Ministry Growth Indicators and Quarterly Revenue Trends: 2010 Q2 Performance

SUMMARY

In July 2010 we asked members of ECCU’s Ministry Advisory Panel (MAP)** their preferences for being informed of and receiving copies of their banks’ annual reports. Less than half of all ministries care to receive or even be notified that their bank’s annual report is available. Responses to questions about quarterly revenue trends continue to point towards stabilization in the economy, with approximately 70% of ministries reporting equal or higher revenues compared to the previous quarter and to the same quarter last year.

** The MAP is composed of ECCU member and non-member ministry staff and leaders representing evangelical Christian churches, businesses, schools, and other ministries. This report was produced by ECCU’s research department.

BANK ANNUAL REPORTS

Many banks invest significant resources to produce eye-catching annual reports. Is it worth the investment? Are there trees out there anxiously awaiting the results of this survey to see if they might be spared? Since ECCU produces an annual report, we thought it might be a good idea to ask the panelists how much annual reports matter to them. Here’s what they said.

Question: Has your primary bank published its 2009 annual report?

  • 43% of responding panelists knew that their bank had published its 2009 annual report. Of these same panelists, over half (55%) had not read it as of July 2010.
  • 54% didn’t know if it had been published.

 

Summary of findings:
73% of responding panelists would prefer to receive their bank’s annual report in some sort of electronic format, while only 13% would prefer a printed version. This is fantastic feedback! It challenges us to consider changing how we approach our delivery and production of annual reports. Hopefully, other financial institutions will follow suit and spare some already stressed-out trees.

QUARTERLY REVENUE TRENDS

July was the first month we used a new format for asking quarterly trending questions. The goal for the new format is to track changes in ministry growth indicators from one quarter to the next, along with annual changes in revenue.

ECCU developed a proprietary ministry segmentation framework that identifies key ministry growth indicators. Obviously there are multiple contributing factors to a ministry’s growth and overall health, but these metrics significantly correlate to ministry growth. The metrics are:

  • For churches: Average adult weekend worship attendance
  • For schools and colleges: Enrollment
  • For parachurches/other ministry organizations: Revenue

Let’s start with some interesting facts derived from the survey data:

For churches:

  • In the second quarter of 2010, the average adult weekend worship attendance for panelist churches was 1,439.
  • The average giving per attendee in the second quarter of 2010 was $467.

For parachurches:

  • The average revenue for parachurch panelists during the second quarter of 2010 was $1,469,810.

For schools:

  • In the second quarter of 2010, the average enrollment at panelist schools was 782.
  • The average tuition revenue per student in the second quarter of 2010 was $2,097.

The following chart depicts the performance in each of the key ministry growth indicators (attendance, enrollment, and revenue) for our panel ministries.

Q2 2010 vs. Q1 2010 Growth Indicators for All Ministry Types

  • 51% of responding ministries experienced minimal change (+/-4%) over the previous quarter.
  • 24% reported an increase in their growth indicators.
  • 20% reported declines.

 

Looking at revenue alone, ministry performance over the same period last year isn’t much different:

Q2 2010 vs. Q2 2009 Revenue Trends for All Ministry Types

  • 43% of responding ministries experienced minimal change (+/-4%) from the same period in 2009.
  • 31% reported a decline in revenue.
  • 26% reported an increase.

 

Recommendation:
Although stabilization seems to be the theme observed over the last year, as approximately 70% of ministries continue to report the same or higher revenues compared to last year, 30% of ministries continue to struggle, with no specific ministry type or size particularly standing out as struggling the most.

The best thing all ministries can do is:

(For ministries that have stabilized or are experiencing growth)
Focus on establishing appropriate levels of cash reserves and on developing a budgeting process that best equips your ministry to achieve overall health and to fulfill its mission. In other words, good stewardship with an eye on your ministry’s mission.

(For ministries that are experiencing declining revenue)
Let your membership and/or sponsors know. Communicate your needs and be proactive in developing campaigns that help bridge the revenue gap. Reduce fixed operational expenses and remind your ministry’s supporters that it serves a greater cause, with eternal spiritual impact. Encourage sacrificial giving, reminding people that God owns it all anyway.

 

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