Most churches rely upon tithes and contributions from their members to pay for their ministries. Most churches also pay for capital improvements and new building in the same way. Churches that rely only on contributions to build their church fund are missing out on a major opportunity. Most of these churches do not understand that they only need to know three tips that will help them build a church fund.
All 88 keys of the Phoenix Symphony's Steinway piano are endowed. They went for $5,000 a key. Penn State has every position on its football team endowed.
If your church is not creating an endowed church fund for major goals, maybe they should be.
The church I just started to attend just celebrated its 50th anniversary. It's not a big church " about 350 members. It finished 2008 $33,000 in the red. In fifty years, they have a church fund balance of zero.
A financial shortfall is not surprising for any church during the last quarter of 2008 when the economy entered a recession. In December 2008, the Barna Group predicted that churches would experience giving that would be $3 billion to $5 billion less than anticipated for the last quarter of the year. They also predicted that churches that have church funds will likely see the balances fall until the recession ends.
Some churches, however, have a history of drawing on interest earned by a church fund to finance ministries during tough times.
1. Focus on the big givers.
There is something called an 80/20 rule which is applied to most things. This says that 80% of the results are produced by 20% of the people or the effort. I suspect you have heard this rule applied to something in your lifetime. But when it comes to building church funds, it is more like 98/2 " 98% of the funding comes from only 2% of the congregation. If you need to raise money for an endowed church fund, concentrate on the 2% of the congregation who are the big givers.
Almost everyone has heard of the 80/20 rule, which states that 80% of the results or outcome will be the result of 20% of the contribution or effort expended. This rule applies to many things. But when it comes to creating and growing a church fund the rule is more like 98/2. Believe it or not, 98% of the money for a church fund comes from just 2% of the congregation. To raise money, focus on the 2% to grow your church fund.
Although we want to believe that all giving to the church is entirely faith-based or altruistic, you should also consider that if you can show a donor how to solve a personal financial problem or need and endow a church fund you will be more successful.
Most of the problems that can be solved with a large donation to a church fund are related to tax savings. One such typical example would be knowing how to sell a business without paying a capital gains tax or how to pass wealth to the next generation without first paying half of the estate to the government in inheritance tax.
A very large number of problems that can be solved with a sizeable donation to a church fund are related to issues of taxation. For example, a church member might need to know how to sell a business without paying a capital gains tax. Another member might want to know how to pass wealth to the next generation without paying an inheritance tax of up to 50% of the inheritance. I know most people don't make contributions to church funds for tax breaks. But consider that showing someone who is interested in the church's ministry how to make a significant gift to the church and solve a financial problem at the same time could increase your success in getting the gift. It might even mean the church will get a larger gift.
3. Provide case study information.
I believe that many potential major donors do not know about the planning techniques the law allows that lead to a major gift.
During my 39 years in the financial and estate planning arena, I have spoken with numerous business owners who didn't even know they had a problem. No one had ever pointed out to them how much of the fruits of their labors could be lost in taxes. I think church fundraisers also suffer from the same lack of information, as do church members.
If you will provide explanations of the laws and examples of how others have solved specific problems through church fund endowments, I am convinced that people will easily see how their financial and tax situation could also be improved. This is the first step in starting a conversation about the possibility of making a major contribution to a church fund that will pay for the churchs ministries with the interest on the investments.
All 88 keys of the Phoenix Symphony's Steinway piano are endowed. They went for $5,000 a key. Penn State has every position on its football team endowed.
If your church is not creating an endowed church fund for major goals, maybe they should be.
The church I just started to attend just celebrated its 50th anniversary. It's not a big church " about 350 members. It finished 2008 $33,000 in the red. In fifty years, they have a church fund balance of zero.
A financial shortfall is not surprising for any church during the last quarter of 2008 when the economy entered a recession. In December 2008, the Barna Group predicted that churches would experience giving that would be $3 billion to $5 billion less than anticipated for the last quarter of the year. They also predicted that churches that have church funds will likely see the balances fall until the recession ends.
Some churches, however, have a history of drawing on interest earned by a church fund to finance ministries during tough times.
1. Focus on the big givers.
There is something called an 80/20 rule which is applied to most things. This says that 80% of the results are produced by 20% of the people or the effort. I suspect you have heard this rule applied to something in your lifetime. But when it comes to building church funds, it is more like 98/2 " 98% of the funding comes from only 2% of the congregation. If you need to raise money for an endowed church fund, concentrate on the 2% of the congregation who are the big givers.
Almost everyone has heard of the 80/20 rule, which states that 80% of the results or outcome will be the result of 20% of the contribution or effort expended. This rule applies to many things. But when it comes to creating and growing a church fund the rule is more like 98/2. Believe it or not, 98% of the money for a church fund comes from just 2% of the congregation. To raise money, focus on the 2% to grow your church fund.
Although we want to believe that all giving to the church is entirely faith-based or altruistic, you should also consider that if you can show a donor how to solve a personal financial problem or need and endow a church fund you will be more successful.
Most of the problems that can be solved with a large donation to a church fund are related to tax savings. One such typical example would be knowing how to sell a business without paying a capital gains tax or how to pass wealth to the next generation without first paying half of the estate to the government in inheritance tax.
A very large number of problems that can be solved with a sizeable donation to a church fund are related to issues of taxation. For example, a church member might need to know how to sell a business without paying a capital gains tax. Another member might want to know how to pass wealth to the next generation without paying an inheritance tax of up to 50% of the inheritance. I know most people don't make contributions to church funds for tax breaks. But consider that showing someone who is interested in the church's ministry how to make a significant gift to the church and solve a financial problem at the same time could increase your success in getting the gift. It might even mean the church will get a larger gift.
3. Provide case study information.
I believe that many potential major donors do not know about the planning techniques the law allows that lead to a major gift.
During my 39 years in the financial and estate planning arena, I have spoken with numerous business owners who didn't even know they had a problem. No one had ever pointed out to them how much of the fruits of their labors could be lost in taxes. I think church fundraisers also suffer from the same lack of information, as do church members.
If you will provide explanations of the laws and examples of how others have solved specific problems through church fund endowments, I am convinced that people will easily see how their financial and tax situation could also be improved. This is the first step in starting a conversation about the possibility of making a major contribution to a church fund that will pay for the churchs ministries with the interest on the investments.
About the Author:
Robert D. Cavanaugh, CLU is a 39-year veteran of the life insurance, financial and estate planning industry. He is the publisher of The Smart Giver, a planned giving educational series which advances techniques to increase income and reduce taxes while simultaneously helping churches and non-profits. More information about how to build a church fund can be found on his blog.
