Dues Model Change Only a Piece of Financial Sustainability Puzzle

DUESBy Barry S. Mael

In January 2012, an article was written in eJewishPhilanthropy about Temple Israel of Sharon, Massachusetts and its leadership’s journey towards a dues model change. Since that time many reports, articles, studies and books have appeared on the topic, exploring how to raise the revenues necessary to fulfill Conservative congregations’ missions.

Over the last four years, we have spoken with leaders of hundreds of USCJ affiliated congregations about their current dues models and the possibility of change and, recently, collected data from 295 of our congregations via survey.

According to the results, of the five dues models in use (identified here), the fixed dues model is still used by 67% of congregations with no other model claiming more than a small share (the sustaining/voluntary pledge and tiered models are each used in 10% of congregations, while the progressive tax/fair share model is used in just 7%).

While 65% of kehillot have considered and researched other options over the last five years, only 18% have actually followed through and made a change. Of these synagogues that did make a change, 40% moved from the fixed dues model to the sustaining model.

Since switching, 53% percent indicated their dues revenue remained flat and 39% indicated an increase with only 8% noting a decrease. Increases ranged from 2-5% with some kehilla reporting over 10%, while decreases ranged from 3-5%.

After the dues change, 48% of respondents indicated that membership numbers remained flat, 35% indicated an increase in membership numbers and 17% experienced a decrease. The increases ranged from 1- 25%, while decreases ranged from 1-5%.

When asked specifically how the dues model change impacted their annual High Holiday or Kol-Nidre appeals, 36% said donations remained flat, 23% said they increased, 11% said they decreased and 30% indicated they did not have such an appeal.

In order to better understand the impact of dues on budgets, we asked what percentage of the operating budget comes from dues revenues. The percentages were as follows:

Percentage of Budget Respondents
Under 30% 10.42%
31-40% 22.08%
41-50% 20.42%
51-55% 11.76%
56-60% 12.92%
61-70% 15.83%
 Over 70%  6.67%

Previous data has suggested that in synagogues with more than 200 member units, 50-60% of the operating budget comes from dues revenue but our survey showed that 53% of kehillot are generating 50% or less of their budget from dues. This begs the question: where are kehillot making up the revenues formerly generated by dues?

In the 2015 UJA Federation of New York Synergy report (“Are Voluntary Dues Right for Your Synagogue?”), it was reported that 88% of the synagogues that had made the move to a sustaining/voluntary dues model had less than 550 membership units. Our data shows the same – only 4% of kehilla with more than 599 membership units have made a dues change. Some reasons could be the size and complexity of the organizations, as well as the need for individual contact with a majority of the membership during this kind of change, a huge human resources burden.

Moving to giving, 73% of synagogues indicated they have some endowment or restricted funds, but only 33% are actively cultivating donors for endowment, planned or legacy giving.

It became clear from comments in the survey that fear of revenue loss, uncertainty about risk/reward and fear of change are the primary reasons more of our kehillot are not considering dues model changes. However, the data suggests that congregations who have changed their model have fared the same or better than with their previous model, both in terms of revenues and membership numbers (92% have not experienced any revenue loss and 83% have not experienced any decrease in members).

Equally important, the data points to the urgent need to develop planned or legacy giving programs to compensate for decreasing dues revenues. While many of our synagogues have some endowment money owing to previous fundraising, mergers or past fiscal policy, most are not actively involved in developing or growing existent endowments, yet this important revenue stream cannot be ignored. While dues remain and will continue to be a significant part of sustaining Jewish communal life, they are just a piece of the financial sustainability puzzle.

Barry S. Mael is Director of Kehilla Operations & Finance, USCJ.