Fireside Chat #1: The Hidden Cost of Your Church’s Tech Stack

This transcript was machine-generated from the video recording and lightly edited for readability. Speaker labels are based on context. [unclear] marks a short passage the transcription could not capture.

Zach Norris: Hey, everybody. Appreciate y’all joining. Very excited to talk with Justin today, and excited for him to do a little introduction on himself. But for those of you who have never joined one of these video sessions, my name is Zach. I run Lamb Telecom. Short version of it is we shop IT services for various companies and churches. We save them a bunch of money and we don’t charge a dime. So it is a fun time doing what we do, and we are honored to have Justin from Donorbox here today.

Justin Dean: Yeah, sure, man. It is great getting to hang out with you today, Zach. My background: I was a communications director at a large church for a long time and then started a national [unclear] years at various giving companies, church tech industry broadly. And now I work really as a fractional CMO for a lot of different organizations working in the church market and nonprofit sectors, and I’m thankful for Donorbox for putting this together.

Justin Dean: I think we’re going to have a good discussion on the hidden costs of church tech, and really trying to get pastors and churches to focus on the bigger picture and being better stewards of what they’re bringing into their churches. Both of us are in this industry and there’s a lot of nuance to it. I think it’s important for us to say we’re not here to sell you guys on anything. We’re here to talk about where churches are quietly bleeding money across their tech [unclear].

Zach Norris: Yeah, it’s very cool, and it’s interesting because we both work in the industry, so to say. So I think it can be really fun to talk through. I guess the leading point here, as far as those bleeding costs that you mentioned a moment ago: most churches don’t really audit their expenses at all.

Zach Norris: They sometimes have these kinds of floating expenses, particularly in IT, just because the IT people are so busy. They’re always slammed, and to expect them to look at every individual line item is crazy. So telecom and internet costs end up getting set up, and it might be years later before someone looks at it. And oftentimes when we look at it, we end up finding that typical savings end up somewhere between 20 to 40 percent, which is excellent. I’m curious what that looks like on the giving side, because I see a lot of legacy platforms out there when I’m poking around on church websites and that sort of thing.

Justin Dean: Yeah. I think it’s pretty similar to the IT world, the telecom world. It’s something you don’t think about often, right? It’s set up, it just works. You’ve got the Wi-Fi, the phone system, and those are necessities that you have to have, particularly when you have a facility, and everyone just assumes they’re fixed costs that you have no control over. It’s similar in the giving world and giving platforms, and church technology in general. You need online giving, digital giving, in today’s day and age.

Justin Dean: There are plenty of churches that are just passing the plate and only accepting cash and check. There are plenty of churches still doing that, but you’re looking at pretty small churches generally in that bucket. And we’re seeing over and over that when you introduce digital, you’re not taking away from that. Everybody’s still collecting cash and check, but you’re adding options that make it easier for people to do things like recurring giving. Most people don’t even have checks anymore. You need to give them the options to give how they give anywhere else in the world these days, particularly with their phones.

Justin Dean: Most churches do, but they see that as just another necessity. They don’t look at the bigger picture, or really the itemized details of what it’s truly costing them and how many options are out there. There are plenty of platforms that even say it’s free. They advertise it as no cost. That’s really not true. There might not be a monthly cost with some platforms, but there are certainly transaction costs. You can’t avoid Visa and Mastercard and American Express, or even banks, charging their share of that transaction.

Justin Dean: That’s just the cost of using computers and transferring money digitally. Some platforms are just passing that on, and some platforms need to make a profit in order to support it. The various transaction fees across all the different competitors are vast. Some charge a monthly fee on top of that, some don’t. But churches really aren’t looking at that. They see the donations come in and they see the transaction hit their bank account, and they’re barely noticing that there’s a difference between the two. I talk to churches all the time at conferences and things, and they never know the percentage rate that they’re paying. They never know the true cost of what the giving platform costs them per year.

Zach Norris: Yeah. Hidden fees, absolutely. They can annihilate a budget like no other space.

Justin Dean: Yeah. Let alone the pain of a switch. If a church has a lot of recurring giving set up, you lose one or two of those in a transition and that’s a big deal.

Zach Norris: Yeah, totally get that. A lot of times, what we’re seeing on the IT side often ends up in redundant phone lines, overprovisioned internet, contracts that auto renewed that people don’t actually need. I saw one the other day. It actually wasn’t very church specific, but they ended up having these phone lines that tripled in price one month and then tripled in price the next month, and now very quickly they’re paying five grand a month for extra phone lines that they don’t actually need, and nobody caught it until it was quite literally five grand on a bill.

Zach Norris: So we see these things that just randomly show up. Thankfully, because they’d seen the increase there, it was implied that they were out of contract, so they were able to cancel that as quickly as possible. But it is a sting for sure. And I’m curious what kind of weird things like that you might see on the giving side. I know it’s probably a little bit more regulated.

