Churches do a tremendous amount of good for their members and for others. But most of the funding for their ministries comes from contributions and pledges. Wouldn't it be wonderful if every church was building an endowed church fund for each of their major expenditures? You can actually build an endowed church fund in just three easy steps.
All 88 keys of the Phoenix Symphonys Steinway piano, for example, were endowed. The endowment was sold for $5,000 per key. At Penn State, there is an endowment for every position on the football team.
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.
This is not unusual. Because of the current economic climate, many churches took a big hit the fourth quarter of 2008. In a December 1, 2008 article, The Barna Group predicted that churches would receive $3 billion to $5 billion less than expected the last quarter of 2008. If a church has any amount in a church fund, the balance is likely to decrease, not build, until the economy turns around.
Some churches, however, have a history of drawing on interest earned by a church fund to finance ministries during tough times.
Some churches have done a good job building their church fund. I would refer you to "Financing American Religion" by Mark Chaves and Sharon L. Miller. However, every church can do more. Here are several of my opinions about some of the steps needed to build a church's endowment fund.
1. Focus on the people who give the most.
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.
2. Solve a problem.
I am convinced that all giving to church funds is faith-based and motivated by altruism. But I also know that large gifts are often "sacrificial giving" for people. If you can show a potential donor how to solve their own financial needs or problems with a gift to the church, your fundraising efforts will be more successful.
I'm very clear that tax breaks are not the primary reasons people give money to a church fund. In most cases, the tax issues never enter the mind of the giver. But if you can show someone who is interested in your ministry how to make a gift that satisfies the original goal and helps them solve a financial issue or tax problem at the same time, you dramatically increase both your chances of getting the gift and your chances of getting a larger gift for the church fund.
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 provide examples of what others have done to solve specific problems, people can easily see if the solution might work for them. This is the first step in opening up a dialogue about the possibility of a major gift and building a church fund that will ultimately pay for the church's ministries from the interest on investments. - 29971
All 88 keys of the Phoenix Symphonys Steinway piano, for example, were endowed. The endowment was sold for $5,000 per key. At Penn State, there is an endowment for every position on the football team.
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.
This is not unusual. Because of the current economic climate, many churches took a big hit the fourth quarter of 2008. In a December 1, 2008 article, The Barna Group predicted that churches would receive $3 billion to $5 billion less than expected the last quarter of 2008. If a church has any amount in a church fund, the balance is likely to decrease, not build, until the economy turns around.
Some churches, however, have a history of drawing on interest earned by a church fund to finance ministries during tough times.
Some churches have done a good job building their church fund. I would refer you to "Financing American Religion" by Mark Chaves and Sharon L. Miller. However, every church can do more. Here are several of my opinions about some of the steps needed to build a church's endowment fund.
1. Focus on the people who give the most.
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.
2. Solve a problem.
I am convinced that all giving to church funds is faith-based and motivated by altruism. But I also know that large gifts are often "sacrificial giving" for people. If you can show a potential donor how to solve their own financial needs or problems with a gift to the church, your fundraising efforts will be more successful.
I'm very clear that tax breaks are not the primary reasons people give money to a church fund. In most cases, the tax issues never enter the mind of the giver. But if you can show someone who is interested in your ministry how to make a gift that satisfies the original goal and helps them solve a financial issue or tax problem at the same time, you dramatically increase both your chances of getting the gift and your chances of getting a larger gift for the church fund.
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 provide examples of what others have done to solve specific problems, people can easily see if the solution might work for them. This is the first step in opening up a dialogue about the possibility of a major gift and building a church fund that will ultimately pay for the church's ministries from the interest on investments. - 29971
About the Author:
Robert D. Cavanaugh, CLU is a 39-year veteran of the life insurance, financial and estate planning industry. He publishes The Smart Giver, a planned giving educational program which teaches strategies to increase income and reduce taxes while simultaneously helping churches and non-profits. Additional information about how to build a church fund can be found on his blog.
