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Why Charitable Donations for Faith Communities are Drying Up

Journals focused toward the philanthropic sector have been making the case that nonprofit organizations have engaged in behaviors that effectively discourage big-money donors who are looking for opportunities to make a difference with their contributions. In particular, theology schools have developed the reputation for being focused on their own institutions rather than on the community of need outside their walls, according to an article written by Kay Sprinkle Grace for the Association of Theological Schools, a membership organization that accredits schools of theology in North America and promotes governance best practices. Denominations and local faith communities have the same perception problem.  

Like schools, other religious organizations “must recognize issues...that are getting in the way of our ability to reengage our donors and our volunteer leaders...if we are to break through to the next level of community and financial performance and impact.” In particular, “you must show them that you are guided not by what you see in the mirror (institutional needs), but by what you see through your windows: that you know what is needed and are providing it.” The five specific issues that must be addressed are:

1) A public perception that nonprofits are not having an impact commensurate with their investments of people time and money. In other words, that faith communities are failing in their mission, despite decades of support.

2) A growing sense that describing one’s organization as a charity “veers toward ‘tin cup’ and begging.” To be a charity is to suggest “a weak organization deserving of steady but modest support, rather than a powerful organization that has a measurable impact on its target community.”

3) A changing donor culture. High-giving donors self-describe as focused on “fail fast” and “pivot” as guiding concepts. By contrast, faith communities and organizations tend to be more focused on deliberation, creating consensus and working slowly because they are working with people. Donors need to be educated and acculturated. 

4) Tied to these other concerns is the sense that academic institutions “are the laggards when it comes to innovation.” It is almost a joke in many churches that innovation is stymied by the “don’t fix what isn’t broken” and “we tried that once but it didn’t work” attitudes. That timidity does not inspire giving.

5) The often-painful decision to set aside institutional dreams in the aftermath of the Great Recession lives on, discouraging new social investors who are looking to fund a big initiative for the innovative application of ambitious ideas. Faith institutions must put their self-imposed limitations aside.

Also see our resource, “Social Philanthropy and Church Mission,” in which the Rev. Joe Mann, former director of the Rural Church Division of The Duke Endowment, offers insight on the role of philanthropy in the local church, including what has changed and what philanthropists are now looking for in grant applications. Also see our feature article on what church members are looking for when making decisions about how much to give, titled, “Church Giving Tied to Gratitude and a Sense of Mission.”

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