What church couldn’t use fresh sources of income? Churches ask their people for support; that much is assumed. But sweeping changes during the past thirty-five years have altered other basic assumptions on which most local-church financial programs are based.
One assumption begging alteration goes back to the years of the Great Depression, when it was widely, and usually correctly, thought that most people did not have much money. This stimulated the idea that it would be wise to ask people to commit to the church a portion of their future income, which led to the system of pledging.
This right-hand pocket, where people placed their income, became the source of support for both the operating and capital expenditures of the church. This system was based on the assumption that people’s needs exceeded their income, and unless they made an advance commitment to the church, that right-hand pocket might be empty before Sunday. The biblical teaching that the first tithe belonged to the Lord reinforced this system.
After World War II, the wave of church building programs gave a big boost to this system. Thousands of congregations asked their members to pledge a portion of their future income to pay for a proposed building. And church members responded.
The period from 1950 to 1970 brought a big change, however, as personal income in the United States increased at an unprecedented pace. Even allowing for inflation, the median family income in the United States rose 86 percent between 1950 and 1970. In contrast, between 1970 and 1985 that income increased only 3 percent. The fifties and sixties were an era of extraordinary prosperity!
One result was a great many people, especially those born before 1925 who had been taught a depression ethic during the 1930s, did not spend all the money in the right-hand pocket. Many people could and did give to special needs out of that excess current income.
At the same time, this increase in current income also caused many to see the need for a left-hand pocket in their trousers. This pocket was reserved for what economists call “accumulated wealth” and the rest of us refer to as savings.
In 1950, individual annual savings amounted to $13.1 billion. By 1960 this had increased slightly to $17 billion, less than the amount necessary to offset inflation. Between 1960 and 1984, however, the annual savings of individual Americans jumped from $17 billion to $156 billion, three times faster than the rate of inflation. Today that left-hand pocket contains a huge amount of accumulated wealth.
Another change has been a redefinition of the nation’s poor. In the 1950s, and even in the 1960s, the appropriate synonym for the poor was the elderly. In today’s world, Americans over 65 have an above-average level of income and a far above-average level of accumulated wealth. Most of the individual accumulated wealth in America is owned by people who have passed their fifty-fifth birthday.
This accumulation of wealth by the nation’s mature adults has, in effect, created a third pocket that provides significant income to a growing number of congregations: bequests and legacies, or what sometimes is identified as “deferred giving.” The number of bequests received by local churches has at least tripled since 1960. Every year about one congregation in ten receives a bequest from a person unknown to most or all of the current leaders.
Implications
These changes suggest a more sophisticated approach to local church finances is needed, one that takes into account several implications:
Especially in congregations with a large number of people born before 1925, many members will presently have only a moderate level of current income. They’re limited in how much they can give out of that right-hand pocket. Often, however, they retain a substantial amount of accumulated wealth and can contribute generously out of that left-hand pocket-if they are asked.
Many of these people, however, concerned they might outlive their money, contribute only modestly on an annual basis but may leave a generous bequest after their death.
Congregations that include a large number of longtime or retired farmers also need to recognize the significance of the second and third pockets. Those who began to farm in the 1930s or 1940s did not generally have high incomes; they financed their retirement years not out of savings from income but from capital accumulation. Their operation gained value, and they sold it to retire, living off the proceeds. With moderate income but substantial wealth among their members, farm churches are wise to realize those second and third pockets often are more important than the right-hand pocket.
The increased affluence of the American people has sparked a remarkable increase in the number and variety of charitable causes, including tax-supported universities, that make financial appeals to church members. And an increasing number of people are motivated by needs rather than denominational loyalty in deciding where they make their contributions. Institutional loyalties have eroded, as can be seen most clearly in the Roman Catholic Church and mainline Protestant denominations, where a decreasing proportion of the children born in the 1940s and 1950s are now affiliated with their parents’ denomination.
Churches can no longer count on the support of their people simply out of institutional loyalty. Barraged from all sides, people want to understand the need before they give.
Strategies
Should your congregation depend on that right-hand pocket’s current and future income as the base for financing your ministry and outreach? Or should you seek contributions from the other two pockets? Governing boards will need to consider this policy question. If you decide to expand your financial base, consider these possible courses of action.
The first possibility is based on the assumption that, unlike the 1930s, a great many people do not spend all their current income. The U. S. Census Bureau recently reported that older heads of households have an average of $108 in discretionary income every week. That means a large number of Americans have money available in that right-hand pocket for special appeals. The appeals will come from a variety of charitable causes including church colleges, seminaries, television evangelists, world hunger organizations, parachurch organizations, and children’s relief agencies. If the church asks members to contribute to what is perceived as a worthy cause, that discretionary income in the right-hand pocket can be an important source of charitable giving.
The twelve-hundred-member congregation of which my wife and I are members raised $126,000 in second-mile giving for missions out of that right-hand pocket in 1985. These special appeals for designated needs can be an important supplemental source of financial resources for missions, new ministries, special programs, and other needs that often are squeezed out of the regular budget. But only if people are asked. That same right-pocket income can easily drain into vans, vacations, and VCRs.
The next strategy probably will have the greatest appeal in congregations needing to pay off a mortgage or undertake a building program. Instead of relying solely on the traditional three-year capital funds appeal that calls for members to pledge out of current and future income, it might be wise to appeal to that left-hand pocket for contributions out of accumulated wealth.
Thousands of congregations have found this a realistic alternative. It is not a pledging program. Nearly all the contributions are made in cash, or the equivalent of cash, within a period of a few weeks. People give what they have accumulated-stocks, securities, property-not what they are earning. The typical one-day or one-week appeal of this kind (preceded by three or more months of careful planning and communication of the goal) usually produces an amount equivalent to: (a) from one-third to three times last year’s total contributions for all causes, or (b) $500 to $2,000 times the average attendance at Sunday morning worship. The actual amount often depends on the scale of the proposed project.
A third possibility that is being implemented by an increasing number of congregations is to schedule once or twice a year a daylong event focusing on the Christian view of death and encouraging members to remember the church in their will. This appeal to the third pocket rarely produces immediate financial benefits since, on average, people live eight years after making out their will. As part of a long-range financial program, however, when the results are seen, they can be substantial.
In a three-pocket world, the church is wise to tailor financial requests for each of the pockets. Individuals may find any one pocket empty, but they can find great satisfaction in giving from other pockets amply filled by a gracious God.
-Lyle E. Schaller
Naperville, Illinois
Copyright © 1987 by the author or Christianity Today/Leadership Journal. Click here for reprint information on Leadership Journal.
