Make No Sudden Moves, Including (a Fall Capital Campaign!)
Right now, my counsel to churches is to make no sudden moves, including a fall capital campaign. Few if anyone in my industry is going to tell you this. Why? The stewardship industry makes 90% or more of its money, helping churches hold capital campaigns. Any consultant that tells you you can have a successful capital campaign this fall is lying to you, or they are ignorant. Either way, ignore anyone who tells you that you can hold that campaign this fall.
Upon the basis of what, am I giving my advice to you about delaying any fall capital campaign? Historical data and past history. Here are some things to consider:
First and foremost, you are in survival mode. I have told my clients that this will be their most challenging year financially. Right now, you are almost begging your regular donors to keep you afloat. Many, despite their revenue losses, have stepped up to help financially. We only have so many “asks,” and we have depleted that for now. The immediate is on everyone’s mind, not the future. Launching a fall capital campaign makes you look disconnected from reality.
Next, there is simply too much uncertainty right now. At this point, we still don’t know where the end is or what the end will look like. Let’s say this does run its course by June. You will have barely made it through the second quarter financially. Then July, the worst giving month for churches hits you. Then around the same time, the political campaigns will heat back up, adding more uncertainty to the mix. Americans will have a wait and see attitude, that will impact any capital campaign.
How have Americans reacted to past economic declines? Our past can give us a glimpse of the future. Two 21st century crisis comes to mind. 9/11 also impacted the country economically. Right after 9/11 campaign pledge to budget ratios began their drop. When the Great Recession hit, in 2008, capital campaigns never recovered. Why? People learned how fragile their assets were, and they were much more cautious about draining their nest egg.
Since The Great Recession, pledge to budget ratios have been more like one to one and a half times budget. Sure, there are exceptions to this rule, but the exceptions are always driven by six and seven-figure gifts. I have had every president of every major firm admit to me that their pledge to budget ratios are lower since 2008. Those that tell you differently are giving you a sales answer. I anticipate that future campaigns will see a pledge to budget ratio of 0.5 to 1 times.
Every time you have a stock market as volatile as ours is right now, you have uncertainty. Uncertainty causes donors to wait. Uncertainty causes donors to commit and give less. That was our present reality before COVID19. Why would you think anything has changed? Traditional capital campaigns have not been seeing the large commitments of the 20th century. Why would you think this fall would be different.
Your largest donor group is Baby Boomers and, they are protecting their nest egg. Let’s do the math, and I will illustrate what I mean. Some background. I have been a pioneer in analyzing church giving data, especially capital campaigns. Here is what we have found:
- 50% of all that is given in the typical church comes from 10% to 15% of a church’s donors.
- A $500K budget church I just did data on revealed that 16 families, 12.6%, of their donor base gave 50% of all that was given in 2019.
- 100% of those 16 are above 60 years of age. You can already see the problem. Their problem is your problem!
- 90% of the money pledged in a campaign comes from 15% of your donors, who are almost all, Baby Boomers.
- 10,000 Boomers a day retire, thus lowering their incomes, thus lowering their giving capabilities.
Do the math! Sometimes it is as simple as doing the math. Boomers had finally gained hope that their retirement would be secure. I can tell you today many of your Boomers, your top donors, are re-evaluating everything and now is not the time to spring a capital campaign upon them!
So, genius, what is your advice? Here is my counsel:
- Focus on getting through the next 30, 60, 90 and 120 days! Most churches are going to see around a 30% decline in giving this year! Make the tough decisions now.
- Cut your spending. This includes salaries. Your laypeople are doing this why are you not?
- Cut your budget. Immediately!
- Survive these next eight weeks!
- No big moves. Taking six months to assess where the land lies will not short circuit your future.
- Put off that capital campaign, for now. Don’t listen to my industry!
- Planning for the future must not stop! You are still going to need to raise capital. The how has changed.
- 20th-century thinking will be your demise! You need fresh thinking and creativity to raise the dollars you need.
- Get your house in order. My friend Dennis Moses has called this moment for a church The Great Reveal. COVID19 has revealed how fragile church’s financial positions are.
- Push everything into 2021! Keep planning but you need to be realistic. No one but your stewardship consultant is going to be ready for a fall campaign.
- Have a plan and work your plan! The lack of a plan has us in the position we are in. So, get a plan and start working on that plan.
There is no sugar coating this. Anyone who tells you anything different than the above is mis-leading you. I have 20 plus years of experience. I have reams of data to prove what I have laid out to you above. My industry simply is ignoring the truth that is in front of us. You need competent advice for times like these.
If you want to talk, I am here. I am,
Mark Brooks – THE Stewardship Coach