Church giving turns digital

To keep up with the times, houses of worship offer electronic payment options.

The earliest worshippers brought their gifts to the altar from the tangible fruits of their labor – be it crops, sheep, or cattle. Coins came later, then paper money, followed by checks. Now, as society moves toward an era of "digital money," houses of worship are scurrying to keep pace with the times.

The collection plate won't disappear any time soon, but many churches have begun offering electronic-giving options, including automatic deductions from bank accounts and payment by credit or debit card. A few are even experimenting with a "giving kiosk" in the lobby.

This shift away from just dropping cash into the weekly collection got an extra nudge this year from the Internal Revenue Service, which is mandating receipts for charitable tax deductions.

For houses of worship, the main impetus toward electronic giving has been to respond to churchgoers' changing lifestyles. But churches themselves are benefiting from the regularized giving and the often increased contributions that come with expanded giving options.

In today's era of plastic, fewer and fewer people, particularly in younger generations, are carrying cash or checkbooks. Some live by their debit cards.

"A lot of people, like me, are moving to 'paperless cash,' " says Nate Gibson, chief financial officer at Ginghamsburg (United Methodist) Church in Tipp City, Ohio. "It's a way to be of service to our people who prefer that method of payment." And he wouldn't be surprised, he adds, "if 20 years from now we had tap-swipe cards on the offering basket."

Electronic funds transfer (EFT) has been offered by churches for several years, allowing members to automatically debit their checking or savings account weekly, twice a month, or monthly. Then an electronic-payment firm handles the transactions for a church.

Vanco Services in Minnetonka, Minn., began serving churches in 1997, and now has more than 8,500 in 29 denominations in its program. "In a normal week, we have 40 to 50 churches signing up," says Len Theide, Vanco's vice president for corporate sales.

Both churches and churchgoers are pleased with the way automated giving strengthens stewardship, he says. Not only does it bring in donations on a consistent basis, even when people are on vacation or business travel, but it also can help the faithful fulfill annual pledges, a sometimes-challenging task for families with children or unplanned expenses.

"One woman in my own church told me that after seven years, this was the first year they'd made their pledge – after signing up for electronic debit," he says.

Religious institutions can also see a significant increase in donations. According to Msgr. Francis Kelley of Sacred Heart Parish in Roslindale, Mass., signing on to the program of ParishPay (a firm serving Catholic parishes) increased contributions by 75 percent from the parishioners who switched to electronic giving.

Some churches have begun offering credit- and debit-card payments. But use of credit cards has stirred controversy, given the country's massive credit-card debt.

"At first there was a lot of concern that churches were helping people get into greater debt," Mr. Thiede says. "I'm not sure that's gone away totally, but more churches are saying they'll do everything to encourage people to be financially responsible, but leave the decision to them."

Still, some steer clear of the credit-card option. At Christ's Church of the Valley in Phoenix, they've had automated giving for close to three years and make it available online, but they don't take credit cards.

"We went through a series on 'Getting Out of Debt,' and ... talked about getting rid of credit cards," explains Jon Edmiston, the church's director of information technology and communications. "So we didn't want to turn around and say, 'But you can give on your credit card!' "

On the other hand, ParishPay, which went into business in 2001 and serves 8 million parishioners, has found credit-card payments very popular.

"After three years, we surveyed 25,000 families using our service, and 55 percent used a credit card, while 45 percent gave through their bank account," says Tim Dockery, ParishPay's president.

They also found that 80 percent of those paying by credit card would not have signed up if the only option were debiting their bank account. They liked the added security, flexibility – and getting affinity points or frequent flier miles.

That kind of response worries some people, who say automated methods take away from giving as a part of worship, or turn it into a passive experience.

Mr. Dockery disagrees. "In the ideal world, our gift back to God is a thoughtful, prayer-filled response of generosity for what God has given us," he says. "But when the plate gets passed in most churches, I see a fumbling of wallets, a scramble in purses.... Our program gives people the ability to prayerfully decide what they want to give on a monthly basis and build discipline into their budget."

Yet there is the potential of being inspired to give during a service, or of responding to a new mission a church may undertake.

"People tend to give when they are ... thinking about the Lord's work," says the Rev. Marty Baker, founding pastor of Stevens Creek Church in Augusta, Ga.

About five years ago, Dr. Baker pondered how to enable members to donate electronically while at church. When a search turned up no options, he created a "giving kiosk" that features a PIN-secure pad like those at gas stations. Church members gave $100,000 via the kiosk the first year, and $200,000 the second (in 2006). "That's about 20 to 25 percent of our total income," he says.

The experience sparked interest beyond his own church, and Baker formed SecureGive to make the capability available to other churches and nonprofits. The giving kiosks will be in 34 other locations by the end of August.

Some people worry that the use of such technology commercializes what should be a sacred responsibility. But Baker says it's the motive that counts.

"The gift still comes from the heart," he adds. "This is just ... our financial system growing."

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