CBD Dues Model Presentation #1 Sustaining Number Dues Model January 2015

1. CBD Dues Model Presentation #1Sustaining Number Dues ModelJanuary 2015 Please save your questions until the end of the presentation. Thank you.

2. Objectives Review the current decades-old dues model, which is permission-based. Define the Sustaining Number Dues Model. Discuss how the model has worked for congregations that have adopted it. Discuss the performance of CBD’s recent Membership Promotion, which is based on the Sustaining Number Dues Model.

3. Why are we exploring a change in our dues model?

4. Why Explore Changing Our Dues Model? Membership numbers are trending down Ability to attract new members is trending down under old dues model Dues income is trending down Member’s age is trending up Current dues model is outdated

5. Why Explore Changing Our Dues Model? • Fixed dues appear to be a barrier to entry for prospective members • We believe this has impacted our new member growth • Process for special arrangements is often considered a negative and sometimes a demeaning experience • Creates a disincentive for some to remain in our Congregation if they cannot pay the full dues

6. Declining Membership CBD Membership from 1993 to Present

7. Age When Members Joined

8. Age of Current CBD Members

9. Declining Dues Income Trend

10. Declining Dues Income Trend Dues were increased to compensate for fewer members. Dues rates unchanged, but membership declined, decreasing our income. With fewer members, dues must increase or services and programming will decrease. Increased dues may cause a greater decline in membership. More members and income is preferred.

11. CBD Current Dues • Two adults, elder adult age 33 or up: $235/month • Two adults, elder adult under age 33: $111/month • One adult, age 33 or up: $118/month • One adult, under age 33: $56/month • Full Time Student, under age 40: $18/month Building Fund: $10/month for ten years

12. Membership with Reduced Dues *Includes grandfathered senior rates Currently, members needing “special arrangements” summit an application annually to the Financial Secretary, showing income and other information.

13. Dues by Age Group Analysis

14. Criticisms of Current Dues Model Barrier to entry and obstacle for retaining current members. Artificial categories based on age or marital status don’t cover the range of financial abilities within each status. People are more willing to give when not pressured into it. People do not like to ask for reduced dues.

15. Why Address the Dues Structure Now • We need new, young families to join the Congregation. • The long-term financial viability of CBD in 10 to 30 years depends on who joins now. • Our Mission -- We want to allow as many individuals and families to participate in the Congregation without jeopardizing the financial stability of the organization.

16. Goals for a New Dues Model Attract prospective members. Minimize the risk to current dues income – by removing financial reasons for resignations. Support the CBD $1.4M+ budget.

17. Research and Due Diligence • Articles by Rabbis and Lay Leaders • USCJ Webinars on Dues Models • Contact with Experts: • Barry Mael, USCJ Director Kehillah Operations and Finance • Rabbi Dan Judson, Dissertation on Synagogue Dues Models • Calls and emails with leadership at other synagogues • USCJ Membership List Serve

18. Transformation – New Vision • Membership is Voluntary • No “Pay to Pray” • All contributions are tzedaka, even “dues” • Tuition, and a few other fees, are still considered a “fee for service” • CBD stopped charging for High Holiday Tickets and contributions increased

19. Transformation – Next 50

20. What is it? Defining the Sustaining Number Dues Model

21. Sustaining Number Dues Model • No mandatory set dues. Members decide on the amount of their membership commitment, usually as a monthly amount. • The “Sustaining Number” will be provided as guidance. • The “Sustaining Number” will be determined by the Finance Committee of the Board of Directors. The rate is based on the financial needs to sustain the Congregation, determined by cost projections and data from prior years. • Members will not have to request permission to pay a lower amount, formerly known as “special arrangements.”

22. Kehilla, Sacred Community, Sacred Space, Tzedaka This is a change from a permission system to a tzedaka system. CBD is a holy space. It is a community. It is different than belonging to a country club or a gym, with mandatory fees. Sustaining the congregation becomes a choice of tzedaka. No one needs to apply for permission to pay less or more than the suggested amount. Everyone is treated the same and honored for what they can give. Dignity is preserved for new members and for members with a financial challenge such as retirement.

