Non-profit giving trends

Guest Post – Forecasting Annual Church Revenues: Using Trends and Cycles to Help Predict Future Revenues – part 4

Mr. Jeff Beaumont is a CPA working for a firm that focuses on serving the nonprofit community. His opinions are his own and do not reflect the opinions or positions of his firm in any way. Because he speaks for himself, I won’t identify him or his firm in any more detail. He doesn’t speak for me either.

He has about seven years experience as an auditor working on the issues discussed on this blog. This is the fourth post in a series.

By Jeff Beaumont, CPA

Part 4– Final thoughts

Introduction is here. Description of forecasting model is here. Calculations discussed here.

Okay, once the research is complete, we can put together a fair and reasonably accurate estimation of tithes and offerings for budgeting for next year.

Next, the smell test. I have learned the necessity of this. So if the model says next year will increase by 5-10%, I should look at what has happened in the past (at least with the past I won’t have to make any guesses since it already happened!).

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Jim Ulvog

Guest Post – Forecasting Annual Church Revenues: Using Trends and Cycles to Help Predict Future Revenues – part 3

Mr. Jeff Beaumont is a CPA working for a firm that focuses on serving the nonprofit community. His opinions are his own and do not reflect the opinions or positions of his firm in any way. Because he speaks for himself, I won’t identify him or his firm in any more detail. He doesn’t speak for me either.

He has about seven years experience as an auditor working on the issues discussed on this blog. This is the third in a series.

By Jeff Beaumont, CPA

Part 3 – Calculations

Introduction is here. Description of forecasting model is here.

You still with me?

Good.

Trying to figure out how to forecast revenue for nonprofits is quite a sticky issue. After all, it is much simpler to try to forecast revenue for a company that sells some product, say, bread, soda, or gasoline. There is a reasonable understanding that people need (or want) those items.

For a financial model, there is the term “financial driver” which means anything that affects the rise and fall of revenues, expenses, etc. The four categories for revenue drivers are: (more…)

Jim Ulvog

Guest Post – Forecasting Annual Church Revenues: Using Trends and Cycles to Help Predict Future Revenues – part 2

Mr. Jeff Beaumont is a CPA working for a firm that focuses on serving the nonprofit community. His opinions are his own and do not reflect the opinions or positions of his firm in any way. Because he speaks for himself, I won’t identify him or his firm in any more detail. He doesn’t speak for me either.

He has about seven years experience as an auditor working on the issues discussed on this blog. This is the second in a series.

By Jeff Beaumont, CPA

Part 2 – Philosophy and foundation discussion

Introduction and encouragement to pastors is here.

We were forecasting revenue for the next year and knew we needed to be accurate. We needed to do our best to discern changes (be that attendance, economic changes, etc.) in the church that will affect revenue.

After the first year or two of using a flat percentage increase by looking at the past few years and trying to make a determination for the entire year’s revenue in under an hour (yes, that happens frequently in churches!), we realized our mistake to make it such a hasty and cursory decision-making process.

We then then took a different road. One that required more work but—hopefully—would be worth it in the end.

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Jim Ulvog

Guest Post – Forecasting Annual Church Revenues: Using Trends and Cycles to Help Predict Future Revenues – part 1

Mr. Jeff Beaumont is a CPA working for a firm that focuses on serving the nonprofit community. His opinions are his own and do not reflect the opinions or positions of his firm in any way. Because he speaks for himself, I won’t identify him or his firm in any more detail. He doesn’t speak for me either.

He has about seven years experience as an auditor working on the issues discussed on this blog. This is the first in a series.

By Jeff Beaumont, CPA

Introduction and encouragement to pastors

I found myself with a group of others only a couple of months before that church’s year-end was over to discuss the seemingly never-ending debate on how to set a budget. The good part, everyone agreed that expenses should be less than or match revenues. But then we needed to figure out revenue.

How do you determine that? I found myself holding in tension believing in faith that He will deliver what we need and, sometimes seen as “at odds”, being responsible and wise to take care of what we have been given. I was working in spreadsheets. I didn’t—still don’t!—know how to factor those concepts into budgeting. After all, God doesn’t fit in a spreadsheet.

