I get all the effort made to engage donors … I really do! That attention and work is important for the success of your mission and ministry. People might be moved to donate a little something for a variety of reasons. Baby steps, right? Grow people where you can and as widely as you can. But, how do you develop stewards?
That goal is not accomplished with a fund-raising or a data-mining strategy. Please, I am not picking on good, intentional, data-smart, fundraising strategies … great stuff that everyone should be doing to open the doors. But how do people move from donor-ism to stewardship?
Stewardship is a leap of faith, not a next step in giving. Stewardship is a life change, not a habit adjustment. Stewardship is a joyful expression, not a dutiful chore. Stewardship is about the possibilities and potential in the world beyond myself. Stewardship is a life-altering choice that changes perspective, priorities, and my fundamental definition of who I am. So, how do you invite people to that place?
The story of Zaccheus (Luke 19:1-10) speaks volumes here. Find a bible and read the short story right now. Besides being a “wee little man,” Zaccheus was a sinner (welcome to the club) and, of all god-awful things, a political tool tax collector. But he was curious about Jesus. Jesus noticed Zaccheus and invited himself to dinner at Zaccheus’s home. We do not know what they did or what they talked about (it is a very short story). We do know that Zaccheus decided to radically change his life in some very specific and very real financial ways. Jesus had something to say about the radical changes Zaccheus made.
Salvation – that is a really big deal (which stewardship follows as an expression)! Perhaps we have been missing a step in our stewardship strategies. Perhaps we should also be focusing on how we provide the contexts and experiences leading people to exclaim that salvation has come to this house this day!
Not just to meet your church or your people or your programs or your fellowship, but to actually meet Jesus? I am not trying to be terribly trite or ridiculously religious here; but I am asking an important question – how do you invite people to meet Jesus in your church?
Where does that happen in your church? In intentional small groups? Through hands-on mission opportunities? In deep relationships? In being the very presence and body of Christ? Probably not just in fantastic stewardship campaigns, awesome sermons, and cool programs.
I can help you raise more money. I can help you clarify your mission and call to action. I can help you to build trust and confidence. I can help you be more successful in all of these areas. All worthwhile stuff! But I cannot transform your life and make you a Steward. I can not bring salvation to your house. Only a real encounter with Jesus can do that. So, again, how are you (and we) helping your people to meet Jesus?
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.
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.
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.
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.
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.
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.
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…
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.
The headlines suggest impending doom for churches:
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!
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.
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.
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!