23. The Sustaining Number The Finance Committee uses income and expense information from past years to forecast the sustaining number. • Income from dues • Income from other continuing sources, i.e. Annual Campaign and Religious School Tuition • Expected expenses for the upcoming year • How many members are expected to contribute at various rates The Congregation trusts that members are responsible and will contribute toward dues as much as they are able.

24. How and when will a change take place?

25. How and When Will the Change Take Place? Implementation would be July 1, 2015, the beginning of our next fiscal year. Pledge Letters would be sent at the end of March, 2015. Pledges would be returned to the office by April 24, 2015 Billing, based on pledges, would begin in July, 2015

26. How will it affect me?

27. How Will It Affect Me? You will receive an Annual Pledge Letter, every year. You have control over the amount of your dues contribution. If the suggested “Sustaining Number” is too much for you, you can pay less. If you want to contribute more to cover the costs for those who cannot afford the suggested amount, you are welcome to do so.

28. How will it affect our Congregation?

29. Expected Changes for Congregation Based on the results of other congregations that have adopted this dues model, we are optimistic there would be positive effects. • Increase in new members • Reduce or eliminate the decline in income • The good feeling of tzedaka

30. How has the Proposed Dues Model worked at other Congregations?

31. Income and Long Term Stability The Dues Model for New Members has Reversed long-term declines in membership at many congregations Stabilized and increased income

32. How has this new model worked in other congregations?

33. Kol Shofar Tiburon, CA, Conservative, 400 – 450 member families By Nancy Drapin, Executive Director, June 23, 2014 • We did a pilot with new members and with dues adjusted members this year. We found that it lowered the barriers for affiliation and we had net new members for the first time In nine years. Some of our adjusted dues members gave more because they were not saddled with guilt.

34. Kol Shofar  Cont. Tiburon, CA, Conservative, 400 – 450 member families By Nancy Drapin, Executive Director, June 23, 2014 • Because of the self assessed structure we gained 69 new families. Most of them were young families with kids if they were new but we got ten rejoins of previous members who were boomers or older.

35. Kol Shofar  Cont. Tiburon, CA, Conservative, 400 – 450 member families By Nancy Drapin, Executive Director, June 23, 2014 • An important piece that I learned was that most young families have a specific amount of money to put aside for membership and religious school. I had them pay the full amount for religious school and then took the rest for affiliation.

36. Beth Chaim in Danville The no-dues policy is a big success for the 200 -250 member congregation. Article dated March 20, 2014 A contribution amount is suggested. Congregants choose amount to pay. Congregation has grown dramatically. Five new families a month. Congregation has not seen this kind of growth in a long time. Many joined because they heard about the new policy. The money issue is off the table. No one can complain about money, which is incredibly liberating. It became necessary to change the dues structure because of the sticker shock for prospective members.

37. Congregation Emanu-Elin San Francisco Emanu-El had voluntary dues 1996 to 2009 Only congregation that moved away from voluntary dues of which we aware. Confirmed with Rabbi Dan Judson. 1996, membership up, revenue flat 2009, not enough dues revenue, moved to fixed rates 2009, revenue up, membership down, 2100 from 2200 Younger than CBD. EE 20% <40 yrs., CBD 6% <40 yrs. old Members more transient than CBD, shorter roots Main service Friday draws only 150 Terry Kraus, Director of Membership Services (2003-present), said a congregation CBD’s size would have a better chance of the voluntary dues structure being successful. Terry Kraus said lack of “peer pressure” in fundraising.

38. Temple Israel - Sharon MA A case study of Temple Israel of Sharon, MA. January 2012, Rabbi Dan Judson In the first three years there was a modest increases in total revenue from dues and approximately a nine percent increase in membership. Upon implementation in 2009, the membership increased from 475 to 500 families. In 2010, the membership increased to 525 families. In 2012, the membership dipped to 516 families.

