{"id":2491,"date":"2018-07-21T14:11:53","date_gmt":"2018-07-21T14:11:53","guid":{"rendered":"https:\/\/centerforfaithandgiving.org\/?p=2491"},"modified":"2018-05-21T14:52:55","modified_gmt":"2018-05-21T14:52:55","slug":"the-importance-of-a-gifts-policy","status":"publish","type":"post","link":"https:\/\/centerforfaithandgiving.org\/2018\/07\/the-importance-of-a-gifts-policy\/","title":{"rendered":"The Importance of a Gifts Policy"},"content":{"rendered":"

The Importance of a Gifts Policy<\/strong><\/p>\n

Churches and charities have one major thing in common: they are dependent on the generosity of others (expressed through gifts to the organization) to have the financial resources they need to perform their mission. For this reason, congregations need a policy about gifts that specifies how gifts may be received, refused, and\/or retired at the end of their useful life.<\/p>\n

What does a gifts policy do?<\/strong><\/p>\n

A good gifts policy will define a process as to how a gift is received and recorded by the church, and how it is to be receipted to the donor (along with assuring that a thank you has been given to the donor to demonstrate our gratitude). A gifts policy also outlines who is responsible for each step of the process, what do to with certain types of gifts (see \u201cstocks, bonds and real property\u201d below), and will establish a review process for designated (restricted) gifts, as well as for gifts that come from sources not within the established donor base.<\/p>\n

Church leaders might imagine wanting to accept all gifts that come to your church. Fair enough, but there may be times when refusing a gift is in the best interest of the congregation<\/strong>. Is the gift a donor directed and designated\/restricted in some way? Is that designation in keeping with the goals, values, and best interests of the church? What about the source of the income?\u00a0 How was it derived? Is the donor\u2019s mission\/values consistent with your own? Does the gift (and\/or its conditions) create a conflict of interest? What are the \u201coptics\u201d of accepting the gift?\u00a0 For example, would a gift derived from so called \u201cPay Day Loans\u201d earnings be acceptable with your own stated investment policy or your public witness regarding the exploitation of the poor?<\/p>\n

Teamwork is Key<\/strong><\/p>\n

Having a team in place to review gifts can give you a quick and honest evaluation as to whether the gift should ultimately be accepted. The team, in some circumstances, might offer recommendations or suggest alternatives to the donor as to how to improve conditions so that a gift may be received and best utilized. You want to provide the benefit of the doubt to those wishing to be generous with you, so you accept as an operating premise that all donors truly believe in your mission. The review team is charged with helping the donor express his or her passion in ways that benefit both the giver and the organization. In the end, some gifts may simply not be a match, and with this process you have a polite, but firm and carefully reasoned way to say, \u201cno thank you.\u201d<\/p>\n

Types of Gifts <\/strong><\/p>\n

Gifts may come in the form of cash, gifts \u201cin-kind,\u201d real property, or stocks and securities. They might be given by the donor \u201cin person,\u201d they may come from an estate (testamentary gift), they can come from for-profit corporations, granting agencies, community foundations, and a host of other sources. The first question regarding any gift that is not cash should be, \u201cDoes the cost to accept the gift and convert it to cash exceed the realized value of the gift itself?\u201d Some gifts may involve attorney costs, brokerage fees, or require appraisals. A gift of land might be tied up in ligation, have liens against it, or (worst case scenario) be contaminated and require costly mitigation (a cost that the organization would be responsible for once it accepted the gift!). Before you accept a deed, you had best allow your Gifts Review Committee to investigate. You don\u2019t want to become a disposal site for expensive \u201cwhite elephant\u201d gifts that cost more to get rid of than they are worth.<\/p>\n

If a gift of stock or financial security is received, the immediate question becomes, \u201cShould we sell it or should we keep it and hope that it increases in value?\u201d Unless directed by the donor to do otherwise, my recommendation is always to sell the financial instrument immediately<\/em>and to receipt the donor for the full value of the gift on the day it was sold. (Yes, the church absorbs the cost of commissions.) Doing this allows the donor to receive the full potential tax related benefit of their gift at the time it was given. It further prevents the congregation from second guessing if they \u201chold\u201d the investment property as to when it should be\u2014or should have been\u2014converted to achieve its maximum value.<\/p>\n

