PLANNED GIVING – HOW DO YOU HANDLE GIFTS?

 

            In continuing our talk on planned giving, I want to elaborate a couple of topics from last week.

            Investing and managing funds – This is an important conversation to have. There may be someone in the church who is an investment manager who could help you. But I want to make something really clear. There’s a difference between investing assets to reap large amounts of income and being fiscally conservative. The monies that the church has do not belong to any one individually. These are funds that have either (1) been accrued over time by the leadership of the church from funds given and donated to the church; or (2) been given to the church to fund the needs and work of the church or to generate income to be used. As a church, we also have to be careful to not only not invest as we may invest our own monies, but also to protect the monies and to invest in those companies and ideas that support the Scripturally-based requirements.

            Recording and retaining wishes of donors – Donors give to organizations because they believe in what that organization is doing. It’s the same thing when a donor gives to the church. They may give for a particular purpose or project that the church is spearheading, or they may give to the church because they love the church and have supported it financially for many years. The question is: how are the funds given and how/are they restricted?

            Sometimes monies are given in a way that is not a typical check or cash gift. It may be as a beneficiary of a trust or investment. It could be a bequest through a will. It could be giving non-cash items. Each of these need to be accounted for differently. I will spend some time next week talking about this.

            Sometimes monies are given for a particular purpose. This is called (in accounting-language) a donor-restricted gift. If the church accepts a gift from someone who has defined how that gift is to be used, then you should abide by that. If a gift is given and the donor or the will says it must be used for educational purposes, then you need to use it for camperships, or scholarships or other educational reasons. Sometimes gifts are given with the understanding that the principal will not be touched and be allowed to grow so that the income can be used to support the church. These donor-restricted gifts need to be abided by. A non-donor restricted fund would be monies that are given to the church without any guidelines, and the church, through its Church Council or Charge Conference has defined what the monies have to be used for. These kinds of restrictions can be released by the church as well.  There are then unrestricted funds. These are funds that can be used for the church as it determines.

            Determining this information is important, but communicating it is equally important. You want donors and future donors to believe that monies or other items that they give to the church will be used appropriately and no squandered or used inappropriately. There are many ways to communicate this.

            In next week’s blog, I’ll also talk about the best ways to do this.

            If you wish more information on anything you’ve been reading about, please feel free to contact me at (315) 427-3668 or sranousacctg@twcny.rr.com or susanranous@unyumc.org.  I’d be happy to help or answer any questions.

 

                   PLANNED GIVING – CAN YOU HANDLE A LARGE GIFT?

 

            Last week I talked about planned giving. This week, I want to talk about why some people aren’t willing to give large gifts to churches: they may believe that their church couldn’t handle a very large gift. Why?

            Sometimes their impression is that the church functions in a way that a person may function when they are living paycheck to paycheck. It may seem to the potential giver that the church is always struggling to pay its bills, and wouldn’t know what to do if they suddenly had a larger amount of money.

            There’s a perception, warranted or not, that there is no one with investment expertise nor is there anything set up to handle large sums of cash. The potential giver sees “regular” members of the church in the meetings and no outside specialists.

            With members of committees changing regularly, and pastor changes, they see priorities of the church changing. The potential giver may be worried that there will be no control or oversight after they’re gone.

            Whether these beliefs are right or wrong, the church needs to face them head on.

            First, acknowledge the issues.

            Put an investment policy in place for large gifts.

            Set up an infrastructure to ensure that donor’s wishes are honored.

            Have the leadership sit down together and answer the question: if someone came up to us tomorrow and say they have a $250,000 gift and ask what we do with it, what’s our answer? Prepare a “wish list” of things that the church could invest in or spend on that would further the work of God in the community.

            Discuss how you would invest and manage the funds.

            How do you record and retain the wishes of the donor.

            Then communicate this information and your plans so prospective donors understand.

            Over the next couple of blogs, I’ll talk about some of these concerns in more detail.

            If you wish more information on anything you’ve been reading about, please feel free to contact me at (315) 427-3668 or sranousacctg@twcny.rr.com or susanranous@unyumc.org.  I’d be happy to help or answer any questions.