39. Beth Israel  Jackson, MI We had a lot of people who were not paying full dues and we never chased after them. We figured, lets turn this into a positive and promote a system that reflects our values. The results  pledges rose about 5 percent from the prior year. We communicated our process and stressed the importance of giving to sustain the community. The people rose to the occasion.

40. Synagogues with Sustaining Number Dues Model CongregationDenom. # Families Year Temple Beth El, Jersey City, NJ Reform 150 2012 Temple Beth El, Aptos, CA Reform 516 2010 Temple Kol Ami, West Bloomfield, MI Reform 331 2012 Temple Brith Achim, King of Prussia, PA Reform 276 2010 Oak Park Temple, Oak Grove, IL Reform 517 2003 Temple Sukkat Shalom, Wilmette, IL Reform 318 1995 Beth Israel Congregation, Jackson MS Reform 203 2012 Temple Beit Hayam, Stuart, FL Reform 250 2012 Temple Beth Am, Jupiter, FL Reform 409 2013 Woodstock Area Jewish Congregation, Woodstock VT Reform 125 1988 Central Reform Congregation, St. Louis, MO Reform 750 1998 Touro Synagogue, New Orleans, LA Reform 525 2014 Temple Israel, Sharon, MA Conservative 620 2009 Temple Beth Tzedek, Amherst, NY Conservative 425 2012 Ahavath Achim, Gloucester, MA Conservative 175 2011 Temple Emanuel, Marblehead, MA Conservative 487 2014 Temple Emanuel, Providence, RI Conservative 700 2014 The New Shul, Phoenix, AZ Independent 145 2002 Congregation Sh’ma Koleinu, Houston TX Independent 150 2014 Beth Chaim Congregation, Danville CA Independent 220 2014 • Source: Rabbi Dan Judson, whose dissertation is on Synagogue Dues Models

41. Would this work at CBD? In August 2014, the CBD Board implemented a new Membership Promotion, allowing members joining this fiscal year to choose their dues through June 2015. The prior fiscal year had only 12 new members in those 12 months. Since this Membership Promotion was announced, we received 19 applications for membership in 18 weeks. (9 fully processed, 10 in pipeline, as of 1.9.15)

42. Would this work at CBD? Members who joined using the Membership Promotion chose to pledge amounts for dues in a range that closely mimics the range that current members pay. Those who paid less in dues are still paying full amounts for Religious School. Overall, CBD has greater incremental income and membership due to the Membership Promotion.

43. CBD Roadmap • Board study continues • Obtain Congregational feedback • Board votes on new dues structure at March meeting • If approved by the Board • Pledge Letters will be sent to members following the March meeting. • Effective the next fiscal year, commencing on July 1, 2015.

44. Information Frequently Asked Questions (FAQ) and Sample Pledge Letter are online at http://www.beth-david.org/new-model/ We will update FAQ based on inquiries and feedback

45. Conclusion • The Board of Directors greatly appreciates your joining in this discussion. • Your questions and input are invaluable to the process. THANK YOU!