Designating the Gift <\/strong><\/p>\n

The organization now has the full value of the gift (after expenses) to employ the gift as the donor intended. If there is no designation and the organization is not required to take certain actions (such as the placement of undesignated gifts into permanent funds), the gift might be prudently re-invested for income earnings and available to be employed at a future date when there is established need to utilize the principle gift. Even if not directed to place undesignated gifts into permanent funds, a church is doing its due diligence to consider such an act \u2013 both to preserve the donor\u2019s legacy and the long-term impact of the gift for the sustaining of the congregation\u2019s mission. Such a policy would likely be tied to the congregation\u2019s endowment\/memorial fund.<\/p>\n

Endowment policies are related to Gifts Policies, though they are usually a separate set of rules\/guidelines meant to provide for the governance of an Endowment Committee (or Trustees) and to guide the practices of investment, expenditure, and custodial responsibilities of these special funds. Congregations, regardless of size, are always wise to be prepared to receive significant gifts with a clear and direct processes for handling such generosity. It signals to a person of high capacity that they can give a gift, it will be managed prudently, and plus, will not start a church fight! Such a policy also reminds the church that it is a steward of resources that may have taken a person\u2019s lifetime to accumulate. Honoring a person\u2019s legacy includes the responsible management of their sacred trust in the congregation with such a gift.<\/p>\n

Let\u2019s say your congregation received the gift a grand piano a generation or two ago. At the time of the gift, the piano played beautifully and was used often for leading worship. Over time, however, the piano has developed several expensive-to-repair flaws, and upon a renovation of the sanctuary, no longer serves the needs of the music ministry. What should you do? How does one retire a gift at the end of its useful life?<\/p>\n

Your church needs a stated policy that recognizes that all<\/em>tangible assets have a beneficial life span. Normal use, obsolesce, or simply the passage of time can render a gift unusable. While grateful for a gift given (or cash designated to purchase such an item), the congregation needs to have self-determination on when the gift no longer has the capacity to serve the original purpose for which it was given or was eventually employed.<\/p>\n

Additionally, when the cost of maintaining or repairing an item exceeds its value to the church, the gift should be able to be \u201cretired.\u201d This is simply good stewardship. It is not, however, always as simple or easy to do what otherwise seems like the right thing to do!<\/p>\n

A good gifts policy will include the ability to retire the gift while still recognizing that there may be strong sentimental attachment to the item. As I discovered in my ministry, even office equipment that had been purchased a generation earlier can have a strong connection to the friends and family of the person (no longer living) who provided the money for its acquisition.<\/p>\n

When you think about retiring an item that has been in the sanctuary, or had some other highly visible function, quietly slipping it into to the dumpster may not be appropriate. Some form of public acknowledgement and formal de-commissioning can serve multiple beneficial functions. I offer this example that was used when a congregation retired an instrument that could no longer be kept in tune due to age and for which the cost of repair was simply prohibitive.<\/p>\n

One:\u00a0<\/strong>We give thanks for the generosity of the saints<\/p>\n

Many:\u00a0<\/em><\/strong>Who have passed on to us the stories of our faith.<\/p>\n

One:\u00a0<\/strong>Who thought not only of their current moment in time<\/p>\n

Many:\u00a0<\/em><\/strong>But who dreamed about providing for the future, for those like us who would come after them.<\/p>\n

One:\u00a0<\/strong>We remember Elizabeth Knowles, her love for Christ and her belief in the power of music to lift the soul.<\/p>\n

Many:\u00a0<\/em><\/strong>We give thanks for her gift of this instrument and for the music it created to enrich worship for three generations who have sung praises to God in this space.<\/p>\n

One:\u00a0<\/strong>As with all things that are created, there is a limit to life and usefulness, a moment that reminds us that we and are our possessions, indeed the whole earth, is finite and that only God is infinite and goes on forever.<\/p>\n

Many:<\/em><\/strong>We remember with gratitude the service it has provided, as well as the one who saw that we should have it for a time to use. We release it from its sacred service to our congregation with joy and thanksgiving, and pray that we too, would look with hopeful eyes to the future and those who will follow us in the journey of faith.<\/p>\n

