In 2010, baby boomers accounted for 70% of all income being earned in the United States. They also gave over 90% of the total $98.6 billion given by individuals given that year to religious 501C(3)’s. This is to be contrasted by the fact that 25% of total income was generated by Generation X (the 46 million born between 1965-1980) and less than 5% from Generation Y (now commonly known as the millennials, those 85 -100 million plus born after 1980 including those that may not be citizens of the United States).
By the year 2018 a major shift will have occurred that will dramatically impact non-profits. It is estimated that 20% of all income in the United States will be earned by baby boomers, 25% by those representing Generation X, and 55% by millennials! Millenials in January of 2015 for the first time represent over 50% of the employed workforce.
Based on past percentages of giving, Projections show that baby boomers would represent 22% of all individual giving in 2018 – down from 89%, 10% would come from those representing Generation X and 9% from those representing the millennial generation. This would leave a 59% shortfall, or in terms of actual dollars approximately $58 billion dollar shortfall to 501(c)3 giving. In 2011, total giving to all non-profits was 298 billion with religious organizations at 32% of that giving for a total of 98.6 billion (Giving USA 2011 Study). Non-profit organizations who find they are receiving the majority of income from baby boomers have reason to be concerned.
What will our giving look like in 5 years, 10 years, and 15 years? What actions can we take today to combat the eventual change that will demographically occur in the next very short period of time? While there may be many answers, it is clear that ministries must start looking at ways to achieve financial sustainability. The non-profit organizations that understand this Tsunami is real and make the necessary changes will succeed, others may not come out as well. In either case, being good stewards of the resources God has given us will lead to financial sustainability which could lead to many more people coming to know our Lord Jesus Christ. Those with debt may have more problems than those that stayed away from debt. It is my forecast that financial sustainability will become a common word among our non-profits and an essential part of future financial stewardship among evangelical ministries.
The Effects of Reduced Giving to the Church
Tithing as a percentage of income by members of U.S. Protestant churches is down to 2.38%, its lowest level since the great depression (1929), according to Christian research agency Empty Tomb Inc. Each year churches are less able to use their offerings for service, mission, or outreach since they must keep a greater share of those donations for their own internal needs. This has a detrimental effect in relation to their presence in communities. As ministries become less visible, less people outside the church know about them, thus placing more stumbling blocks to their growth. Once this happens, ministries must rely even more heavily on their current attendees for financial support. It is a vicious cycle with no visible alternatives.
Let’s break down how tithes are used, according to Empty Tomb. Nearly 97% of all income into churches went to salaries and building expenses! Only 0.34% of income went to what Empty Tomb calls “benevolences,” such as charities and seminary training beyond the four walls of the church. Those are new lows, at least going back to the first report in 1968. The problem churches face regarding tithing begins internally; meanwhile organizations that are thriving during this economic time are those that have an external purpose such as providing drinking water, shoes for kids, or working towards the elimination of a disease. Clearly we have an internally focused problem while the organizations that are doing the best in this economic time are those that have ministries with a tactile purpose or a cause.
At first glance, the lagging economy would appear to be the primary culprit but this is not the biggest problem. Edith H. Falk, chair of Chicago-based Giving USA Foundation, indicated that the biggest drops in more than 40 years occurred in 2008 and 2009, as the recession took its greatest toll. 2011 and 2012 showed a slight rebound but hardly enough to count. But Sylvia Ronsvalle, Empty Tomb’s executive vice president and the report’s co-author, said previous research identifies no clear pattern that shows donations dropping during past recessions. In other words, the recession is only partly to blame, if at all. It is clear that the demographic transition from baby boomers who financially support churches to millennials who don’t even attend them is by far the larger issue and will only become more significant.