46. Frequently Asked Questions FAQ -- Frequently Asked Questions – CBD Dues Last updated January 7, 2015 (JW) What is the New Dues Model called? The Sustaining Number Dues Model Why would CBD want to change to a new dues model?We believe that we can increase membership and long term financial stability with a dues model that empowers people to invest in their community by being individually responsible for sustaining the synagogue. This choice of tzedakah is consistent with the values and goals of our congregation. How does it work at CBD?Each and every year, the Finance Committee projects the amount of revenue needed from dues to allow for a balanced budget. From this, we develop a “Sustaining Number.” The Sustaining Number represents the amount needed per membership unit that would raise the projected necessary dues revenue. How does the Finance Committee develop the Sustaining Number?The number is determined using data from prior years to forecast how much it will cost to sustain the synagogue. If I am a current member, how does it affect me?Every year, in the Spring, you will receive a Pledge Letter, asking how much you will contribute in dues to sustain the synagogue for the upcoming fiscal year, July 1 through June 30. What if I do not respond to the pledge letter? If the letter is not returned by the deadline, a default pledge will be assessed to your account. The default amount will be stated in your Pledge Letter. Can I pay my dues from a Directed Fund or by using Stock? Yes. Please contact Monica at 408-366-9108 or hernandez@beth-david.org to make arrangements. Will there still be an Annual Campaign? Yes. The Annual Campaign is held between High Holidays and the end of the calendar year, and helps us pay for our award winning programming. Each congregant’s annual commitment pledge in the spring, guided by the Sustaining Number, is only intended to replace income from mandatory dues. The additional income that CBD now receives from the Annual Campaign will still be needed. Can I include my Annual Campaign pledge at the same time? No. May I make a pledge to the Building Endowment when returning the pledge letter? Yes. What if I need to pay less, or want to pay more than the ‘sustaining’ amount?On your pledge letter, you state how much you will pay. Some congregants will pay more, and some – due to circumstance – will need to pay less. Has this dues model been tried at other synagogues? If so, what happened?Yes. It has been successful at the congregations who have used it, and has resulted in growth of membership and increases in annual revenue. In addition, the move to a Sustaining Number Dues Model has changed the way congregants feel about their synagogues and the community, moving toward a system of trust and tzedaka, rather than a permission based model. It removes the requirement to discuss personal financial information. Dignity is honored.

47. Frequently Asked Questions – Cont. Why is it successful? Joining a congregation is a positive action, and sustaining its financial health is a mitzvah. For new members, the Sustaining Number Dues model removes dues as a barrier to entry. For current members, it eliminates the financial reason to leave, and provides thedignity of trust; trust that all will sustain the synagogue to the very best of their ability. Are the details of the dues model exactly the same as at other congregations? The essence is the same, though details differ. The model has been implemented slightly differently by each community based on the traditions and history of the individual congregations. What is it called at other congregations? It has a variety of names. Temple Beth Tzedek in Amherst, New York, calls it the Membership Pledge System. Touro Synagogue in New Orleans calls it the Voluntary Annual Support System. Tifereth Israel in San Diego calls it the Sustaining Number Financing Model. Temple Israel of Sharon, Massachusetts, calls it the Annual Commitment Model. Have any congregations tried this system and had to change back?None that we found, and we have searched. We know of 21 congregations that have adopted this model in one form or another. Four have used the model as far back as 1988, and 17 have switched to it since then. Is this another name for the “Fair Share” Dues Structure? No. The “Fair Share” Dues structure depends on all congregants providing personal financial information and paying dues based on their income. Some congregations have tried “Fair Share” and moved away from it, though some still use “Fair Share.” If I want to change my pledge in the middle of the year, can I do that? Yes. In this circumstance, you would notify member accounts in writing. Currently, I pay the full year of dues in January. With the new dues model, will I pay in July? If you pay one lump sum annually, you will be able to set the month you pay. If changing the month of payment, any prorated prepayment will be applied toward the new pledge. What if I am on the grandfathered Senior Rate? You may choose to continue at that amount or choose to contribute a different amount. I just turned 55/60/65 years old, so do I receive a special rate for seniors? This model eliminates categories based on anything other than the number of adults in a membership unit. Your contribution is your choice. What if my question is not on this list?Email NewModel@beth-david.org

50. Schedule Presentation #1 Sunday, January 11, 2015, 12:30 – 1:30 p.m. Tuesday, January 20, 2015, 10:00 a.m. – 11:00 p.m. Wednesday, January 21, 2015, 5:15 p.m. – 6:15 p.m. Presentation #2 (additional information based on previous discussion) Sunday, February 8, 2015, 10:30 – 11:15 p.m. (Social Hall) Tuesday, February 17, 2015, 10:00 a.m. – 11:00 p.m. Tuesday, February 17, 2015, 2015, 7:30 p.m. – 8:30 p.m., following minyan