1. MS 202 Generosity Class 4

2. 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.

3. 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.

4. 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+

5. 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?

6. 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

7. 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

8. 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

9. 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

10. Case Study #1 Two Churches – Two Strategies Trick question – which one is healthier?

11. Giving Growth – Church #1 Consistent growth 2011 - 2014 Annual Giving  2013 = $3.08MM 2014 = $3.8MM  23.4% increase in annual giving

12. Giving Growth – Church #2 Consistent growth 2011 - 2014 Annual Giving  2013 = $2.02MM 2014 = $2.48MM  22.7% increase in annual giving

13. Giving Growth – Church #1 2013-2014  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

14. 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%

15. Lets go a layer deeper… Gift band analysis Church #1 Church #2

16. 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

17. 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

18. 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!

19. Giving Dependency GU Funding Distributions 2013  1% = 23%  10% = 53% 2014  1% = 18%  10% = 49% Church #1 Top 1% dependency decreased by -21.7%

20. 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

21. Giving Dependency GU Funding Distributions 2013  1% = 9%  10% = 44% 2014  1% = 13%  10% = 48% Church #2 Top 1% dependency increased by 44%

22. Giving Dependency Annual Giving Giving Unit Distribution Are you fund raising or faith raising?

23. 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?

24. 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].

25. Donor Churn - KPMs External Benchmarks  Units = 1.5 to 2.0 new donors to 1 back door [lapsed] donor  Positive rate of giving retention

26. Donor Churn – Church #1  Ratio = 7:4  New Donors retained = 69%  Financial retention = ~$218,000 Churn KPMs - 2014

27. Donor Churn – Church # 2  Ratio = 1:2  New Donors retained = 71%  Financial retention = -$118,800 Churn KPMs - 2014

28. 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.

29. 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.

30. 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: