For all the good churches do, most of the funding for their ministries come from pledges. What if every church was endowed? Here are some suggestions you can employ in your church to build a bigger endowment church fund.
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.
Any church that is not building the church fund through endowments might do well to consider this option very carefully.
I just started attending a church that recently celebrated its 50th anniversary. It is a small church of only about 350 members. They finished 2008 with a deficit of $33,000. After fifty years there is no endowed church fund.
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.
Financing ministries from the interest on endowment funds goes a long way toward shielding the good a church can do from economic downturns.
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.
2. Help donors solve a problem.
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.
Most of these problems involve tax savings. For example, how to sell a business without paying a capital gains tax and how to pass on wealth to the next generation without first giving half of the person's estate to the government are typical examples. Yes, I know, the tax aspect of major gifts is not the primary reason gifts are made. Most of the time, it's not even on a person's list. Nevertheless, if you can show someone who is interested in your cause how to make a gift that satisfies his or her interest and support of your mission and help them solve a problem at the same time, your chances of getting the gift (maybe even a larger one) and adding to the balance of your church fund is enhanced.
3. Support your fundraising effort with case study information.
Many of the people who could be major donors to church funds don't know how to plan approaches to giving that both are legal and provide incentives to make large gifts to the church fund.
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.
By explaining the laws and offering case study examples of how other people have solved similar problems, I believe fundraisers can easily help people see how their tax problems can be eliminated by opening a conversation about making a sizeable contribution to a church fund that will pay interest and provide the principle of the gift to the church.
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.
Any church that is not building the church fund through endowments might do well to consider this option very carefully.
I just started attending a church that recently celebrated its 50th anniversary. It is a small church of only about 350 members. They finished 2008 with a deficit of $33,000. After fifty years there is no endowed church fund.
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.
Financing ministries from the interest on endowment funds goes a long way toward shielding the good a church can do from economic downturns.
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.
2. Help donors solve a problem.
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.
Most of these problems involve tax savings. For example, how to sell a business without paying a capital gains tax and how to pass on wealth to the next generation without first giving half of the person's estate to the government are typical examples. Yes, I know, the tax aspect of major gifts is not the primary reason gifts are made. Most of the time, it's not even on a person's list. Nevertheless, if you can show someone who is interested in your cause how to make a gift that satisfies his or her interest and support of your mission and help them solve a problem at the same time, your chances of getting the gift (maybe even a larger one) and adding to the balance of your church fund is enhanced.
3. Support your fundraising effort with case study information.
Many of the people who could be major donors to church funds don't know how to plan approaches to giving that both are legal and provide incentives to make large gifts to the church fund.
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.
By explaining the laws and offering case study examples of how other people have solved similar problems, I believe fundraisers can easily help people see how their tax problems can be eliminated by opening a conversation about making a sizeable contribution to a church fund that will pay interest and provide the principle of the gift to the church.
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 series which advances techniques 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.