Justin Dean: Yeah, I don’t know if it’s regulated. It’s probably a little more simplistic. I think most platforms charge tiered pricing. You might have signed up when your church was 100 people, and you’re paying whatever rate and whatever monthly fee, and then suddenly fall comes around and you’ve got 20 new families coming into your church, and suddenly your costs go up to the next tier. That kind of stuff happens automatically, and you’re growing, so you may not even see it. You’ve got more donations coming in, and it might even offset it to where it’s barely noticeable. That’s pretty common pricing, really focused on how the churches are growing, and adding features to those new tiers that you may not even know you have now or may not even need.

Justin Dean: Maybe you just need giving. You didn’t need all the add-ons that you’re paying for. A lot of platforms are kind of all-in-one. Everything comes in a package and you might just need giving, or maybe you’ve got your website somewhere else and you don’t need the website that they offer. It’s kind of like the old cable TV bundled packages. We get a free phone line, but we don’t need that. We’ve got cell phones. Why are we paying for that? Can’t you just make the package cheaper? You’ve got channels that you don’t really need or want, that kind of thing. So there are a lot of different nuances that nobody’s really paying attention to, because they just think we need this in order to survive, and whatever it comes with.

Zach Norris: Yeah, that’s just crazy, tacked on, like this “we’ve always done it this way” concept that costs you. Not actually reevaluating something, even every two or three years, right? Maybe you don’t have the staff to do it every three months, six months, or every year, but every two or three years is a healthy thing, I think, on those kinds of services.

Justin Dean: And that’s the thing: stewardship. Your church’s pastors are entrusted with stewarding the money that’s coming in, and to not pay attention to these things is not very obedient to that, to be frank. Every dollar saved on infrastructure and software and technology is another dollar available for ministry, or at the very least for paying your people. Church staff are notoriously underpaid. But just like anything, you balance the budget and tighten the things that can be tightened, and there’s suddenly more money available so that people can be adequately compensated and you can do things that you didn’t think you could do before.

Justin Dean: Sometimes the savings can add up to $30,000 to hundreds of thousands of dollars a year, just because you adjusted 1% of your total giving, depending on the church size. And it’s not about being cheap or finding the cheapest platform, even. You want to find a platform that’s going to meet the needs of your church, and there’s a lot to be said about good technology and how easy it is to use. That’s one thing I do love about Donorbox: they’ve got a very easy to use platform. They’ve got one of the best giving forms out there, and it offers every kind of way to give right there on the form, including Apple Pay and Google Pay and Venmo, all integrated into one form, which is pretty cool. That may very well be the best option for your church and its needs, and your accountant’s and bookkeeper’s needs, to keep everything in one place.

Justin Dean: They’re not always going to be the cheapest per month, but it might be a better fit for you overall. You might actually get more donations because it’s easier for the donor to use, and that offsets the cost compared to one of the cheaper platforms. You go to the cheaper platform and it’s just a terrible experience, or it might be easier for the donor but harder for the bookkeeper, and the bookkeeper is spending way too many hours that you’re paying for. You’ve got to weigh all those different options when you’re talking about how to best steward the money that you’re spending.

Zach Norris: Yeah, definitely. You’ve got to treat the staff right, and your contractors and your volunteers. You’ve got to make sure they’re happy as well. And I think that’s one of the things that someone like Donorbox understands, from a ministry standpoint: what it’s actually like to operate a church. I think that’s something a lot of churches need to be aware of when they’re selecting a vendor for anything. A vendor really should be helping you steward the resources that you’ve got, not just asking for money or asking for a contract.

Zach Norris: That’s one of the things. I went to finance school, business school, which I didn’t end up using. I went into IT instead, which is funny, but I guess I kept a little bit of the business piece. One of the first things you learn in business is that the goal of a business is to make money. And if that is the core of these vendors, then you need to look for the vendor that’s going to go above and beyond and actually apply the knowledge that they have, the resources that they have, time, talents, treasures, whatever it might be, toward supporting your ministry, instead of just trying to extract the value and do the natural thing that a business is set up to do.

Justin Dean: And talk about that. If you look into most of these church giving companies, they’re owned by private equity across the board. Donorbox is a private company, and there are several out there just like that, and that’s important. They don’t advertise that, and it’s hard to find that info out. But when you look into it, is it really in the best interest of the church to do business with someone whose literal goal is just to make as much money as possible every quarter and increase prices? Or do you want to go with a company that’s actually built by people who love the church and want to grow the church, and they’re providing everything at the cost they need to continue to grow?

