers and investors of congregational money and people resources for missions.

The second general area of Protestant Christian Evangelical giving I would like to address is the parachurch.  At the same moment those young men were forming the first evangelical networks the first wave of parachurch organizations were being born.  Coming out of a mixture of a renewed sense of global presence and mission after World War II and a frustration with the glacial speed of the traditional church, parachurch organizations with focused and specialized missions were created.  They were not led by ordained clergy but by laymen oftentimes fresh out of the military.  They were not funded by denominational offices but by thousands of small contributions of individuals.  They were not charged with broad pastoral and administrative responsibilities but with relatively narrow missions and global visions.  They grew rapidly because of their entrepreneurial founders, their focus on a specialty ministry like youth or evangelism or publishing, their ability to mobilize volunteers, identify and recruit donors and their passion for measurable results.  All these things were consistent with the mood of the country to accomplish great things and an expanding vision for the world.  Unfortunately, it also created a rift between the parachurch organizations and the local congregations who saw themselves as simply potential providers of money and motivated volunteers and Board members for these new ministries with exciting names and challenging missions.  Groups formed after World War II like Young Life, Campus Crusade for Christ, Youth for Christ, The Navigators, Youth With A Mission, World Vision and Christianity Today are organizations with thousands of staff and budgets in some cases in the hundreds of millions of dollars. Today one highly respected church missions researcher, David Barrett, estimates that giving to parachurches has now surpassed giving to traditional churches.  In fact, he believes that worldwide $100 billion is being given to parachurch organizations, whereas traditional churches receive $94 billion.  He estimates that by 2025 parachurch budgets will exceed $570 billion, almost double what he estimates for church giving.  Parachurches have such a strong relationship with evangelical congregations that David Schmidt in Prospering Parachurches estimates that evangelical church members give between 15% and 40% of their total giving to parachurch ministries.  Just as secular non-profits are proliferating, so are parachurch organizations.  I’m not sure anyone knows how many there are and they are involved in hundreds of areas: publishing, education, healthcare, political action, evangelism, relief and development, camps, associations, arts and culture and social services.  Of course, the danger is that parachurch “bloat” will increase as the income and influence increases.  To compound things, they are far more likely to benefit from the intergenerational transfer of wealth as they have built strong financial relationships with the post-WWII generation.  They had no built-in institutional loyalty or support so they have invested in and created global networks for financial development for almost 50 years.  Most churches do not benefit from estates or wills.  Parachurches have been educating their donors about such things for many years.  Churches count on regular participation and loyalty.  Parachurches count on performance of a defined mission and aggressive and sophisticated development.

We’ve been asked to identify some future trends in religious giving.  I’ve thought about a dozen that seem clear to me, many of which mirror similar trends in secular philanthropy:

  1. The increase of giving by women will affect both churches and parachurches. Men formed many parachurch ministries with their particular assumptions about measurement, results, impact, goals and transactional relationships.  Women give differently and their funding is going to re-shape some organizations, put some out of business and create many others.
  2. The increased attention to relief and development, the poor and microenterprise development among evangelical donors. One organization is a good example.  In 1995 the budget of Opportunity International was $7 million and in 1999 it had grown to $13 million.  A recent conference in Manila was organized for twenty Christian MED organizations and over 90 attended.
  3. The increase of individuals capable of funding their own ministries and organizations. Bob Buford started and supports Leadership Network and other ministries with his own money.  Tom Monaghan of Domino’s Pizza fame is financing and building his own Catholic law school.  There are many, many examples of wealthy individuals creating and funding their own parachurch organizations.
  4. The increase in venture philanthropy with the disciplines of investing and investment banking instead of reactive giving. One example: Counsel and Capital in Colorado Springs, which acts as an investment banker for ministries and foundations.  The principal, Randy Samelson, puts hundreds of thousands of his own money into each “deal”.
  5. The increase in funding of educational options by evangelicals. Home school associations, colleges for home schooled students, charter schools, private schools, the school choice movement, parochial schools, vouchers, etc.  Christians are actively involved in all of these.  One example is J.C. Huizenga, who has put $40 million of his own money into a for-profit charter school chain in Michigan.  The CEO America Foundation (though not exclusively Christian but strongly faith-based) through its affiliates and association has invested more than $270 million in private vouchers.
  6. The increase in congregation-based foundations with their focus on ministries outside the congregation instead of endowments for subsidizing internal programs. This is just starting but the independent and denominational megachurches are capable of creating and funding significant foundation assets for ministry initiatives. As they link with Christian Community Foundations and networks of parachurch organizations around the world, their influence will be formidable, just as it has been in changing the nature of church growth in this country and around the world.
  7. The increase in specialized staffing to train stewardship in large congregations. These staff will someday be as prevalent as youth ministers, education ministers or pastoral care ministers.
  8. The creation and increase of local and national Christian Community Foundations to create pools of funding through donor advised funds, area of interest funds and non-restricted funds for local ministry in communities. There are just 11 known Christian Community Foundations but they have already formed an association and one of them, the National Christian Charitable Foundation has assets of over $300 million and will make grants of over $50 million in 1999 to 1400 organizations.   That would rank their assets with the Communities Foundation of Texas, the Oklahoma City Foundation or the Oregon Community Foundation.
  9. The increase in family foundations among evangelicals. The fastest growing type of foundation among the largest association of evangelical funders (The Gathering) is the family foundation. If Walter Wriston is right then one area of opportunity is the creation and training of staff for those foundations and the educating of principals in the basics of foundations and philanthropy.  As with secular foundations, these family foundations are being created with appreciated assets that are truly startling for a beginning foundation.
  10. The historic competition for financial and people resources between congregations and parachurch organizations will continue to decrease. The networks of both congregations and parachurches will find more ways to work together around the parachurch expertise and low overhead and the increasing drive from younger donors and church members for results and personal involvement. Decentralized giving controlled by local congregations with the help of parachurch networks as delivery systems will only increase.  When the mainline denominations de-emphasized overseas missions they surrendered one of the great Christian motivations for giving.
  11. The creation of new wealth by entrepreneurial Christians will be more important than the transfer of old wealth to heirs. As well, the transition from giving out of income to giving appreciated assets will change the nature of the game.
  12. The creation of transnational networks of major Christian funders (individuals, families and foundations) for information, idea exchange and “deals” will expand the scope and creativity of global Christian capital. The Gathering, an association of individuals, families and foundations who each give in excess of $200,000 annually to Christian ministries around the world is a start in that direction.

I thank you for your attention and your invitation to be here this morning.  The state of Evangelical Christian giving is changing and adapting to new conditions here and around the world.  The motivation remains the same as when the Apostle Paul spoke to the Church at Corinth:  “The most generous God who gives seed to the farmer that becomes bread for your meals is more than extravagant with you.  He gives you something you can then give away, which grows into full-formed lives, robust in God, wealthy in every way, so that you can be generous in every way, producing with us great praise to God.”