MS 202 GenerosityClass 4

David Thoroughman

David is the President and CEO of MortarStone, a privately-owned Christian data analysis company headquartered in Reno, Nevada, with employees in Chicago, Seattle, and Pittsburgh. MortarStone provides both standard and customized data analysis for the church, both nationally and internationally. The company works with over 600 churches, two million plus donors and is tracking giving to Kingdom causes in excess of $4 billion. David and his leadership team work with some of the largest and fastest growing churches in America. His passion is to help church leadership have objective insights in order to be more efficient with the resources that have been entrusted to them.

Class 4—Case Study on Generosity

What gets measured gets managed is a foundational concept for leadership. What you are measuring however has the potential to create a ‘false positive’ for the ministry.

Leadership teams need to be nimble, with quick access to the right metrics in order to make mid-course adjustments. This course will focus on how two churches appear to be very similar, yet one is clearly growing more efficiently.

Quick Refresher…

Giving Units GU give 95% + of total funding GU are 55% or more of total donor

universe [units] GU giving should be $45/wk+

Quick Refresher…

Annual giving and weekend attendance are great ‘corporate’ metrics. They tell a story about how the church is growing.

Additional KPMs should be layered in to support what both those metrics are suggesting.

Are we healthy [growing] and is there room for improvement?

Define and Benchmark

Depending on size of church, a GU should give ~$200-$500 annually

Benchmark: What % of funding do GU make up? GU as a % of DU GU weekly giving

Giving Bands

Giving bands are nothing more than segmenting GU within various ranges

Giving Bands respond differently, therefore we need to measure independent of the aggregate

Each of the 4-5 bands should be benchmarked and have a documented strategy with goals for improvement

Know your Funding Dependency

What portion of funding comes from top: 1% of GU 10% of GU 50% of GU

Giving growth should be broad based and not just from a small portion of givers

Faith Raising vs. Fund Raising

Case Study #1

What do we know about both? Independent Christian Churches~2,000+ AWA [and growing]20% + annual giving increase [2013-

14]Not restrained by seating capacity

Two Churches – Two Strategies

Case Study #1Two Churches – Two StrategiesTrick question – which one is healthier?

Giving Growth – Church #1Consistent growth

2011 - 2014

Annual Giving 2013 = $3.08MM

2014 = $3.8MM

23.4% increase in annual giving

Giving Growth – Church #2Consistent growth

2011 - 2014

Annual Giving 2013 = $2.02MM

2014 = $2.48MM

22.7% increase in annual giving

Giving Growth – Church #12013-2014

35.9% increase in # of donors

29.5% increase in # of giving units

2013-2014 DU = 1,400 DU = 1,902

GU = 910 GU = 1,179

Both DU and GU outpaced total Giving Growth Translation -- Healthy and Sustainable growth

Giving Growth – Church #2

2013-2014 DU = 1,180 DU = 1,165

GU = 632 GU = 626

2013-2014 -.95% decrease in #

of giving units

-1.3% decrease in # of donors

Both DU and GU KPMs contracted while top line revenue grew by a healthy 22.7%

Lets go a layer deeper…Gift band analysis

Church #1 Church #2

And one more layer deeper…weekend attendance growth vs. first time giver

growth – which KPM provides a more clear picture?Note -- Both churches are using TTM reporting

What can we learn?

If you measure annual giving and weekend attendance, does that tell you the ‘whole story?’

Which church has a sustainable growth pattern?

Which church is growing generosity vs. fundraising?

Take away --- not all growth is the same. Building the foundation can be hard, but it can yield long-term benefits

What you measure – it is important!

Direction…is so much more important than speed…

Many are going nowhere fast.

Are you one of them?

Knowing what to measure plus implementing great strategy will help you move quickly towards the goal!

Giving Dependency

GU Funding Distributions

2013 1% = 23% 10% = 53%2014 1% = 18% 10% = 49%

Church #1

Top 1% dependency decreased by -21.7%

Giving Dependency

Annual Giving Giving Unit Distribution

Annual Giving is up, dependency on top 1%-10% decreased. Would suggest a holistic approach to generosity development

Giving Dependency

GU Funding Distributions

2013 1% = 9% 10% = 44%2014 1% = 13% 10% = 48%

Church #2

Top 1% dependency increased by 44%

Giving Dependency

Annual Giving Giving Unit Distribution

Are you fund raising or faith raising?

Giving Dependency take away…

In a year where church #1 had ~23% increase in annual giving, they also had a decrease in financial dependency of top 1% and top 10% of their giving units.

We have all heard of donor fatigue. If you are fundraising [e.g. year-end shortfall ask] what does that suggest about your stewardship strategy?

What does it say about your ‘culture’ of generosity?

Donor Churn

Donor churn is the process of measuring new giving units compared to those that were giving but stopped.

Churn is normal and healthy in every church. The ratio of unit churn and the financial effects should be benchmarked and used in conjunction with those responsible for ‘assimilation’ and ‘retention’ [e.g. volunteering, community groups, pastoral care, etc].

Donor Churn - KPMs

External Benchmarks Units = 1.5 to 2.0 new donors to 1 back door

[lapsed] donor

Positive rate of giving retention

Donor Churn – Church #1 Ratio = 7:4 New Donors retained = 69% Financial retention = ~$218,000

Churn KPMs - 2014

Donor Churn – Church # 2 Ratio = 1:2 New Donors retained = 71% Financial retention = -$118,800

Churn KPMs - 2014

Efficiency and Effectiveness

Donor Churn helps leadership understand their ‘efficiency and effectiveness quotient.’

Every church has resources, defined as both people and financial.

Inefficient growth will tax both volunteers and giving.

Leadership and culture

In order to properly use the KPMs that we surface, their must be a leadership culture that accepts the objectivity of the assessment, and a willingness to engage with the data at an individual level. Donors are not merely IDs, rather they are people and as such there needs to be a willingness to connect with them when various indicators are surfaced.

Leadership and culture

Leadership to define the culture Model the culture Communicate the culture Protect the culture form wayward thinking Celebrate frequently and corporately

Establishing and cultivating culture is a process that requires: