Finding data on prior year contribution trends early enough in the year to have analytical value in a review or audit has long been a challenge. Usable data for 2020 is now available in March. This is current enough to allow leaders in churches and ministries analyze the 2020 financial results in time for it to be actionable.
Throughout the pandemic the Evangelical Council for Financial Accountability (ECFA) has been conducting quarterly surveys of its members. Lots of data has been gathered and processed.
On 3/4/21, ECFA published the results of their survey of full year 2020 revenue and expense trends compared to 2019. They have graciously made the results of the survey available for free. You can find it on this page of Feature Surveys. Click on the “Free Download” button beneath the Remarkable Resilience survey report dated March 2021.
The survey is based on responses from 559 churches and 730 religious nonprofits. That is a total of 1,289 responses. ECFA has lots of subsectors for its membership. For those sectors with 20 or more responses, the survey aggregates and reports results.
Who would benefit from looking at this survey? Two groups.
First, finance teams and senior leadership of churches and religious nonprofits to see financial results for 2020 of a large group of their peers. This provides an incredible opportunity to see how other organizations are doing.
Second, CPAs performing reviews or audits of churches religious not-for-profit organizations can easily find industrywide information to use as a benchmark. As mentioned earlier, financial information is usually published long after most of the reviews and audits have been released. It is rare I can find anything that is actually usable.
High-level results from the ECFA survey are summarized into three broad categories:
- total
- churches
- parachurch ministries
The survey split total revenue into two categories:
- cash giving, meaning regular contributions exclusive of GIK and investment income, and
- other income, meaning program revenue, tuition, fees, camp income, etc.
Results were grouped into following categories:
- Increase more than 10%
- Increase of 1% – 10%
- Same (meaning under 1% change)
- Decrease of 1% – 10%
- Decrease 11% – 20%
- Decreased 21% – 30%
- Decreased 31% – 40%
- Decrease more than 40%
Those eight categories were grouped into two broad groups:
- Higher, same, or close – four categories of more than 10% increase through a decrease up to 10% – essentially about the same or better
- Lower – bottom four categories of more than 10% decline
The results are incredibly wonderful.
Churches and religious nonprofits did far better than anyone would have expected a year ago. God has richly blessed those organizations. I am making a wild guess that churches and nonprofits were not members of ECFA were probably equally blessed financially. Break out of select data between ECFA members and nonmembers indicate that members of ECFA had financial results that were slightly better than nonmembers.
Let’s look at the survey results for cash income first and then look at other revenue.
Cash income
This category would include contributions exclusive of whatever program revenue an organization generates. It looks like this would exclude gifts-in-kind and investment gains or losses. For us CPAs, this is really helpful for analytical review purposes.
Overall trends
The overall results in total and then split between churches and parachurch organizations:
| cash income | higher, same or close | lower |
| all | 85 | 15 |
| churches | 83 | 17 |
| nonprofits | 87 | 13 |
I like the idea of including a 1% to 10% decline in the “up or about the same” grouping. In a pandemic year watching contributions drop by a mere 4% or 9% counts as a great year.
Those results, essentially 85% better or slightly down is astounding. If we all took a wild guess a year ago as to what the results would be for 2020 I don’t think any of us would have guessed the result would be anywhere near that blessed.
Detail info for overall trends
Here are the raw numbers for the eight categories of responses:
| cash income | increase | increase | same | descrease | descrease | descrease | descrease | descrease |
| > 10% | 1% – 10% | same | 1%-10% | 11%-20% | 21%-30% | 31%-40% | >40% | |
| all | 26 | 27 | 14 | 18 | 8 | 4 | 1 | 2 |
| churches | 13 | 30 | 15 | 25 | 11 | 4 | 1 | 1 |
| nonprofits | 37 | 26 | 12 | 12 | 6 | 4 | 1 | 2 |
You can slice and dice that information anyway you wish. I will do so.
Recategorize into up, same, or down
Accountants think in terms of greater than zero, less than zero, or no change. I absolutely understand why the small decline was included as it was. For my purposes, and to allow accountants to further look at this data, I will regroup those eight categories of responses accordingly.
Following categories are increase, no change, moderate decline, and more serious decline:
| cash income | up | same | down 1%-20% | down over 20% |
| all | 53 | 14 | 26 | 7 |
| churches | 43 | 15 | 36 | 6 |
| nonprofits | 63 | 12 | 18 | 7 |
Those results lead to the same conclusion as above. Churches and religious nonprofits came through the pandemic year of 2020 in far better shape than anyone would have expected in terms of contributions.
Overall trends for select sectors
As would be expected by anyone who is familiar with the religious nonprofit community, the results varied substantially by sector. Check out the two categories of higher/same/close compared to lower for six of the 14 sectors:
| cash income | higher, same or close | lower |
| International missions | 93 | 7 |
| Camps and conferences | 89 | 11 |
| Media | 88 | 12 |
| Pregnancy Resource Center | 88 | 12 |
| Education | 85 | 15 |
| Relief & Development | 81 | 19 |
Now let’s turn to program revenue.
Other revenue
This category would include various types of program revenue. Camp income, church program revenue, tuition for educational institutions, and all types of program income would be included here.
As you would expect, other revenue took a harder hit in 2020 than contributions.
Overall trends
Overall about two thirds of respondents saw other revenue in the higher, same, or close category. About one third saw a decline more than 10%. The summary data:
| Other revenue | higher, same or close | lower |
| all | 67 | 33 |
| churches | 61 | 39 |
| nonprofits | 71 | 29 |
Overall that is a 33% drop for other revenue compared to 15% for cash income.
Detail info for overall trends
So you can further analyze the data if you wish, here are the results by the eight categories of responses:
| Other revenue | increase | increase | same | descrease | descrease | descrease | descrease | descrease |
| > 10% | 1% – 10% | same | 1%-10% | 11%-20% | 21%-30% | 31%-40% | >40% | |
| all | 9 | 9 | 33 | 16 | 9 | 6 | 5 | 13 |
| churches | 5 | 8 | 30 | 18 | 12 | 6 | 5 | 16 |
| nonprofits | 12 | 10 | 35 | 14 | 7 | 6 | 4 | 12 |
As expected the results aren’t quite as good here. Around half of respondents saw income decline. Still, in a year when most charities would not have been able to conduct in the-person activity that is great news.
Recategorize into up, same, or down
For the accountants in the audience, I recategorized those results into increase, zero change, decline between 1% and 20%, and finally a drop of over 20%:
| Other revenue | up | same | down 1%-20% | down over 20% |
| all | 18 | 33 | 25 | 24 |
| churches | 13 | 30 | 30 | 27 |
| nonprofits | 22 | 35 | 21 | 22 |
Overall trends for select sectors
The impact by sector of the religious nonprofit community is more extreme. Here are the results for the same six sectors as mentioned above, using the survey’s results of higher/same/close and lower more than 10%:
| Other revenue | higher, same or close | lower |
| International missions | 88 | 12 |
| Camps and conferences | 10 | 90 |
| Media | 93 | 7 |
| Pregnancy Resource Center | 94 | 6 |
| Education | 71 | 29 |
| Relief & Development | 52 | 48 |
The results here are highly variable based on sector.
Pregnancy resource centers and media organizations saw only slight decline in other revenue by 6% and 7%, respectively.
Education was hit hard with 29% of respondents reporting a decline of more than 10%. Actually this is good news considering that in many states schools were closed completely for a large portion of the year. Relief and development sector saw a drop in the revenue by about half.
As you fully expect camps and conferences were hit terribly hard with 90% reporting a decline of more than 10%. In very pleasant contrast, remember that sector reported a mere 11% drop in cash income.
Other information in survey
The survey gathered far more information that I have already discussed. It includes data for staffing changes made in 2020 and expectations for staffing changes in 2021.
Survey includes plenty of optimism/pessimism information by quarter and most helpfully, optimism/pessimism expectations for the next three months of 2021.
Responses are provided for whether charities drew down their cash reserves in 2020 and expectations for drawing down cash reserves in 2021.
Survey also provides responses for what happened to non-salary expenses in 2020 and expectations for 2021.
If you have read to this point, you’ll definitely benefit from downloading the full report and analyzing it for yourself. Please get the survey to see what else you can learn. It will definitely be worth your time.