Giving

Have questions about encouraging giving in your church, electronic giving, timing of giving, or other giving-related concerns. These articles by Horizons Stewardship should help.

How to Make Sure Your First-Time Donors Repeat Their Gift

The Law of Inertia states an object at rest tends to stay at rest unless acted on by an external force. The same tends to be true about church donors. Church members who do not contribute are challenging to inspire. When someone donates for the first-time, it is cause... read more

4 Reasons People Choose Not to Give and What to Do About It

“I have some good news and bad news.  The good news is the church has enough money to pay its bills.  The bad news is that money is still in people’s pockets.” This preacher joke isn’t new, and neither is its message. Not many people in your church are giving.... read more

How to Conquer Your Fear of the Ask

Most people are downright terrified to ask other people for money. Asking for money seems intrusive, awkward, impolite and uncomfortable. Asking for money can be intimidating, but changing your approach can make it easier—and even fun!   Here are 5 tips for... read more

Facing the Truth about Poor Giving and its Devastating Consequences

When confronted with poor giving and lackluster stewardship, church leaders often try to justify their situation rather than face the truth. Of course, it is easier to justify poor giving than to address it. However, the long-term consequences of believing the excuses... read more

Instead of Despair, Make Giving About God

At some point during the year, despair sets in. Giving is falling behind and expenses are exceeding budget. If something isn’t done soon, next year’s programs will have to be cut. The ship is sinking quickly. But before despair sets in, consider a... read more

Is Fear Impacting Your Ability to Make Giving Easy?

Have you observed how church giving has changed over the past decade? Have you noticed the offering plate makes its quick trip through the congregation and comes back mostly empty? Times have changed. How people donate has changed. Churches must adapt and make giving... read more

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Increase Giving: Begin with Powerful Storytelling

Whether in a capital campaign, annual giving, or planned giving program, generous giving happens when people believe your organization is changing people’s lives. Sadly, most churches try to grow giving by presenting data, finance reports, and line item budgets. This approach doesn’t work! Rather than share facts and figures, tell stories of how you are making an impact.

 

How does storytelling help grow giving?

 

The pastor called as I was getting off the plane. She said, “Scott, I’m being moved.” After a moment of stunned silence I asked, “When?” Her response shocked, surprised and even angered me. This popular pastor was being moved in the middle of the public phase of a capital campaign for debt. The debt we were funding was the result of building a multi-million dollar youth and community center.

Later that day I met with the capital campaign leadership team. They were grieving and I had little hope of a productive meeting. As I stood there pondering what I might say, the youth pastor came up to me and said, “Remember you asked for some video testimony from our youth? Well, I have a video if you’d like to show it.”

The youth pastor hit “play” and a handsome young man, about 14 or 15 years old, appeared on screen and told his story. He had been physically and sexually abused as a child. At the age of 12 he began drinking and then attempted suicide.

He said, “Life was not worth living and then someone invited me to youth group. It was the first time I knew I someone cared.” Then, looking into the camera, he said, “Thank you. Life is worth living. You saved my life.” With his permission, this video became the centerpiece of the campaign.

In the midst of grieving their pastor’s transfer, the young man reminded us of the importance of their ministry. The church’s generosity was having a life-changing impact. As a result, despite the pastor preparing to leave, the church raised more money in the second campaign than in the first.

The reason for such generous giving was powerful storytelling.

 

To inspire generous giving, donors need to hear stories of transformation. Financial reports fall on deaf ears and do nothing to inspire giving. In making the case for debt reduction, we might have said,

“We spent X dollars and we now have X dollars in debt with an interest rate of 6%. If we eliminate the debt we will save X dollars.” Then we would probably add, “Since building our youth and community center, we’ve grown our youth group from X to Y.” Yes, the facts are important.

Facts don’t inspire generosity. Stories of impact grow giving.

 

For example, after V.B.S., instead of reporting you had 25 kids and 15 volunteers, tell their stories. Ask parents to talk about the impact V.B.S. had on them and their children.  Better yet, invite a child to talk about what V.B.S. meant to him or her.  Ask volunteers to talk about the joy of serving and how they saw God at work.

