In hard financial times, squeezes beget squeezes.
One little example: For more than a decade, Thrivent Financial for Lutherans, formerly known as Lutheran Brotherhood, has offered a no-charge program called “Simply Giving’‘ to churches and their members. Simply put, Thrivent set up free automatic withdrawals for members to pay their pledges.
“It’s been a wonderful thing,” said Nancy Bence, pastor at Peace Lutheran Church in Coon Rapids. “It’s created consistency in giving.”
But at the end of the year, the vendor that has run the program for Thrivent is going to begin charging churches 20 cents for each transaction in an effort to make the program “economically sustainable.”
That 20 cents may seem small, but it’s one more drop of red ink on already strained budgets. In the case of Peace Lutheran, Bence said, those 20-cent transaction fees will end up costing her church about the same as it pays for its Sunday school curriculum.
Drop in automatic withdrawals feared
Worse, Bence said, the transaction fees will discourage people from using automatic withdrawals as a way of fulfilling pledges because once members learn there is a charge, they might no longer participate.
“In urging people to use the program, we made a big point of the fact that it was free,” said Bence.
This comes at a time when most churches are being hurt badly by the shrinking economy. Churchgoers, who have been laid off, or fear being laid off, or have seen their retirement incomes shrink because of the fallen stock market, are cutting back in the amount they give on Sunday mornings. Many pastors and church business managers have horror stories about what happened to giving following the stock market collapse last fall.
Churches have been cutting staff and some programs at the same time members and communities surrounding the churches have greater needs.
And all of this comes at a time when many active church members behave — and pledge — differently from earlier times.
“The way people worship is very different than it was 25 years ago,” Bence said. “If you were a very churched person 25 years ago, you worshipped at least once a week. Now, even if you are highly churched, you probably are worshipping two or three times a month. On other Sundays, your kids have a soccer tournament or you’ve gone to the cabin. If you are giving an offering only when you attend church, that means the giving of even a highly churched person may be down 25 to 50 percent of what it would have been 25 years ago.”
Among other things, pledging doesn’t necessarily mean what it used to mean. In the past, when a member pledged to give $20 a week to their church, they gave that $20 whether they went to church or not. Now, to many, that means giving the $20 only on those Sundays they show up.
“Simply Giving” was almost an answer to a prayer. By using an automatic withdrawal system, participants were giving even on those Sundays when they weren’t in the pew. It allowed churches to have some semblance of balance in a budget, rather than a big bump at Christmas and nearly empty coffers through the summer.
The key, of course, was getting members to participate. At churches like Peace Lutheran, whole pledge drives were built around urging members to participate in Simply Giving.
“It has taken years to convince people that it’s OK to give over their bank account numbers to this program,” said Bence. “Once they participated, they liked it. They could choose to give once a month, twice a month, weekly. The amount didn’t matter. We would explain to people, ‘You don’t have to give a lot, but it means so much if you can give regularly.’ All they had to do was fill out a sheet once, Thrivent handled everything after that. It’s been a wonderful program.”
Bence said that only in the last few years have a substantial number of families at her church begun to participate. Currently, she said, about 40 families in her church of 1,800 members are participating, but she’d hoped to see that number double each year.
“I can’t imagine a better program, dollar for dollar, than Simply Giving,” she said.
But Thrivent can.
Thrivent will shift charitable giving
Even before the economy meltdown, Thrivent, a nonprofit with about 3 million members of all Lutheran persuasions, decided the program had two problems: Too few were participating at too high of cost.
Only about 2 percent of Thrivent’s members were using the program, said Dave Rustad a spokesman for Thrivent. The organization was paying $700,000 for the service and, as a nonprofit, it believes it can direct those dollars to programs that will have an impact of a higher number of members.
“We’re a nonprofit looking to better serve our members,” said Rustad. ” … We do recognize the value and the convenience for many, and that’s why we have not discontinued the program.”
Rustad said that Thrivent negotiated with the vendor that administers “Simply Giving” to get a transaction fee that is less than “the market rate” for similar programs.
The $700,000 Thrivent was spending to subsidize the program will be shifted to some other form of charitable giving by the organization, Rustad said. In 2008, he said, Thrivent turned over $126.2 million to “charitable outreach programs,” including $22.5 million in the form of direct support of individual Lutheran churches.
“We are not trying to make things harder on churches by doing this,” Rustad said. “One of the reasons we announced this so early is so that churches have a chance to decide what they want to do.”
From studies done by Thrivent on “Simply Giving,” the changeover of this program will cost participating churches anywhere from $20 to $150 a month, based on how many members in each affected church were participating.
Bence said she wants to make it clear that she appreciates the good works Thrivent has done.
“But this is going to be painful,” she said. “I was just at a meeting with a number of other pastors, post and they all agreed that this is just one more thing.”