In the Dakotas, many of our churches are connected to agriculture. We have members that our farmers, retired farmers, and/or children who inherited farmland from their folks. The scary thing about farmland transactions is the tax basis. Most farmland has been held for decades so the tax basis could easily be $100/acre or less. If you sell that land, you’ll have to pay capital gains on all the gain over those decades.
If you have people in your church that are considering cashing out of the farm or maybe they don’t have a next generation willing or able to take over the farm, they may be wanting to donate that land to the church. You would be surprised by how many churches have received a quarter of farmland that is now a huge benefit to their current ministry.
Endowments can be a huge blessing to the church or ministry that you love, but few people understand how it works. I’m not sure I do the best in explaining it in this video, but imagine if one of the biggest annual givers to your church is a dead person.That’s what an endowment can do. We have people that have faithfully supported the church for 20, 30, 50 years, and they wish they could support it for 50 more. An endowment will allow them to do that.
A properly managed endowment reminds us of the saints that came before us and provides on indefinite and growing stream of income to the church. You also don’t need to be a multi-millionaire to establish an endowment that will bless the church for generations. A $10,000 endowment will generate close to $500/year for the church. That’s $500 that could be sending kids to camp or paying for Sunday School materials.
I don’t want this to sound like a gimmick or some slick way to raise money from gullible elderly church members. That is not what a Charitable Remainder Trust is. The Charitable Remainder Trust can be an wonderful part of a person’s retirement/estate plan. What makes it so wonderful? Here’s a list:
Guaranteed Income for Life: This will supplement social security and pension income. Rule of thumb is that you will receive 5% back on any assets you entrust…for life…and it will likely grow.
Protection of Assets: No one wants to see the financial assets that they accumulate during their lifetime dwindle away paying for nursing home care. These Trusts are irrevocable which protects them legally.
Lowering your Taxes: I don’t understand all this part, but it’s pretty clear that you will be lowering your tax bill considerably.
Supporting the Charities you Love: Many people fail to do any estate planning. After you pass, the assets of the Trust will go to benefit the charities of your choice.
Hopefully this is timely and helpful for any church struggling financially. Here’s the bad news: There is no silver bullet when it comes to raising up generous givers. If your church is struggling financially, there is no quick fix. There is a strong spiritual element connected to our relationship with money…and practically nothing happens quickly in the spiritual world. Even when you first came to faith, for how many years were people praying for you and planting seeds in your life?
But that doesn’t mean you shouldn’t do anything…just don’t expect an immediate turnaround. First of all, there needs to be the right conditions within the church to grow generous givers. Has leadership proven themselves trustworthy? Do they have a clear idea of where the church needs to go (i.e. their mission)?
The next thing is to give attention to these six areas: 1)Engaging; 2)Inspiring; 3)Teaching; 4)Asking; 5)Thanking; and 6)Reporting. There’s no fixed schedule. All areas need attention…especially the areas where you are weakest. In this webinar, Sheri Meister and I share the principles of each area as well as some practical steps the church can take.
Rebecca Trefz and I did this video some time ago. While a lot of church leaders want to know where apportionments go, this video actually gets at the heart of what apportionment giving is all about. I figure that folks could just watch the budget video or read the budget if they want to know where the money goes. I think there are some more fundamental questions that need to be answered first though. If you want to have a simple video to share with your congregation or leadership, this is for you.
What’s the worst thing that could happen if I don’t keep the IRS in mind when issuing Giving Statements or something to acknowledge gifts? Well…the IRS could disallow the donors charitable tax deduction which would lead them to have to pay more taxes. This would probably lead to a ticked off donor who will likely share this with other donors. You’ve basically discouraged anyone from wanting to give too generously to your church.
It really isn’t that hard to keep the IRS happy. All you need to do is properly document the gift (what did they give, who did they give it too, when did they give it) and include a simple statement that the donor didn’t receive any goods or services in exchange for the gift except for intangible religious benefits. You can sneak these element in and still have a nice “Thank you.”
I decided that every tenth post/video would be on Stewardship Education. I realize that the title of this post and the picture probably don’t make you think, “I bet this an educational video.” One thing I run into over and over again is pastors and church leaders being afraid of preaching on money, giving, and stewardship. It’s almost always churches that struggle financially that are afraid to talk about giving…because it might hurt their finances. You never hear this from a church that is financially strong. They don’t see the connection between their financial struggles and their avoidance of teaching on money and giving.
I’m convinced that these leaders, while trying not to appear greedy or money grubbing, are robbing their church. They are robbing their churches in two ways: 1)their church will be robbed of the resources to better carry out the mission; and 2)their people will be robbed of much joy and closeness to Jesus that comes from being able to trust the Lord with your finances. This video delves into it more: