Bequest Stories #3 – Long-Time Coming

Mrs. Dawson was in her 90s when she died. She left her church and a local university each 40% of her $4.5 million estate (which was invested 100% in Coca Cola stock and was worth double that just a few years before – there’s a lesson in fund management there). As the church administrator, I went to her house with the minister for senior adults to see if there was anything related to the early days of the church (her father-in-law was the founding pastor). We secured a few books and her beautiful flapper wedding dress! The remainder of her estate was left to a medical school in Iowa.

A few months later I got a phone from someone in the development office of that medical school. She was looking at a check for about $900,000 and said there was nothing in the school’s records about her attending the school. I laughed and said that we all wondered if they knew of any connection. I told her that according to the will, the gift was completely unrestricted and the school could spend it any way they wanted (I think she silently shouted for joy). I also said that to the best of our collective church knowledge, she had not lived in Iowa but that we believed her brother had attended the med school sometime in the 1920s or 1930s, about 70 years before her death. We talked for a few more minutes and then hung up.

Mrs. Dawson’s will was written in the 1980s but she remembered the kindness half a century before of a distant medical school toward her brother and she wanted to express her appreciation. They were exceedingly happy to get an almost $1 million gift with no restrictions. It took a long time for this gift to “mature” but it continues to make a lot of people very happy. By the way, the church used its $1.8 million on scholarships for college kids (so did the university).

Lead On!

Steve

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Bequest Stories #2 – Max $1 Million

Mr. Beeson was a generous man. When he died in 1990, he gave money to a seminary in his hometown of Birmingham (Beeson Divinity School), to Asbury Theological Seminary in Kentucky, and to his church. He gave his Birmingham church $20 million and said they could only spend $1 million a year. The church’s foundation was thrilled at the gift and began working on ways to support and expand current ministries inside and outside the church.

Things went well for several years and the money was invested prudently. However, the 1990s were great years for investments and within a decade, the fund was now worth over $40 million even after the church spent $1 million each year. The foundation leaders recognized they had to do something to honor Mr. Beeson’s intent.

Some lawyers were consulted and they agreed to take this to a judge. Upon careful consideration of the church’s requests and the will, the judge altered the fund’s spending policy. The fund was permitted to spend up to 5% of the corpus (at that time just over $2 million per year). The Beeson Fund to this day blesses people in ways that Mr. Beeson could have never imagined. The church is fortunate to have this gift and they work hard to ensure they honor Mr. Beeson’s wishes with the programs they fund.

The proverbial “hand from the grave” constricted the church too much. When you make a will or when you advise someone on a will, ensure the time and purpose restrictions permit some leeway long after you die.

Lead On!

Steve

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www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

Bequest Stories #1 – The Flowery Hand from the Grave

Years ago a lady who lived on the outskirts of Atlanta included her church in her will. She left the church her home and two acres. The lady loved flowers and her will’s instructions were that the annual money from the bequest investments was to ensure there were flowers on the communion table every Sunday. Time passed but she didn’t. More time passed and she didn’t. When she died, Atlanta had grown and surrounded her two acres. It sold for $600,000.

A typical foundation’s annual distribution policy is spending up to 5% of the corpus which in this case means the church would have access to $30,000 a year for flowers. Most flower arrangements cost $50 to $75 so this is FAR in excess of what the church could spend. They were stuck and the only person who could resolve this was dead. Actually, there was another person – a judge.

The church petitioned the judge to remove the restrictions imposed by the will. The judge agreed and said that money could be spent in this order of priority:

  • First: the church would ensure there were flowers every Sunday on the communion table
  • Second: the church could use money from this bequest for the beautification and grounds maintenance around the church
  • Finally: the church could use money for any building maintenance and improvements

The proverbial “hand from the grave” constricted the church too much. When you make a will or when you advise someone on a will, ensure the time and purpose restrictions permit some leeway long after you die.

Lead On!

Steve

www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

The Executor

My office door was always open and several LOLs (little old ladies) would sit in my office talking with me while I worked. Phyllis had no family except for two basset hounds. She used her church friends to the point where they were tired of helping her. One evening she took sick and was rushed to the hospital where a few friends gathered. In the middle of the night, she dictated and signed a half-page will and her friends said she should put me as the executor. I was notified of this the next day.

I accepted this even though I was no longer at that church; I felt it would be the right thing to help get through a temporary crisis and after a month get a better will naming someone else as the executor. I helped her move out into a retirement community, put the dogs in a kennel for the time being, get medical equipment, etc. After just a few days in her new location, she was again rushed to the hospital and died the next day. My plans were completely upended. I was now The Executor.

I first had to relocate the dogs to a rescue shelter. Then I had to contact various government agencies for death certificate, Social Security payments and death benefit, etc. I had to go to court to be recognized as the official executor (by coincidence a friend was the judge!). And then I had to find an estate liquidator and have an estate and house sale. It took months to do all this.

In the end, Phyllis’ estate netted after expenses about $80,000. Her will stated she wanted to create a named fund at the local Community Foundation with her church’s music ministry as the sole beneficiary of the annual distribution. Her church received about $4,000 the first year and will get more each year as the fund increases in value.

