Donors Proceed with Caution, Tithing Declines

The economy has changed many aspects of American life. A new research study by the Barna Group explores how the charitable landscape has changed over the last two and a half years. The study examines how many Americans have been affected by the economic downturn, how this has influenced their donations, and their outlook on economic recovery.

Taking it Personally
The vast majority of Americans (77%) reported being personally touched by the nation’s financial difficulties. About one-quarter (28%) indicated they have been affected in a “major way.” These indicators are unchanged from 15 months ago (75%, 27%, respectively).

However, when compared to the time period when the economy first nose-dived – roughly 30 months ago – the research confirms that the economic pressure on American households has been building. In November 2008 68% said they had personally been affected and only 22% felt affected in a major way.

Those most likely to report a major negative impact included Busters (ages 27 to 45), households whose total annual income was under $40,000, parents with minor children, adults associated with a faith other than Christianity, and unchurched adults.

Reducing Donations & Tithing
One way the Barna Group follows donor behavior is to track the percentage of adults who have reduced their giving in the last three months. This indicator gives a snapshot of both the recent behavior and mood of American donors. In the immediate aftermath of the economic crisis in late 2008, two out of 10 Americans (20%) had reduced their giving to a church or religious center; three out of 10 (31%) had downsized their giving to other nonprofits. Then, 14 months later, in January of 2010, both measures had increased: three in 10 adults had reduced giving to churches (29%) and nearly half said they had curtailed their generosity to other nonprofits (48%).

Based on the latest research from Barna, conducted in April 2011, the percentage of those who are reducing their giving to churches has not abated (30%). At the same time, the proportion of Americans who reported declining giving to nonprofits has dropped somewhat, to 39%. This is still higher than the measures revealed during the early months of the economic crisis, but softened since early 2010.

Those who have cut back charitable giving in recent months were most likely to be women, Boomers (ages 46 to 64), lower income households, families with young children, married adults, Catholics, and Hispanics.

The donors most likely to reduce church-related giving were Boomers, lower income households, Northeastern residents, and those who identify themselves as Christians but are only moderately involved with a church.

Among those whose church giving has declined, 24% have stopped all giving to churches; 17% have decreased their giving by 20% or less; 7% have lessened their donations by 20% to 45%; 17% have reduced their giving by half; 12% have decreased their giving by more than half. In comparison with just 15 months prior, church donors were nearly one-quarter more likely to have reduced their church giving by half or more.

Consistent with this trend, the Barna study revealed that the number of people who are tithing has also dropped. The practice of tithing – donating at least 10% of one’s income to churches or other charities – has been relatively stable over the past decade, hovering between 5% and 7%. Currently, the national tithing rate is down to 4% of the adult population. This is slightly below the levels of the last 10 years and significantly lower than last year’s rate (7%).

Outlook
Many Americans remain pessimistic about the prospects of a pending recovery. Nearly half of adults (47%) said they expect the economy to take in excess of three more years to recover. This is up from 42% in January 2010 and just 32% in November of 2008.

Three-quarters of Americans now believe the economy will take at least two years or more to get back to normal, or say that it will never fully recover.

Men, Mosaics (ages 18 to 26), those earning less than $40,000, unmarried adults, evangelicals, atheists and agnostics, and Hispanics were among the most likely to express concern about economic renewal.

Thoughts on the Findings
“The economic downturn influenced donations later than it affected other aspects of our spending,” explained David Kinnaman, president of the Barna Group. “Once it kicked in, though, donors have cut back significantly in their giving to churches and nonprofits. 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.

“It is true that many Americans are living on less due to salary reductions, furlows, loss of jobs, or the inability to get a position that matched a previous salary. These are difficult circumstances for anyone to face and could have legitimate influence on donations. However, most of the Barna indicators focus less on the amount of dollars donated and more on the underlying attitudes and generosity of Americans. Most Americans think of their giving as secondary to their survival. Yet, from a biblical perspective, generosity should be part of Christians’ fundamental response to the downturn.”

Kinnaman pointed out that “churches and nonprofits with the most effective responses to the downturn are those that have reduced their operating costs without undermining their impact, enabling them to remain effective with less revenue. At the same time, they view these lean years as a chance to invest back in their relationships with supporters and refresh and reframe the tangible impact of the organization. This is especially important when so many donors are rethinking their financial and charitable priorities.”

About the Research
This report is based upon telephone interviews conducted in the Barna Group’s OmniPollSM. This study consisted of a random sample of 618 adults selected from across the continental United States, age 18 and older, April 2011. The tithing figures are from a separate OmniPollSM tracking study conducted among 1,608 adults in January and February, 2011. Both studies included a minimum of 20% interviews conducted among people using cell phones. The maximum margin of sampling error associated with the January-February study is ±2.6 percentage points at the 95% confidence level. The maximum sampling error for the April study is ±4.1 percentage points at the 95% confidence level. Minimal statistical weighting was used to calibrate the aggregate sample to known population percentages in relation to several key demographic variables.

Elders are those born before 1946; Boomers are the generation born from 1946 to 1964; Busters are individuals born between 1965 and 1983; and Mosaics are adults born 1984 through 2002.

“Evangelicals” were defined in these surveys as people who said they have made “a personal commitment to Jesus Christ that is still important in their life today” and who also indicated they believe that when they die they will go to Heaven because they had confessed their sins and had accepted Jesus Christ as their savior. They also embrace seven other criteria: saying their faith is very important in their life today; believing they have a personal responsibility to share their religious beliefs about Christ with non-Christians; believing that Satan exists; believing that eternal salvation is possible only through grace, not works; believing that Jesus Christ lived a sinless life on earth; asserting that the Bible is accurate in all that it teaches; and describing God as the all-knowing, all-powerful, perfect deity who created the universe and still rules it today. Being classified as an evangelical is not dependent upon church attendance or the denominational affiliation of the church attended. Respondents were not asked to describe themselves as “evangelical.”