The 2014 report represents the fourth consecutive annual decline in benevolences. Put another way, American churches are spending more on themselves and less on beyond-the-church charities. If the percentage of income for benevolences in 2009 had been at the 1968 level, 0.66%, U.S. churches would have seen an additional $3.1 billion in benevolence spending. “Churches on the whole are continuing to spend more on current members and less on the larger mission of the church while cutting back on missionaries,” Ronsvalle is quoted as saying. She even goes so far as to suggest, “if a church is turning inward and valuing the happiness of its members” over service to others, it is moving on a spectrum toward pagan values.” The bottom line: U.S. churches seem to be more concerned with their own needs and their own desires over the needs of others. Perhaps this Tsunami of Generational Transition is unearthing bigger problems than we had ever imagined!
Learnings from the Past Generation
Living a godly life certainly has very little to do with wealth. Some of the best lessons ever learned were from people that had lived a certain way only to find out that it had no real meaning. This next generation ought to look to the previous generation in the following areas:
Wealth: When money becomes the key to our happiness, we inevitably live in fear of losing it, which makes us paranoid and suspicious. I have spent most of my life in this cautious stance – 37 years without the knowledge of or personal relationship with Jesus as my Savior and the past 29 knowing God as my personal savior. Money was my god. The problem is that when money is your god, there is no room for the real God. The greatest day of my life was the day I accepted Jesus Christ as my personal savior in May of 1986. The next best day was filing for bankruptcy that December after losing millions of dollars primarily from lawsuits that had to do with bars and casinos I owned prior to knowing God. Liquor liability lawsuits were the end of my god and I thank God every day for taking all of that away from me and replacing it with Him.
Possessions: When possessions become our god, we become materialistic, thinking enough is never enough, which makes us greedy. I grew up in Butte, Montana. My neighbor was a dare devil by the name of Evel Knievel, Bobby as we knew him. He was a really bad guy in almost every respect. I used to gamble with him, drink with him, and we even played a few rounds of golf together. He had it all – money, possessions, and fame. After accepting the Lord, I prayed for Evel for many years. I prayed that God would take all of those things that made Evel what he was away from him. When Evel Knievel accepted the Lord many years later, he gave some of his testimony, discussing possessions as what had been the center of his life. He explained how it wasn’t enough to have one Learjet, he had to have two so that when he was in one he could see his name on the one flying next to him! Possessions are never enough – you will always want more.
Power: When power and influence drive us, we become self-serving and strong-willed, which makes us arrogant. We see this all around us nearly everyday. I certainly saw it in my life prior to knowing God and it still can pop its ugly head up from time to time. With wealth and fame comes power which may possibly be the worst of the three. You believe that you can do anything, no mountain is too high, no one can stop you, and you can buy your way into anything you want. With God we find the truth that we are nothing without God. Power and influence have nothing to do with the equation whatsoever.
Fame: Fame can be just as large of an issue. When it is all about fame, we become competitive so that others will not upstage us, which makes us envious. To some extent we all want to be famous. The “I” word becomes very predominant in our life and we want more and more attention of what “I” did. Once we realize that we can do nothing without God, we are able to experience humility, a gratifying faith, and an understanding of what is truly worthwhile in our world. God, as author of all created things, shows us that we cannot take credit for a success that He has orchestrated, nor can we share the glory of the limelight from the sun He spoke into being.
All four of these pursuits fly in the face of joy and contentment. We must teach the next generation that only Christ can satisfy, despite what we have or don’t have, whether we are known or unknown, whether we live or die. And the good news is this: Death only sweetens the pie! The Bible states: “For to me, to live is Christ and to die is gain” (Philippians 1:21).
What does all of this mean? The secret of living may be closely related to the secret of joy: Both must revolve around the centrality of Jesus Christ. In other words, the pursuit of happiness is the cultivation of a Christ-centered, Christ-controlled life. When Christ becomes our central focus, contentment replaces our anxiety and we lose our fears as well as insecurities.
Steps to Change:
A vital component of any church’s success is to establish a consistent pattern of giving. With today’s economic climate and other fundraising entities clamoring for people’s help, getting the donations needed is harder than ever. Givers in your ministry are asking themselves, “Why should I give to my church?” In this day and age, the church has to put itself in a position to be deserving of the gifts of its people. It is not enough to just say, “We’re the church.” You cannot just expect givers to keep filling the annual budget bucket. You have to make the case that a gift here is a worthy investment. If you can’t show it, another group will fill this void. As you will see in our discussion of the Tsunami of Non-Profit Competition, there are plenty of places competing for our giving dollars.
Perhaps the greatest obstacle for establishing consistent givers is the lack of bold, visionary leadership – leadership that not only inspires people to give, but demonstrates a level of sacrificial giving themselves. Moreover, this leadership needs to be unafraid to talk about money. We can’t expect people will just “know” they should give money to the church, we need to have an open and constant discussion about it. We also have to make it easier to give money with such solutions as online giving and text tithing.
While visionary leadership is critical, one of the primary factors impacting current church giving is attendance frequency. Each generation has decreased in attendance with a corresponding decrease in giving. Studies have shown that all generations will give via the internet. Ensure that your church provides methods to accept recurrent gifts so that members can tithe even when they are not in attendance.
Generous givers are not concerned about meeting the minimum requirement or percentage of tithing. They do not live their lives based around possessions or money. They easily invest into the Kingdom through the church. Historically, giving is likely to increase after marriage and as income and wealth levels rise. Those who have finished college are also typically more likely to give. While those historical approaches are nice to look at they just are not working today. Marriage is happening much later in life along with the decision to have children. This group is staying away from the church too long, from the end of college to when their first child is born. On top of that, college debt is mounting and the typical college graduate carries that debt with them for 10 – 15 years.
Each generation responds to different motivators, boomers are more likely to respond to messages incorporating how the church is helping to provide for the basic needs of the poor. Generation X is primarily motivated to give in order to make their community better. Millennials respond to the message of helping make the world a better place. The internet has definitely made the world a much smaller place from a millennial perspective. Furthermore, millennials are much more likely to volunteer than give. Their ears and hearts are tuned to hear impact on human suffering and they seek out movements and causes. These younger donors will commit their resources to effect change more readily to causes that are outside the church. While millenials are cause givers, they do not see the cause of Jesus Christ as a cause. Millennials will care more about those that are not in the church than the church itself while the majority of our churches are focused in an opposite direction on those that are in the church. This inward focus will become a larger and larger problem for our churches and ministries. What would happen if ministries turned outward to take the hand of their near and far neighbors, constantly seeking new ways to be an effective witness to the mercy and compassion of our Jesus?
One of the old fashioned mentalities that all ministries need to work on is doing better with offering gratitude for the gifts they receive. Even though the money is going for God’s work and maybe should be considered a selfless act, a nice note or recognition can go a long way. Gratitude has been replaced by gratification: We have to teach thankfulness to our kids and show thankfulness in everything we do in our personal lives.
The Bible provides more than 2,000 verses on finances and generosity. A growing number of churches in the Pew Research study say they planned or considered planning to share God’s Word on these subjects through the following:
Financial classes/courses/groups, 65%
Sharing a Bible verse during the offering, 62%
Distributing pamphlets, 51%
Making financial counselors available, 48%
Conducting an annual stewardship drive, 48%
Showing videos in the worship service, 44%
Giving families a generosity devotional, 43%
Providing estate planning materials/seminars, 44%
Providing stewardship training for leaders, 40%
While we do not disagree with any of these efforts, what is most important is that ministries fundamentally wrap their heads around the idea that giving has changed in this new economy and generational transition. We may not ever see it return. We may need to imagine a much different scenario. Imagine this: What if ministries weren’t built on the greatest talent of their leaders, the best facilities with all of the whistles and bells, or the most incredible programs? What if ministries came together to unleash every single person to impact the world with the Spirit of God for the glory of God? What if……….