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Be on the Lookout: What to Ask When Donating Money

Rachel Ankers November 10, 2017

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As church leaders, we all want to get our churches and our congregations involved in efforts locally and globally that will make a positive impact for the Kingdom of God.  Many times, this means contributing financially and donating to churches or individuals who are doing the Lord’s work.

Wanting to steward God’s resources properly, there are a few things all of us as leaders will want to consider before making our donation.

THE BASICS

Prior to any contribution, there are some essentials for wise giving with regard to taxation and proper recording of your gifts.  Find out if the organization has a proper non-profit status (most often 501(c)3).  If not, find out how they are collecting gifts and get the right advice to determine if it is legal. Also, do they issue tax-exempt receipts with both your name and their name on them?  How will they report back to you on your gift? Is their reporting a general ministry report or is it specific to your gift? All of these areas will not only satisfy your accountant, but also will point to the legitimacy of the ministry to which you want to give.

Another “hot button” at present is with regard to organizational administration fees.  Most organizations keep a portion of your gift in their headquarters office to help with their own overhead costs.  This is a legitimate and necessary practice.  However, be sure to find out what percentage of your gift actually makes it to the field.  Industry average for administrative fees is generally 8-15%.  Any more than that may require you to inquire further about their on-field programming costs.  Any less than that may also be too good to be true.  Find out.

IS IT A WISE DECISION FOR YOUR CHURCH?

We’ve talked before about allocating missions monies in alignment with the passions and general vision of your church.  The same applies here.  Overly emotional appeals by aid organizations tug hard on the heart-strings and produce some of the greatest monies through people longing to satisfy their emotional response to a sad-looking photo of a starving child.  Make sure your decisions are based on previously agreed criteria, while still allowing the Holy Spirit to guide you in spur of the moment decisions.

Additionally, the wisdom of your gift requires assessing whether your church will be the only source of an organization’s funding.  What will happen if for some reason you have to stop giving?  Will the organization fold?  Will the people they’re serving suffer as a result?  A well-run organization will have many small to medium-sized funders who all contribute to the whole.  Be sure to ask about their other donors and the percentage of their overall budget your gift will be covering.

DOES IT GROW THE INDIGENOUS NATURE OF THEIR MOVEMENT?

As the Church grows and expands around the world, the ultimate goal of every church or mission movement is to develop the indigenous Church with indigenous leadership, local funding, and a nature that is self-propagating.  When considering your giving to missions groups, individuals, or aid organizations operating in developing countries, find out the degree to which the entity is indigenously led.  Are they moving toward greater and greater autonomy? Do they have a plan for sustainability in the future?  If so, that’s great.  If not, continue asking questions before you give.

Sustainability requires one important factor: indigenous funding.  The topic of indigenous funding is a deep and sometimes controversial one.  The first question to ask? Do they have any sources of indigenous funding? Is it cash-based or is it made of in-kind gifts?  Developing nations and their church movements must be allowed to take their time in increasing their locally-produced funding in their own culturally-appropriate way.  The concept of purchasing power parity applies to this evaluation. We cannot expect our gifts to be matched dollar for dollar.  But we can ask questions regarding their development plan for local funds.  If there’s a plan, please contribute to the group.  If there’s no plan, then perhaps they need to do more strategy development before accepting our gifts.

ARE THEY DOING GOOD WORK IN THE RIGHT WAY?

There is certainly no doubt that the group you’re considering funding is doing good work.  You’ve matched their mission and vision with all that you as a church are trying to accomplish for God’s Kingdom.  There’s still one more area of evaluation you might want to consider:  Are they partnering with other local organizations to accomplish their work?  While this is not always a requirement for doing good work, if working together with another group would maximize their outcomes, it’s worth investigating and asking the questions.  Who else locally is doing what they do?  Could they partner together?  Again, it’s not always a requirement, but being a good steward of God’s monies requires us to find out.

THE BOTTOM LINE?

Please give to worthy causes at home and around the world that are building God’s Kingdom!  Extend trust to local organizations, while at the same time allocating your limited resources to those who are championing best practices and are committed to excellence.

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