Justin Dean: We’re not against making money so that your company can grow and survive and be here forever, because you definitely don’t want a giving company that goes away or folds. You want them to be able to support your needs. But there’s a difference between the two styles of companies out there: constantly adding products you don’t need and funding the development of that, when we just needed online giving and we don’t need all this other stuff that we’re paying for. You’ve got to look into that stuff when you’re looking at the resources that you’re spending. The contracts thing is another one. To lock a church into five-year contracts with some of these companies is insane. You’re locking in the prices too, and that just makes no sense.

Zach Norris: Yeah, generally we find the Goldilocks point to be somewhere around the three-year mark. It depends on the type of technology. Some are month to month, others are up to three years. Very rarely do I see a five-year contract make a lot of sense. It makes it hard to audit what you’re spending if you’re locked in either way.

Justin Dean: Yeah, and usually there’s a refresh on staff members, a refresh on vision, a refresh on most things, naturally all around that three-year mark, so it’s a healthy number for a lot of things. But either way, if you can ever figure out a way to go with no contract, without the risk of a massive price increase, again depending on the type of solution that you’re looking at. Nowhere else do we sign contracts like that. You can move around all kinds of different vendors, but to be locked into something like that, something that fuels the heart of your church and keeps it going, you certainly want some flexibility with that.

Justin Dean: It’s just important to audit, I would say every quarter even, to determine: are we using the right technology across the board, from telecom to giving to everything? Especially with the way the world changes so much now. AI is making things cheaper and more efficient in a lot of ways when it comes to technology, and so you want to be able to adapt quickly to that and not be locked in.

Justin Dean: That’s why I love Donorbox sponsoring this conversation. They want churches to be able to make informed decisions, even if that means switching to them or from them. The heart is: we want what’s best for the church. And they’re trying to make that easy, not only with the prices and the platform, but with being able to migrate from one platform to the other. You should own that data. The data is the church’s [unclear]. You’re on your own, you’ve got to start fresh with the new company. It’s like, no. They make it easy to move that data over, and they make it easy to move recurring giving over. That kind of stuff is very important, and I hope that other companies in this industry latch onto that.

Zach Norris: You can tell there’s been a lot of research and development money put into making the product easy, which is really cool. So, in the interest of time, a couple of action items. What should people be looking at as far as their giving goes? What kind of stack should they look at, what questions should they ask? And what does that look like for just this quarter, maybe?

Justin Dean: Yeah, I think we start there. I would encourage everyone to start a quarterly audit of their whole tech stack, not just giving, but everything they’re using. Particularly with giving, reach out to your giving provider and ask them: what is the rate that we’re paying? How much did it actually cost us to accept these donations over the year? Put some real numbers behind it. There’s something called an effective rate, because most platforms allow the donor to cover the fees if they want to. They give 100 bucks, they can click on cover the fees, and it makes the donation actually $103 or $104, whatever the fees are. That way the church gets the full $100. Not everybody clicks that or wants it, and not all churches even offer it, so there’s a blended effective rate. You might be paying 2.9% on all your transactions, but if half the people cover the fees, that might actually be 1.5% or lower. You’ve got to take a look at all of that and see what is truly the cost across the board.

Justin Dean: And then go and compare that. Take that to Donorbox, take that to Pushpay, take that to Tithely, and compare them. Say: here’s what we’re paying now. What would you charge, what does it come with, and is it worth it to switch? Then make that calculation. How many donations did you actually get digitally over the last 12 months? Times that by the 1.5% or the 2.9% or whatever you’re paying, and calculate the difference. That’s quite a bit. That’s enough to fuel your missions project, or put a new roof on the church, or a new AC unit that you desperately need. That literally can be the difference in things your church needs, without having to change anything about the way people give. So definitely take a look at that, and take a look at it often. I would say make that a quarterly rhythm.

Zach Norris: Yeah, that’s great. And I think it goes without saying, but I always have to say it: please do not put your donor data into AI to ask it what the effective percentage is. Definitely know what you’re doing there. Protect your donors’ data. So, how can people learn more about you and Donorbox, and ask more questions if they’re curious?

Justin Dean: I’m all over social media. You can find me on X, or Twitter, or whatever we call it these days, at Justin Dean. I speak at conferences nationwide all the time, and I’m easy to find. And definitely thanks to Donorbox for putting this together and having us chat. It’s always nice to hear from somebody else in the industry with the heart to serve churches. Definitely give Donorbox a look. Like I said, they’ve got probably the best form and system out there for making it easy for donors to give, and no contracts, and you can move recurring giving over easily. They’ve got a lot going for them. I think it’s definitely worth a look as you’re auditing the best way to be a steward of your money. Look at everyone out there and just make the best decision.

Zach Norris: That’s great. I love it. Perfect. If anybody’s interested, feel free to ask me as well. I would be happy to make an intro. But Justin, for today’s conversation, I am really grateful and I appreciate the time.

Justin Dean: Yeah, man, it’s great chatting with you. Thanks. God bless.

Zach Norris: You too.