How can you begin inspiring generosity with powerful storytelling? Here are some ideas:

 

  1. Identify stories at staff meetings, leadership meetings, and program meetings. Be prepared for silence and blank stares. However, if you persist, sharing stories will eventually become the best part of your meetings.
  2. Regularly ask people to tell stories in worship—send out video links, always with permission.
  3. Solicit stories after significant events like V.B.S, mission trips, Bible Studies, youth retreats, etc.
  4. Any communication, newsletter or email blast should include at least one story.
  5. Personal giving statements, and other communication about finances, should include stories of how the generosity of the church members is transforming lives. Connect money with the church’s ability to do ministry. Tell people how their generosity is impacting people every day.
  6. When you present the budget, resist reporting data only. Through powerful storytelling, you will transform your budget into a compelling tale of God’s work.

 

When you begin asking people to tell their stories, some people will argue they don’t have a story. However, each of us has a story to tell. You can help people get in touch with their stories.

Ask simple, yet thought-provoking questions such as…

 

What difference has the church made in my life?

Because of my relationship to God, how is my life different?

How is my life different because I…

  • went on a mission trip?
  • teach Sunday School?
  • attend youth group?
  • participated in a weekend retreat?
  • became more generous?
  • started to tithe?
  • attended a Bible study?

Do you want to inspire generosity and increase giving?

Instead of reporting facts and figures — tell stories. When the focus is on powerful storytelling, meetings become more enjoyable and newsletters, email blasts and financial statements come alive. In addition, you and your people will know that all the time, energy and yes, all the money, is in fact making a difference. And that makes it all worthwhile.

For more insights on powerful storytelling go here and here.

 

Scott McKenzie is a Partner and Senior Vice President with Horizons. Scott is a pastor, fund raising consultant, generosity coach and story teller.

How to Increase Your Church’s Giving in Spite of the New Tax Law

The headlines suggest impending doom for churches:

“Charitable Donations Are Tough to Get Under the New Tax Law”
“Charities Brace for Giving Plunge in Wake of New Tax Law”
“Charities to Lose Billions in Donations Due to New Tax Law”

This is not the first time that changes in tax laws have resulted in such dire predictions. In 1981, the New York Times published this headline: “New Tax Law is Said to Endanger Billions of Gifts to Private Groups.” Fortunately for the nonprofit sector, that predication was wrong: gifts to charity over the next three years actually increased!

What impact will the new tax law have on charitable giving?

The long-term impact on philanthropy of the Tax Cuts and Jobs Act of 2017 (TCJA) remains unclear.  However, a strategic giving summit, led by Robert Sharpe of the Sharpe Group, highlighted new opportunities for donors made possible by the new law. Also, Sharpe suggested several strategies to grow giving to compensate for changes in the law. Here is an overview of Sharpe’s perspective on the law and the most effective ways to give going forward.

First, the reality. The new law was the most comprehensive revision in the tax code in over 30 years. The changes included a doubling of the standard deduction and a reduction in the mortgage interest and state/local tax deductions. Also, the cap on cash gifts was raised from 50% of Adjusted Gross Income (AGI) to 60%. Limits on deductions for high income donors were suspended until 2026 and home equity interest deductions were eliminated. As a result, it is expected that half of the people who itemized their deductions in 2017 will not itemize in 2018. However, high income donors who will continue to itemize may find expanded opportunities and incentives for larger charitable gifts.

So, how can churches guide donors? What can be done to salvage the tax benefits for those who no longer itemize and promote new opportunities for those who do?

Sharpe suggested three strategies: bunching, boosting and bypassing.

Bunching refers to donors making charitable contributions every other year. The every-other-year strategy enables donors to bunch two years of giving into one allowing them to itemize in the year their gifts were given. As an alternative, donors can contribute to a donor-advised fund (DAF) every other year and give ½ to the church each year. This strategy helps the church’s cash flow but can skew income if the church is not aware of the donor’s intentions. Some of your donors may have done this last December. You should review your 2017/2018 giving, especially among your larger donors, to see if they may be using a bunching strategy already.

Boosting is most applicable to capital campaigns. Some high capacity donors may choose to make asset gifts that boost them to itemizer status for a number of years. Donors choosing this option lock in current market values, bypass capital gains taxes, and save a substantial amount on state and federal taxes. Boosting makes sense for donors who have highly appreciated assets that pay minimal dividends and who want to make a larger gift to a capital campaign.

