Do You Know Who’s on Your Church Donor Leader Board?
Do you know who’s on your church’s donor leader board? That’s a question that might leave you scratching your head but instantly reveal the financial insights you hold. For most pastors, tracking donations and expenses is the last thing they want to be doing, yet it’s crucial to the sustainability of your congregation. Here’s why you should spend more time with your head in the books and how you can keep your finger on the pulse of your church’s financial well-being.
Why Does Tracking Donors Matter?
Off the top of your head, you probably can’t say how much your church received in donations last month. You probably don’t know who your biggest contributors are, either. You might not even know the methods by which your donors prefer to give (i.e., in cash, at the kiosk, or through your online form). While you yourself may not need to know these things, it’s essential that at least one church leader is keeping a close eye on them.
Tracking donations and donors is an essential activity. By doing so, you:
- Gain information about who is supporting your church and if they’re giving more or less over time
- Understand what your church could do to get donors to give more
- Understand what your church could do to get more people to donate.
- Empower informed, open discussions about the financial well-being and needs of your church
With these things in mind, simply knowing how much money your church is bringing in or even some basic information about how it’s receiving it isn’t enough to say you’re on top of your church’s financial health. To achieve complete insight, you need to be tracking a handful of metrics.
Metrics Your Church Needs to Measure
As the old saying goes, you can’t manage what you don’t measure. As a church, you may be left scratching your head over what metrics you should track to ensure your financial health. Here’s a look at five that really matter.
1. Giving Units
A giving unit represents a family, a couple, or an individual who supports your church financially. Knowing your giving units and segmenting them appropriately will help you transform your donation requests and fundraising efforts, letting you better connect with donors and reach them on a more personal level.
2. Giving Per Unit
The total dollar amount of donations divided by the number of giving units you have identified represents the “giving per unit” metric. This is an important metric to track as it tells you how generous your church is. A higher giving per unit number means the average person/couple/family is giving more to your church.
Your goal is to increase giving per unit as much as possible. This ensures more equal “giving distribution” and helps support sustainable giving. A higher giving per unit also represents a donor base that is invested in your church’s mission and believes in your impact and ability to make a difference in the community and the world at large. Low giving per unit numbers, on the other hand, represent a disengaged donor base.
3. Giving Trends
Your church may track trends on a weekly, monthly, quarterly, annual, or seasonal basis. No matter how you choose to do it, keeping an eye on giving trends will help you forecast future budget needs, plan projects accordingly, and track the increase (or decrease) in donations overtime. For instance, if you know you raised $25,000 in last year’s Christmas Campaign and the number of giving units has since doubled, you can make better predictions and set ambitious yet achievable goals.
4. Giving Distribution
At many churches, a small percentage of supporters gives the majority of the money. For instance, 5% of your donors may be responsible for 60% of the money you receive because this 5% gives large donations while the other 95% gives small and/or occasional donations.
If the majority of your church’s budget comes from a few giving units, it’s important to first engage those units to ensure sustainability and then work to more evenly distribute giving by encouraging other units to give more. Otherwise, if one or more of those giving units were to stop giving, your church could be in sudden financial turmoil.
The financial health of your church is just as much about tracking what comes in as it about tracking what goes out. If you don’t have a keen eye on your expenses, your church could easily end up in debt, short on funds, or in an otherwise stressful financial position. In addition to understanding fixed expenses, like payroll, your church also needs to prepare for the guaranteed but hard-to-predict expenses, such as maintenance, expansions, and furniture.
If your church is not yet set up with a budgeting tool like YNAB or another accounting software that gives you a granular overview of your past expenses/income and budget, it’s important to take that step sooner rather than later. Only once you have the numbers in front of you can you begin to fully understand your financial picture and make plans for the future.
Build Your Donor Leader Board
Does your church have an even giving distribution, or is your sustainability largely dependent on a handful of major donors? Do you know who those major donors are? By tracking these metrics, your church will be better positioned to pursue future fundraising goals and execute projects without fear of running short on funds. While tracking metrics may not seem like the most exciting pastime, it’s an essential church activity.
Here at DonorWERX, we coach church leaders every day through tracking their donors, understanding the numbers, and starting open conversations about the importance of giving and financial health for the sake of the church’s future. If you’re wondering how you can start that conversation and begin engaging more donors at your church, DonorWERX can help. Schedule a free consultation today to Get started.