In hindsight I can thank Phyllis for that experience but at the time it was a humongous pain. In the end, she gave a forever gift to her church to the music ministry she loved so much in life.

Lead On!

Steve

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www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

End of Calendar Year Gifts

When it comes to end of year, you need to have careful attention to some details:

  • What is the date on the check?
  • When did it come into the possession of the church?
  • When did it cease to be in the possession of the donor?
  • If it was mailed, what is the postmarked date (and keep the envelope for future reference)?

The IRS says that you can give tax credit for gifts that are not in the possession of the donor as of 1/1 @ 12.01 a.m. So, if someone makes an online donation at 11:59 p.m. or earlier on 12/31, then the gift can go toward that year.

If someone puts a check in the mail on 12/31, then it is no longer in the possession of the donor. The IRS considers it valid for the prior year. It may be postmarked in the new year but it should go toward the prior year, unless the check is dated for the new year. If the postmarked date is January 3, 4, or 5, use your best judgment to decide if it was still in the donor’s possession in 2019 or if it was mailed in 2018. You may even need to call the donor.

For depositing money received in the new year but credited to the prior year: make the deposit to the bank as early in January as possible; in your accounting software put a deposit date of 12/31 so it will show up on the income statement for the prior year. It will show up in the bank reconciliation as a “deposit in transit.”

The date that the money is in the bank is not important; the date that it ceases to be under the control of the donor is. Dealing with stock gifts at this time of year is especially tricky in determining what year to credit it to because you have to factor in when the donor gave instructions to the broker to sell the stock. Talk with the donor and the broker to ensure you have accurate info regarding last minute stock gifts. 

Lead On!

Steve

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www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

Special Offerings for Specific Needs

Churches can have up to four special offerings for missions and other causes in a year – any more than that and it begins to affect the contributions to the ministry/operating budget of the church. Here are some ways to have special offerings that won’t affect your budget offerings

  1. Announce that “On Sunday, Month Day, there will be a special offering to help our XYZ Ministry. While there is money in the budget for XYZ, we need additional monies to pay for additional supplies and events that are planned. The first $XX,000 given will go to the regular budget but all monies given over $XX,000 will go for XYZ. Thank you for your generosity for this wonderful ministry.”
  2. The $XX,000 figure needs to be whatever the treasurer feels is a regular Sunday offering – the amount that would normally come in that Sunday for basic operations.
  3. Promote that special offering for 3-4 Sundays before the date using the offering time to show slides of last year’s event, interviewing people about their experience, etc. Any money received over the threshold helps lower the budget cost of XYZ. And any special offering funds not used for XYZ this year can carry over to the next year.  Alternate what is done each year so there is variety and so these offerings don’t get old.
  4. After the event, tell people how much was raised toward this ministry. If you don’t reach that goal, tell people that, too. You may get some designated gifts for the XYZ Ministry.

Lead On!

Steve

www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

Send Donor Statements More Frequently

Startup Stock Photos
  1. Let your donors know regularly how much they’ve given. Send contribution statements five times: the first week after each quarter ends plus an extra one the first week of December. A statement in early December reminds people of how much they’ve given (or not given) to the church so far that year and provides a reminder to make a contribution. Emailing statements is feasible with most church database systems at no or low cost.
  2. Every time you send out donor contribution statements, include a cover letter which tells 2 or 3 very short stories (tweets size) about the ministries of the church. This keeps people informed about what is going on. Also, the cover letter tells the donors who to contact the church office to correct erroneous data.
  3. For churches that mail offering envelopes to donors, send those out four times year.  Handing out or mailing offering envelopes just once a year means most people are aware of giving just once a year. Also, some people lose their packet of envelopes in a month so getting packets four times a year helps those people.
  4. Five contribution statements plus four mailings of offering envelopes = 9 times a year that members are being reminded to give.

Lead On!

Steve

www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of

First Time Donors

  1. Coming to a church for the first time means giving up several hours of your day (getting dressed to come, driving, being there, and going home). People have to be willing to attend something where they don’t know what is going to happen and who’s going to speak to them. It can be intimidating. People who visit your church for the first time should be acknowledged. The best way to do that is with a word at the door of the church by one of the ministers or, if you get their contact information, a brief note thanking them for giving their time to attend.
  2. When someone gives to the church for the first time, they not only are giving their time but also their labor. That is a big deal and it, too, should be acknowledged. The church’s finance office can tell the pastor who are first time donors because they’ll have to enter their info in the database. Most of the time the church can capture the donor’s information from a check or the email from digital donation. Send first time donors a note thanking them for their gift – they’ll be pleasantly surprised.
  3. An extra step to thank donors is to give them a book. A couple of good ones are The Treasure Principle by Randy Alcorn and Fields of Gold by Andy Stanley. The cost of the book and mailing will be about $10 but it will send an important message to the donor-the church is investing in you and we thank you for your gift with one of our own.

These are effective methods to recognize and thank first-time donors in a way that doesn’t embarrass them and may actually encourage them to give again.

Lead One!

Steve

www.churchbestpractices.org – all kinds of FREE church manuals and sample documents
www.financeforchurches.org – 400 plus blogs on every church administration topic you can think of