Gift letters (also knowing a statements of contribution) have several purposes:

• To acknowledge and thank donors for their gifts
• To ensure the church received the gifts and credited them to the correct fund
• To give members a chance to see how much or how little they’ve given to their church
• To provide an opportunity to the church to include a letter explaining to donors how their gifts were used and the people whose lives are being changed because of the generosity of the givers
• To instill confidence by donors in the integrity of the church’s Finance Office so they can see that the staff is handling gifts accurately

Gift letters should have all of the following elements:

• Name and address of the church or 501(c)(3).
• Logo of the organization would be great, too.
• Tax Identification Number of the organization. This is known as a TIN; sometimes it is called an EIN or FEIN (Employer Identification Number or Federal Employer Id Number)
• Name and address of giver
• List of checks which includes
  • Date of gift
  • Form of gift – check number, cash, online, or other description of manner of gift
  • Amount of gift
  • Purpose of gift – was it for the ministry budget, building, missions, etc.
• (Pledge – if you use pledges, they should be on the letter, too)
• Total of all the gifts by category and grand total
• Thank you sentence from the Finance Office and who to contact if there are any errors
• Sentence required by the IRS for tax-deductible gifts. Here is the one I use:
  • For IRS purposes, I must inform you that the gifts contained in this letter are based on intangible religious benefits. You did not receive any goods or services from _____ Church for this contribution. Please keep this letter as documentation of your gift.

Every time you send out gift letters, you should be accomplishing all of the purposes listed above and your giving statements should have all of those elements. Anything less means you’re not getting as much value as you could.

Maximize the impact of your gift letters by including a cover letter which has several additional elements:

• Paragraph 1 – several sentences thanking people for their generosity (please use that term – it doesn’t have any negative connotations and is viewed very positively by people; people like to be told they were generous)
• Paragraphs 2, 3, and 4 – three brief stories that have happened at your church within the past 3 months where people were changed for the good because of what your church did, events that had an impact on children or youth such as a mission trip or Vacation Bible School, and/or activities that reached the community or world with the Good News of Christ. Tell stories – people remember stories; if parables were good enough for Jesus, they’re good enough for you, too!
• Paragraph 5 – conclude the letter with another acknowledgement of their gifts and generosity. Also, mention who and how they should contact if there is an error in the giving statement.

Finally, how should you send them: I like sending them out by email because it is free. Society has trained people that email is normal, so use what society has taught people. For people without an email you’ll have to use snail mail. In a few instances, you’ll have to use snail mail for some situations where people’s giving needs to be kept confidential from another person in their home who has access to the family email – those are rare and sensitive, but you need to be aware of those. Snail mail costs about $1 for each letter (postage, envelope, paper, ink, and labor) whereas email costs just the labor (which you have to do anyway).

Lead On!
Steve

One quarter of 2012 is almost over so you need to prepare now to send out your first quarterly contribution statement of the year. Some churches send out statements only once a year – let me encourage you to send out statements each quarter plus one more:

• 1Q2012 – send out in the first 10 days of April
• 2Q2012 – send out in the first 10 days of July
• 3Q2012 – send out in the first 10 days of October
• 4Q2012 – send out the yearly statement by January 31

PLUS

• Send out a statement for the first eleven months (January through November) in the first 10 days of December. Why? So that people can see what they’ve given or not given so far in the year.

But let’s get back to 1Q2012!

Sending a statement out in early April makes sense for several reasons:

• Use this opportunity to send a letter with the statement of contributions explaining to people what their money has been used for. They want to know what the church did with it – so tell them all the good things you’ve been doing and are planning to do. Share with them a couple of compelling stories – that will make all the difference in the world to some readers.
• At this time of year (tax-filing season in the US), people’s awareness of how much they’ve given or not (and thus able to deduct from their tax return) is heightened. Since many people have just completed their annual tax forms, they’re making promises to themselves to give more away to charity so they can give less to the government. Sending a letter in early April gives them a great reminder to give a check to their church.
• Easter is typically in early April. Most Christians will come to church on Easter and they’ll usually hear a sermon about God’s gift to us through Christ. They will hear about giving and sacrifice – this letter is a way to encourage them to tangibly respond with their own gifts.
• Gentle reminders throughout the year of how much people give to their church are good for both the church and the donor. These reminders are not heavy-hitting or guilt-inducing. These letters are simply nudges in reminding people to be financially faithful to their church – and you’re sending these letters to the people who have already “bought in” to the vision of the church, they’re already giving!

So, here’s your homework for this weekend: find two great stories about what has happened in your church these past three months (since Christmas), put them in a letter, and send the letter with the quarterly statement of contributions.

Oh, one very important fact: send your letters with first class postage. Yes, that is a lot more expensive than bulk mail. But realize that the “open rate” (as opposed the “throw in the trash can rate”) of first class stamped envelopes to bulk mail envelopes is something like five to one (don’t quote me on that ratio, but it is way up there). People will open an envelope with first class postage far more often – and you want people to open envelopes to read the letter and the statement of contributions. Okay, back to your homework.

Lead On!
Steve