dues disruption

Synagogue dues are dead: What’s the price point at which quitting the temple is impossible?

What’s the price point at which quitting the temple becomes unnecessary or nearly impossible?”

So asked a business leader in our synagogue. “Figure out that price point and our synagogue will grow organically instead of continuing to shrink.”

During a fascinating lunchtime conversation with this trusted congregant, the search for answers to challenging questions about our dues structure came to an end and we began to envision a new way forward.

Like most synagogues, Congregation Or Ami (Calabasas, California) understood that dues represented the largest portion of our budgeted income. Our membership, once climbing, had been slowly declining. After years of a 14% resignation rate, our 2011-2014 data showed that 22-24% of our households were leaving each year. While we had robust levels of new households joining, these did not ameliorate the losses. The 2008 financial meltdown was catching up with our synagogue. It was time to confront it head on.

Four Once-Frightening Eye-Opening Findings

Discussions with those who left yielded four major once-frightening findings:

  1. Our dues categories (14-16 unique ones) had one thing in common: each required households to fork over a sizable sum of discretionary income.
  2. Once children matriculated out of school programs, families no longer felt that paying such dues was “worth it.”
  3. Many congregants who could easily afford the full dues did not want to pay them, nor were they willing to submit to a dues variance process. Many knew their finances would not justify the synagogue reducing their dues.
  4. Programmatic solutions alone would not suffice, because competing priorities conflicted with synagogue commitments. More people saw a potential return on investment from paying for club soccer or drama than from paying synagogue dues.

Because we knew that every household that resigned directly hit our bottom line, affecting everything from dues income to fundraising opportunities to synagogue morale, we had to be risk-takers, disrupting our own marketplace. We had to address the financial elephant in the room: Dues were dead!

Restructuring the Synagogue’s Financial Model

We consulted with successful business leaders from the congregation to whom we posed a straightforward question: if everything were on the table – no sacred cows – how would you restructure the synagogue’s financial model?

Additionally, we consulted with:

Dr. Beth Cousens, who was brought in by the Jewish Federation of Greater Los Angeles.

Dr. Rabbi Kerry Olitzky, whose book New Membership & Financial Alternatives for the American Synagogue, written with Rabbi Avi Olitzky, described a dozen alternative synagogue financing models.

Union for Reform Judaism, including Rabbi Esther Lederman, Director of Congregational Innovation, and Amy Asin, Vice President of Strengthening Congregations.

Diana Ho and Management Arts, my rabbinic coach, who has guided my strategic thinking for over five years now.

We then invested a small task force with a gigantic mission: throw out traditional dues and shape a new funding model that would meet our short- and long-term financial needs.

Six Amazing Sustaining Results

  1. In five years (from 2015-2020), Congregation Or Ami’s Partnership (how we understand what others call “membership”) rose 28% from 312 to 408.
  2. Resignations reduced by half.
  3. High Holy Day appeal donations grew.
  4. Gala income rose substantially.
  5. Our young families population increased, leading to double digit participation in our Kid-ish Club and primary grades religious school.
  6. Our partnership income increased every year, while during these past five years, we consistently made or exceeded our budget, put 2.5% of expenses away in a long term restricted reserve fund, and expanded expenditures on staff and programs. We paid back our deficits and began planning for the next financial crisis (or pandemic).

Clearly, solid strategic thinking, innovative programmatic and spiritual efforts, and deputizing our failure-fearless staff contributed significantly to those increases. But most of us credit the new financial model we devised.

What We Did

Ultimately, committed to being Kehillat Netflix instead of Beit Blockbuster, we took a page from the Netflix playbook, a business model based on low cost, simple packaging and multiple tiers. Based on financial analyses of congregant 5-years dues and giving trends, conducted by volunteer congregants – including multiple MBAs and former consultants – we chose to widen our subscription base, while engaging donor-investors who would support the expansions of our community. We created 4 Partnership Tiers, multiple entry points for participation in our synagogue:

  • Congregant
  • Partner
  • Sustainer
  • Builder

For those who are primarily cost-conscious, the Congregant tier ($1,500) includes just the basics (High Holy Day tickets, and access to clergy and synagogue programs) at a cost that was half our previous dues.

The Partner tier ($3,000) is considered the “standard” membership level, and confers all the benefits one would typically expect for synagogue “members,” including High Holy Day tickets, Gala tickets, access to all events, and participation in youth groups. Those with children in our religious school must participate at least at the Partner level in addition to paying for tuition. Recognizing this can be a burden for many families, we maintain a simple, robust, and confidential variance process that quickly yields doable reductions for those who need it.

The Sustainer tier ($5,000) invites families to contribute some additional tzedakah along with their partnership commitments, and at the far end of this spectrum, the Builder tier ($10,000) makes explicit our desire to engage new donor-investors in our synagogue. Those that participate at these levels were offered various forms of perks, recognition and thanks, including a special gathering with clergy and a plaque in the synagogue. However, our new Sustainers and Builders compellingly argued schar mitzvah mitzvah (that the reward of the mitzvah is the mitzvah itselfPirkei Avot 4:2). Among the package of perks, the one that has proven to be most valuable – both to the synagogue and to the Builders – is the inclusion of a second, 1-year “gift partnership” that can be given to another family that has never been part of the Or Ami community before. In this way, our Builders truly become our partners in building the future of Congregation Or Ami.