All:<\/em><\/strong>Thanks be to God!<\/p>\n

Sometimes you simply don\u2019t have enough information about gift or the donor when an item needs to be retired. A congregation I served was involved in an extensive renovation that included the removal and replacement of carpet whose age and origin were not clear.\u00a0There was, however, bronze <\/em>plaque of some substance on the back wall of the sanctuary that bore the name of a woman who had apparently given the money for carpet\u2019s purchase. (No one had seen a member of that family in church for over 30 years!) After efforts to track down members of the family failed, it was decided that that the plaque and a picture of the sanctuary when the carpet was new (and a small square of the same) would be mounted in a shadow box in the church library. Honoring donors and their gifts is important \u2013 it sets the table for gifts in the future, as it was clear that this congregation was grateful for its members\u2019 generosity.<\/p>\n

A strong \u201cretirement policy\u201d within a Gifts Policy will also include that the church is not required to store or otherwise maintain possession of an item once it has been appropriately removed from service. Also, the church should not be required to return an item, nor notify the donor that the gift is no long in service or possession, unless otherwise stated and agreed to by all parties at the time the gift was given. Be certain that this is clear at the time the gift is receipted to the donor.<\/p>\n

Having a Gifts Policy in place protects the congregation and is a sound \u201cbest practice\u201d of fiduciary responsibility. Acknowledging that gifts have a useful lifespan and unencumbering the church from unnecessary and difficult obligations that some gifts can otherwise have attached to them allows the church receive gifts without undue concern. And all of that aside, how many old upright pianos with 87 keys, broken table tennis tables, or sofa-bed couches with painful springs do you really need at your church\u2026? A well written Gifts Policy can help you with that!<\/p>\n

Want to view a sample of a Gifts Policy? \u00a0Click Here!<\/a><\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

The Importance of a Gifts Policy Churches and charities have one major thing in common: they are dependent on the generosity of others (expressed through gifts to the organization) to have the financial resources they need to perform their mission. For this reason, congregations need a policy about gifts that specifies how gifts may be […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[52,25,64],"tags":[],"featured_image_urls":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":""},"post_excerpt_stackable":"

The Importance of a Gifts Policy Churches and charities have one major thing in common: they are dependent on the generosity of others (expressed through gifts to the organization) to have the financial resources they need to perform their mission. For this reason, congregations need a policy about gifts that specifies how gifts may be received, refused, and\/or retired at the end of their useful life. What does a gifts policy do? A good gifts policy will define a process as to how a gift is received and recorded by the church, and how it is to be receipted to…<\/p>\n","category_list":"Administration<\/a>, Administrative Resources<\/a>, Tool Box<\/a>","author_info":{"name":"Bruce Barkhauer","url":"https:\/\/centerforfaithandgiving.org\/author\/bbarkhauer\/"},"comments_num":"0 comments","featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":""},"post_excerpt_stackable_v2":"

The Importance of a Gifts Policy Churches and charities have one major thing in common: they are dependent on the generosity of others (expressed through gifts to the organization) to have the financial resources they need to perform their mission. For this reason, congregations need a policy about gifts that specifies how gifts may be received, refused, and\/or retired at the end of their useful life. What does a gifts policy do? A good gifts policy will define a process as to how a gift is received and recorded by the church, and how it is to be receipted to…<\/p>\n","category_list_v2":"Administration<\/a>, Administrative Resources<\/a>, Tool Box<\/a>","author_info_v2":{"name":"Bruce Barkhauer","url":"https:\/\/centerforfaithandgiving.org\/author\/bbarkhauer\/"},"comments_num_v2":"0 comments","yoast_head":"\nThe Importance of a Gifts Policy - Center for Faith and Giving<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/centerforfaithandgiving.org\/2018\/07\/the-importance-of-a-gifts-policy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Importance of a Gifts Policy - Center for Faith and Giving\" \/>\n<meta property=\"og:description\" content=\"The Importance of a Gifts Policy Churches and charities have one major thing in common: they are dependent on the generosity of others (expressed through gifts to the organization) to have the financial resources they need to perform their mission. 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