Articles

From his column God, Government, and Me—Money in the Church

god-government-me-03-14-1Many churches request gifts for specific purposes. And, many donors respond to these encouragements to give. Examples of gifts for specific purposes are funds raised for building projects, career missionary support, short-term mission trips, benevolence, and much more.

Do donors really care if the church follows through with donor intent? Most donors do! And, churches must care!

For integrity purposes, let’s use the following definitions: a specific purpose gift is one intended to support a purpose more specific than the general purpose(s) of the church. All other gifts support the church’s general purpose(s).

General Purpose (Undesignated) Gifts

The purpose of the church is to glorify God and reach the community for Christ. When a donor places a check in the offering plate, makes a gift at a kiosk in the foyer, texts a gift or makes an electronic funds transfer to the church’s website and does not specify a project, it is generally understood the gift is for the general purposes of the church, i.e., a general purpose (undesignated) gift.

Specific Purpose (Designated) Gifts

When a gift is made and the donor indicates it is for a certain church department, a missions project, the building program, or another specific purpose, it is a specific purpose (designated) gift.

How does a church model unmistakable integrity regarding donor intent? It is a matter of following the five commandments of donor intent:

1.   A church should be very intentional in communicating giving opportunities, so it is clear to potential donors whether general purpose or specific purpose gifts are being sought.

Before a church raises money, it starts with an idea—a concept. This is true regardless of whether the giving opportunity is communicated by one of the pastors from the church platform, or via email, website, radio, television, one-on-one, or another form of communication.

From the point when the resource-raising opportunity is conceived, the church should be clear in its intent to request gifts for general purposes or for specific purposes. This is vital because clarity as to the type of funds requested should drive the narrative and donor response options, how the funds will be used, and identification of gifts in the accounting records.

2.   A church should communicate the opportunity to give with such specific clarity that a prospective donor will easily recognize the solicitation for what it is—an appeal for either a general purpose or a specific purpose gift.

An appeal for resources can be crystal clear as a cloudless sky, as murky as a foggy night, or somewhere in between. A prospective donor should be able to read an appeal on a church’s website, listen to a verbal request for gifts, or receive other resource raising communications, and readily understand how gifts will be used in response to the appeal.

3.   A church should use specific purpose gifts in consistency with the donor’s intent.

If the church says it will spend a specific purpose gift for “A,” it should spend it for “A”—it’s just that simple. While there may be exceptions based on explanations provided to donors at the time of the gift or, perhaps, subsequently, the general rule is: Whatever project for which the funds are raised is the beneficiary.

4.   A church should segregate the revenue and expenses related to each type of specific purpose gift in accounting records to document compliance with donor intent.

Separate revenue and expense accounts should be established by specific purpose gifts. Without such accounting treatment, appropriate data will not be readily available for financial statement reporting purposes and for reporting to donors who provided the gifts.

5.   A church should not use a policy or board decision as the basis to override a donor’s intent.

Occasionally, a church accepts a specific purpose gift only to decide that the money can be better spent in another area. This is not acceptable, even if the governing body or board votes to approve it.

Fiduciary authority does not relieve a church from spending specific purpose gifts as the donor intended. The church board has the final fiduciary authority over the use of all resources; however, fiduciary authority does not compete with donor intent. Rather, it is complimentary. It isn’t either/or—it is both!

Complying with donor intent is one of the key ways a church gives evidence of unmistakable integrity. Donors are watching and making giving decisions based on whether integrity is being modeled. More importantly, God is watching for unmistakable integrity. We must never forsake our responsibility to be accountable for how we steward the resources He has entrusted to us.

Dan Busby is president of the Evangelical Council for Financial Accountability (ECFA)—an accreditation organization that sets standards for governance, financial management, and fundraising/stewardship for churches and other nonprofits across the country.

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