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Jim Ulvog

We need a new way to evaluate charities – Part 2

Previous post discussed explained that is a major point by Mr. Dan Pallotta in two articles he wrote:

His main point is the excessive focus we as a society have evaluating organizations based on their “overhead” ratios and our intolerance for NPOs paying market salaries.  The unintended consequence is that we are restricting organizations from getting the money to have the full impact they could realize.

Action plan

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Jim Ulvog

We need a new way to evaluate charities – Part 1

That is a major issue for Mr. Dan Pallotta. He suggests the excessive focus we as a society have on rating the effectiveness of NPOs by “overhead” ratios and our intolerance for NPOs paying market salaries are restricting organizations from getting the money to have the full impact they could have.

I read two articles by Mr. Pallotta on the same day. Please check them out.

Why Can’t We Sell Charity Like We Sell Perfume, from the Wall Street Journal.

Charities Must Battle Public Misconceptions About Overhead Costs, from the Chronicle of Philanthropy.

In the WSJ article he says:

We have two separate rule books: one for charity and one for the rest of the economic world. The result is discrimination against charities in five critical areas.

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Jim Ulvog

4th State of the Plate report released for 2011 church giving trends

ECFA and Maximum Generosity released their 4th annual survey of church giving trends. You can see the ECFA press release here and visit the executive summary here.

At an overall level, giving is improving a bit. Comparing the portion of church reporting giving up, down or flat looks like this: (more…)

Jim Ulvog

Philanthropy articles in the Wall Street Journal

Five great articles in the Wall Street Journal on November 28. If you have yesterdays paper sitting around, grab The Journal Report section and save it.

I will discuss these articles in more detail later, along with my thoughts on the operate-as-a-business question.  In the meantime here are some links.  Check them out – they are not behind a paywall! (more…)

Jim Ulvog

How have contributions of ECFA members fared during the recession?

ECFA has analyzed the giving of their members who renewed membership in the last six months. Looking at members with year-ends between April and September 2010 and comparing that to those member’s revenue from three years earlier produced some encouraging information.

This would include organizations who have been members at least three years, so there’s data for comparison. Keep in mind this would be for NPOs whose fiscal year-end dates were in the middle part of 2010.

That said, here is the summary:

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Jim Ulvog

High level of pessimism revealed in donor survey from Barna

Giving is not likely to get good anytime soon. Confidence level in the current Barna survey is not particularly strong and seems to be deteriorating. Seems to me that confidence in the future is a major driver in how people will give.

If you are raising funds for your organization or trying to figure out when you can expand, pay attention to this part of the survey.

Here is Barna’s May 2011 report: Donors Proceed with Caution, Tithing Declines.

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Jim Ulvog

Barna says donors are less shell-shocked – I guess ‘less bad’ is an improvement

Less bad – that is the description I’ve been looking for as I’ve read several recent surveys of donor giving patterns. Things are still grim but not quite as bad as a year ago.

David Kinnaman, president of the Barna Group says the following:

Now, even as the economy shows some signs of improvement, donors are still reluctant to return to their previous levels of generosity. They may be less shell-shocked than 15 months ago, but they are still cautious.

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Jim Ulvog

2010 Giving trends for churches – part two

A few more observations on the data presented in an ECFA webinar with Brian Kluth, of Maximum Generosity, as the speaker. Previous post here discussed three-year trends.

Change in general giving (without designated funds or building projects).  The executive summary uses seven categories to describe the level of change.  I have combined the data into three categories.  Summarized changes in general giving:

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Jim Ulvog

2010 Giving trends for churches

Listened to a great ECFA webinar with Brian Kluth, of Maximum Generosity, as the speaker.  Survey of 1,507 churches show slight improvement in giving during 2010.

“State of the Plate” survey was conducted in February 2011.  It showed about the same proportion of churches experiencing a decline in giving along with an increase in the proportion seeing an increase.

Of interest to me is the 3 year trend data:

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Jim Ulvog