The Lapin Group
Two Birds? Pros and Cons of Adapting a Voluntary Dues Structure during a Campaign
The following post appeared on eJewishphilanthropy.com on April 9, 2019.
Attracting younger families, and generally growing membership, is a priority for congregations regardless of size, affiliation, or geographical location. From case studies, anecdotal evidence, and UJA-Federation’s two recent reports on the subject, many congregations are finding that voluntary dues are helping to bring in younger members and boost a congregation’s overall financial health. Though perhaps counterintuitive, voluntary dues often has the effect of creating a more engaged, less transactional feeling among members. And in this era of lower rates of affiliation across denominations and across faith communities outside of the Jewish world, it is a direction that many synagogues are considering. Congregations who adopt voluntary dues report increases in both members since and in giving revenue.
According to the 2017 UJA-Federation report, Connection Cultivation and Commitment: New Insights on Voluntary Dues, congregations spend anywhere from six months to two years preparing for a dues change. During this time, congregations research their members’ past giving history, connect with stakeholders and communicate with membership about the change. This flurry of activity actually mirrors the focus on congregational engagement and practice that is often associated with a capital or endowment campaign.
As we encounter an increasing number of congregations considering this change, some have asked about initiating this process as part of their capital campaign. While there are advantages to implementing the two activities concurrently, there are also potential pitfalls that can occur.
Culture of Giving: Campaigns are an opportunity for congregations to educate members about the impact of their gift will have on the people’s lives. A Case for Giving, which is the foundation of any campaign, will clearly outline the purposes for the funds, why they are needed and the difference that they will make in the lives of the congregants and the community. The natural progression of a campaign will engage new leaders, new donors and hopefully new members. Congregations find that they establish a stronger connection among congregants about how a synagogue functions and the need for ongoing support, creating a culture of giving that lasts long after the campaign has concluded. This culture is an important precursor and essential component to the voluntary dues model, making the two activities synergistic in nature.
Time: Campaigns are time consuming and require mobilization of clergy, leadership and dedicated members who will volunteer their time, efforts and expertise on behalf of the congregation. This substantial effort takes organization and commitment from key stakeholders. If combining the transition to a voluntary dues structure, along with initial implementation with a campaign, leadership can engage with members once, instead of completing the campaign and then revisiting the matter at a later time.
Cost: There are cost considerations when embarking on a campaign of any size. During the pre-campaign assessment, consultants reach out to interview stakeholders and leadership to get a sense of the breadth of the project and the scope of likely participation from members. Adding a question or two regarding voluntary dues is “natural,” and does not add to the time or cost of the study. By gathering data simultaneously, congregations can decrease expenses as compared to conducting two separate surveys.
The transition itself, however, does come with potential financial risks, as the voluntary dues model, essentially an annual giving effort, is predicated on achieving levels of participation across the community and may require a small circle of donors to be prepared to cover shortfalls as the transition occurs. Implementing the transition in the context of campaign makes that a bit easier but doesn’t totally obviate the risk.
Need focus: Messaging needs to be clear regarding the two initiatives. The goals of a campaign and the dues structure switch might be similar – to increase the financial capacity of the synagogue. However, the reasons behind an annual contribution and a gift to a campaign might differ. A capital campaign might be specific, such as building a new sanctuary, renovating an older building to make it more inviting to prospective new families, and offering naming rights to increase levels of multi-year commitments. Explaining voluntary dues is usually not as concrete. The balance between annual and one-time gifts might be hard to achieve, as logical as it may sound, when trying to educate toward support of both with different benefits.
Structures: Both a campaign and a dues system switch require the congregation to have support in place for these efforts. Human support is needed such as someone to review dues and giving histories and to organize the projects. System support such as campaign software or tracking software might also be necessary. If an organization is light on their capacity to run a project, running two might put too large of a burden on the office and leadership.
Foundation of Income: Dues are not the sole driver of a congregation’s financial health. While voluntary dues do contribute to the synagogue’s financial stability, those increases may not be realized in the first year or two, the congregation will need to plan for the potential shortfalls in the initial years. If running a campaign concurrently, this may place a financial burden on the congregation in the short term. Congregations embarking on both a campaign and a dues system switch at once will need either a reserve of income or, as noted above, a circle of members willing to help offset potential shortfalls.
Regardless of timing, certain elements need to be considered before starting either a campaign, dues structure switch or both.
Timeframe: According to the UJA-Federation report, congregations transitioning to and staying with a voluntary dues system for three years or more report positive membership and revenue growth after three years. The typical campaign lasts 12-18 months. Though the campaign may end when financial goals are met, the dues system requires education and a reintroduction to the system on an annual basis.
Flexibility: It is possible that during the fact-finding process, stakeholders are less than enthusiastic about the dues changes. Without proper education, it is often hard to imagine that taking away an important budget line item will actually increase revenue. If the focus is only the needs of campaign, there may not be the time or energy necessary to devote to educating members about annual support. Though leadership may want to implement both a campaign and dues change at the same time, the congregation needs to be ready for two major projects at once.
Transparency: A voluntary dues system promotes transparency. Because members can choose their levels, the needs for the funds and their impact must be articulated on an annual basis. Leadership must be prepared to be transparent through the campaign process.
The synagogues who were part of the UJA-Federation reports that those adapting voluntary dues saw a membership increase of 4% annually and a nearly 2% increase in financial support. With so many synagogues reporting success, it makes sense for congregations to explore this new dues model and see if it might be right for them.
Each congregation is unique, therefore there is really no “right” answer to when is the best time to implement the change, or if the switch is right for each community. The goal is to be open and willing to embrace new ideas and to explore if these new models will support the synagogue’s mission for generations to come.