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Best Practices for Handling Large Church Gifts

Put yourself in the shoes of this medium-sized New England church. 

After a decade of declining attendance, a new pastor has arrived and begun a process of turning the ministry of the church around. The congregation is just beginning to reform its reputation in the community. 

After years of an aging congregation, where the nursery sat mostly empty, the church is beginning to engage college students and young families. For the first time in five years, you finally have the beginning of a Sunday School class. 

Picking up on what God is doing through your church among the younger generations, your elders have been sharing a vision for a vibrant community focused on engaging the youth. 

Then, one day, your church’s wealthiest member comes to you with an offer—the largest gift in your church’s history (enough to significantly impact your budget for the next half a decade). But there’s a caveat. 

The donor wants at least half of the money to go toward a ministry to your community’s population of seniors. To help better supplement the gift, he is asking you to move away from the stated direction of your elders and bring back some of the more traditional elements of the church to better connect with the seniors he wants the church to reach.

You instantly recognize that telling this wealthy member ‘No’ could not only put an end to your church receiving the gift, but his participation in your church at all.

Your heart drops. Instantly, you realize seminary never prepared you for situations like this.  

What could you have done to be more prepared for this moment?

Even if the donor doesn’t have an ulterior motive, large church gifts come with complications you have to prepare for ahead of time. That’s why it’s so important to have a practical, written-out plan for how you’ll handle large gifts before you ever get started. For example, having a gift acceptance policy and a legal strategy in place can help you get through the scenarios like the one above in a God-honoring, purposeful manner.

Here’s how to get started with that. 

Every gift has legal implications, but large gifts can often have even bigger implications. It’s critical you bring in outside help to consider what some of these implications might be. If you’re a part of a church network or denomination, they may have some legal experts to help. If not, talk to large churches in your community that may have some experience in this. Make sure you’ve documented the legal help you’ll engage in so you’re ready when the time comes.

Establish a Gift-Acceptance Policy

As mentioned in the introduction, not every gift is something your church should accept. A gift-acceptance policy provides your church with a predetermined framework for decision-making, so every donation (regardless of size) is handled consistently and transparently. A gift-acceptance policy needs to clarify:

  • Types of gifts accepted: Will your church accept cash, stocks, real estate, cryptocurrency, etc.? Describe how you’ll store or liquidate the gift so you can effectively process and use the donation.
  • Criteria for acceptance: For example, it is commonly recommended that your church only accepts donations that align with its mission, comply with local, state, and federal laws, and pass a general cost-benefit analysis. This means the gift should offer more value than it costs to manage and maintain. A clearly described criteria will help to lessen the chance of hard feelings developing over a rejected gift.
  • Procedure for gift review and acceptance: Who will make the decision whether the gift is accepted, the church’s pastor, the church board, etc.? Does the size of the gift (and type of gift) play a part in this procedure?
  • Communications and reporting: How will the donor be acknowledged? What kinds of communication are required of the church body as a whole?

A clear policy on this will make sure every gift is scrutinized before acceptance, so you’re not blindsided by burdensome and unexpected costs. 

Understand the Donor Intent

Donations are always about much more than money. You need to make sure you understand and document why the donor gave the gift. Sometimes, the gift comes with specific instructions on how to spend the gift (strings attached!). Even if the donor hasn’t provided specific instructions, they often have expectations either communicated or not. It’s important to uncover as much of that as possible.

Donor intent is typically about two issues. 1) Why did the donor decide to make the gift? 2) How does the donor expect the church to use the funds? Try to document an answer to each of those questions and make sure anyone who is making decisions about how the gift will be used sees these answers. 

It’s also important to understand how the giver expects to be recognized. Some givers don’t want any public attention. Others say they don’t want recognition, but they really do. Make sure you understand where the donor really is. 

Plan for the Use of the Gift

The time to plan for the gift’s use is before you get the gift. Develop a wish list of items you’d invest in if the funds were available. Many of your donors, even the ones making larger donations, won’t have any preconceived ideas of how they’d like to see the money used. If you have that wish list planned, you can tell these donors how you anticipate using the money. You may even be able to involve them in the process of deciding between several options. This only works if you’ve vetted the options first. 

Be Transparent about How You Use the Donation

Transparency leads to trust. A substantial gift won’t go unnoticed, and people will start asking questions if they see unexpected expenditures. 

Even if the donor wishes to remain anonymous, you can still communicate transparently by saying, “Thanks to a generous gift, our church is able to _______.” 

Transparency not only builds trust but also encourages future donations by clearly showing the impact of these gifts on your church’s mission.

Balancing the donor’s desire for anonymity with the need for transparency is crucial. Make sure to openly share the overall impact of the contribution, even if specific details are withheld by the donor’s request.        

What Could God Do Through the Next Large Gift? 

When someone gives to your church—large or small—it’s a testament to the trust and generosity of your congregation. Handle the gift wisely and watch God further his work in your community through your church.

It’s not about the money. It’s about stewarding the resources in a way that glorifies God and strengthens your ministry.

For more about accounting practices that help you take the next step in God’s mission for your church, check out our free guide, Simplified Accounting: A Church Guide to Financial Clarity and Compliance.

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