These partnership commitments are based on two adult households, and single adults/single adult households pay close to half for each tier. We also have a tier specifically for young families with children too young to participate in our religious school. All also pay a safety and security fee and a community service fee. The core principle remains across all these tiers: create multiple entry points to satisfy the multiple reasons people join a synagogue. View the specifics of Partnership Levels at orami.org/join-us.

In five years, even as our partnership income has increased every year, we have raised partnership fees only once, by $100 for two-adult families. We are guardedly hopeful for continued success as we are currently meeting our goals for our conservative two-year congregational COVID-19 budget.

4 Game-Changing Pivots from our Playbook

  1. Energetic approaches to our more financially comfortable congregants have yielded sufficient numbers at the Sustainer and Builder tiers to offset those that moved to the less costly Congregant level. The rabbis and synagogue leadership actively encourage Partners to upgrade to the top tiers, recognizing that many want to invest in the synagogue and just need to be asked.
  2. Reframing tier changes has allowed us to consider it a success when households reduce from the Partner to the Congregant tiers. Under our previous financial model, most of these families simply would have left the synagogue altogether and purchased non-member HHD tickets. Consequently, our Finance Committee reasons, instead of losing $1,500, we have retained $1,500 of the $3,000 loss that would have resulted had they actually resigned.
  3. Young Adults/Families, under 38 with no children in the schools, can join at a reduced rate of $250/adult, less than the cost of an extended family High Holy Day ticket price. Since the rabbis are often the primary contact for young families, the Finance Committee empowered them to directly arrange reduced fees where needed. We consider this an investment in young families and in our future. Around 75% of our young families become Partners when their children are school age. In many cases, increased donations appear from the parents (e.g., grandparents) of the young families.
  4. Invitations to increase donations were made during the first three years to anyone who reduced their Partnership financial commitment (formerly, dues). The rabbis approached them to make up the difference with an increase in their High Holy Day Appeal donation. We hypothesized correctly that at all levels, people preferred to make additional donations rather than pay required dues. In fact, 94% raised their Appeal donation in the three years following this change.

5 Additional Secrets to Success

  1. Free Partnerships: We now provide a complimentary partnership to every local public and private school to raffle at their silent auctions (religious school tuition not included). These yield 6 – 12 new partners annually. Thanks to the wisdom of congregant business owners, we view these as loss leaders. Combined with an intentional relational approach, we have seen 90% of these families transition to paid Partnership the following year.
  2. Holiday Raffles: We hold a raffle after Yom Kippur, and at the end of Chanukah and Purim Family services. We randomly choose from participant data collection forms passed out prior to services or information texted to a special Google phone number. Winners of the two first prizes – a free year’s partnership to new households (who were never before partners at the congregation) – usually become full paying partners the following year.
  3. Gala Tickets: We included Gala tickets with the Partner, Sustainer, and Builder tiers. This increases likely participation in our second largest fundraiser and guarantees event planners can count on an initial substantial income. We learned that strategically providing complimentary tickets to non-congregant donors increased donations during the Gala beyond the cost of the ticket price.
  4. Builder-Level Gift Partnerships: Offering this perk builds good will and deepens the Builder’s connection to the synagogue, as many gift it to other family members or dear friends. We are finding that these ultimately pay for themselves, between increased donations, subsequent paid Partnerships, and the Builder’s own expanded generosity.
  5. Financial Mindset Change: We are actively shifting reliance on Partnership fees (“dues”) to creating a more active and year-round giving culture. Annual calls prior to the High Holy Day Appeal are yielding annual donation increases of 25-35%. Robust sponsorship opportunities now ensure that our three Holiday Essentials Bags (Rosh Hashana, Chanukah and Purim) are essentially underwritten by congregants and businesses. Multi-year gifts are now underwriting various staff positions and projects.

What’s Next?

Far from resting on our laurels, Congregation Or Ami continues to engage in our own synagogue disruption strategy, interrogating long held practices to uncover areas that once served us but now require rethinking and redirection.

We believe that no institution – no synagogue – has an inherent right to exist. We recognize that we cannot take the survival of our synagogue for granted. Only by continually disrupting the marketplace and responding with innovative and disruptive business and financial practices can a synagogue endure.

Congregation Or Ami plans to do better. We intend to soar.

David Weisz is a business leader with organizational transformation experience across a diverse set of industries. With a specialization in Organizational Change Management, he enjoys driving big, audacious ideas from concept to reality by taking a people-first approach to enable success.

Rabbi Paul Kipnes, spiritual leader of Congregation Or Ami (Calabasas), is a public speaker on spirituality, co-author of Jewish Spiritual Parenting, a spoken word poet, synagogue disruptor, spiritual journeyman, trekker, and regular meditator. He blogs at paulkipnes.com and at midrashicmonologues.com.