Diversify Income

I always feel an obligation to attend my synagogue’s annual meeting. We have been a part of the Temple Ner Tamid community for more than 20 years. And I admit that I often write about stuff that I observe through the course of life at Temple Ner Tamid.

Today’s blog is not about the annual meeting. I have blogged about this before. I still am amazed how far the annual meeting has come in terms of its program, content, technology, and decorum. Remember the fistfight I once wrote about?

Discussion at this meeting turned to the budget and to dues. Like many other synagogues, the leadership has been considering changing the dues model and decided to hold off on such a change at this time. Things are going okay financially. For the most part, people are paying their dues. The Early Childhood program is booming, providing plus income to the synagogue, and most importantly, a feeder system for new congregants. Discussion focused on the need to improve fundraising for an enhanced dues/annual commitment effort.

While dues, or annual commitments, remain a big piece of a synagogue’s overall income, even a change in the model that is revenue neutral does not alter the fact that there needs to be additional income streams beyond this one. For the majority of Reform synagogues, income from dues/annual commitments is approximately 50%. Sometimes its higher, and even a little lower. The data available may be a bit dated, but I doubt there has been much change in terms of what percent dues income is of a synagogue’s overall budget.

With all articles and blogs that have been written about the “Pay What You Want” Model, no one has yet to write that this is a guaranteed path to a financial windfall. Or that this new model will solve all of your synagogue’s financial problems.

The new dues model is by no means a panacea. Thinking of the synagogue in business terms, whatever annual commitment model your synagogue has is really just a valuable component of an overall financial plan. Religious School, Early Childhood Education, annual fundraising, and income generated by an endowment fund are some of the other valuable elements of such a strategy.

Other annual fundraising efforts will need to continue. The High Holy Day Appeal, enhanced dues, and special events are some examples. One of the best things synagogue leaders can do is to create and grow the synagogue’s endowment fund.

We often read about the endowment funds of universities. $1 billion campaigns for Ivy League and even many state universities are not uncommon. And according to the National Association of College and University Business Officers, university and college endowments provide on average 9% of a school’s overall operating budget. At schools like Harvard, Stanford, and others, this is a whole lot more.

A focused effort to grow your synagogue’s endowment fund either through a comprehensive campaign or, taking the long term view, even through a bequest program, would have a positive impact on the synagogues’ financial outlook.

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