Bypassing is the third way to take advantage of the changes in the tax law. Donors can enjoy a “deduction equivalent” by making gifts that bypass their income stream. The most common form of bypassing is the IRA rollover provision in the tax code. People age 70 ½ and older who have IRAs are required to take a yearly minimum distribution (RMD) that is taxable as ordinary income. These people are now able to make a yearly gift of up to $100,000 directly from their IRAs to churches and charities. This gift counts as their RMD, avoids the taxes, and reduces their AGI on which many other deductions are based. Although the IRA rollover provision predates the new tax law, its importance has been amplified by recent changes and by the increasing number of Boomers becoming eligible.

Finally, Estate and Gift Tax laws remain essentially unchanged. However, by doubling the exemption amount ($11.18 million per individual and $22.36 million for married couples in 2018) and indexing it for inflation, the TCJA eliminated federal estate taxes for 99.9% of Americans. For some perspective on the scope of this change, the exemption was $600,000 as recently as 2000. As a result, it is likely more discretionary assets will remain in the typical estate. Surveys show that donors with such increased assets probably will split the tax savings between family and charity.

So how should churches respond to these changes? Here are some suggestions:

  1. Educate yourself, your staff, and donors about the changes that impact charitable gifts. The TCJA left the charitable deduction intact while repealing and limiting many others. In fact, some benefits were actually expanded! Many denominational and community foundations have staff whose primary job is providing advice and resources for their constituents. Take advantage of these low-cost (or free) resources. The Sharpe Group has excellent white papers and educational materials, too. “Talk to your financial advisors” should be your mantra in 2018 and 2019!

 

  1. Promote the benefits of gifts of appreciated securities and other non-cash assets, such as IRA rollovers. Because about 8,000 Baby Boomers turn 70 ½ every day, appreciated asset gifts will be increasingly important in funding your ministry. Remember the IRA rollover provision allows eligible donors to enjoy the tax benefits of their gifts regardless of whether they itemize. However, your church will not receive asset gifts unless you make a conscious effort to educate members about these opportunities. Remember to tell donors how these gifts make a substantial difference to your mission and ministry. Colleges and nonprofits are making the case for why they should receive these gifts. Be sure you are doing the same.

 

  1. Inform your donors that the federal estate and gift tax has, for all practicable purposes, been eliminated. Many donors created estate plans based on the old tax laws. Those plans usually included insurance or assets in trusts to pay the necessary taxes. Any bequests to family and charities were made from the remaining assets. The higher estate tax exemption means donors can leave more to charity and increase the amount distributed to family members! Position your church to be the recipient of these “extra savings.” Once again, take advantage of the resources available through denominational and community foundations.

The new tax law does not mean your giving will be negatively impacted. But growing giving requires being informed about the best ways to give.

Too many church leaders are operating under the assumption that the TCJA will have a negative impact on giving. Robert Sharpe reminded us that the “sky has never fallen” except during major economic downturns. It is clear the opportunities made possible by the new law outweigh the threats created by it. Churches need to tell that good news in order to enhance their ability to proclaim THE Good News!

Tom Norwood, D.Min, CFRE is a Senior Vice President with Horizons. He is an ordained Presbyterian minister who holds degrees from Davidson College, Columbia Theological Seminary, and Yale University. Tom is a regular speaker at regional and national fundraising and stewardship conferences.

Is your Generosity Approach Helping or Hurting your Church?

Register now for a free webinar!

The One. The Few. The Many.

 

Join two of the most knowledgeable leaders in church stewardship, Joel Mikell (Horizons Stewardship) and Doug Turner (Culture of Ready) for a free webinar entitled, The One. The Few. The Many. On Thursday, November 8, 2018 at 11AM ET/8AM PT, these industry experts will discuss how a one-size-fits-all approach to generosity may be negatively impacting your church. The webinar will address how to develop distinct approaches for three important groups within every church.

The One: a small percentage of individuals who process giving in a highly relational setting. You’ll learn strategies for developing a disciipleship approach for those who have capacity to become the financial leaders in your church.

The Few: a core group that tends to live out their faith in community. You will learn ways to create safe spaces for “the few” to take risks and grow in the grace of giving.

The Many: the largest group in any church that contributes very little financial income. You will learn how to engage this group and help them engage in the generosity journey.

Click here to register now for this free webinar produced by Church Executive Magazine.

 

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