Are Planned Giving Programs Appropriate for the Local Church?
By Jerald Jackson

It seems that everyone is doing it. Promoting planned gifts, that is. Hospitals, local public radio stations, community foundations, colleges, seminaries, and environmental groups are all getting into the "planned giving" act. Local churches are also discovering planned giving.

The term "planned gift" is not to be confused with the Christian stewardship ideal of "planning your giving." The planned gift is better described than defined: A planned gift may be a bequest, a life-income gift (such as a gift annuity, a charitable remainder trust, or a pooled life income fund), or giving through a special insurance program. With a planned gift, the recipient (i.e., the church) does not have the use of the gift immediately. Institutions that ask people to consider making planned gifts are thinking of future income, rather than current income.

Given these definitions, is planned giving appropriate for the local church? It depends.

It depends first on our theology of Christian stewardship: We know that for our spiritual well-being, we need to give. We know also that the church requires resources. Traditionally, resources have been understood as current income. The Christian gives a portion of his or her current income for the support of current ministries of the church. We can safely assume that 95 percent of a congregation's time and energy is spent in the area of "current needs." The giving equation for Christian stewards is:
A Portion of My Income=This Year's Church Budget

"Planned giving addresses the individual's need to consider the meaning of stewardship in relation to accumulated assets.

Usually, our practice of financial stewardship stops here. From time to time, however, we are forced to consider other levels of stewardship and need. One level has to do with capital programs, either on the local level or conference level or higher. That giving equation, for the Christian steward might be stated:
A Larger Portion of My Income and Perhaps Some of My Savings=The Special Capital Needs of the Moment

Planned giving addresses the individual's need to consider the meaning of stewardship in relation to accumulated assets. Do our churches challenge us to extend our notion of stewardship to our accumulated assets? Largely, no — usually because the local church is not at all clear about what it would do with such resources. That giving equation for Christian stewards might read:
A Portion of My Accumulated Assets=?

It is not surprising that when people think of a planned gift in relation to accumulated assets, they usually think of an endowment. When the church can articulate the place of endowments in ministry, then the planned gift will make more sense to church members.

Whether or not planned giving is appropriate to the church also depends on the technical capacities of the local church. Can the church properly administer planned gifts? Gift annuities, for instance, require investment skills, reliable annuity payments to private beneficiaries, and competent handling of the IRS requirements. Charitable remainder trusts demand even more sophisticated skills.

Some larger congregations are equipped to handle such gifts, but most churches are not. Fortunately, most areas now have well-staffed foundation or development offices to which individual congregations may turn for the administration of such gifts.

If your church sees an opportunity for spiritual development in helping the congregation apply stewardship principles to accumulated assets, and if your church has access to competent fund administration, then it is ready to consider a planned giving program.

To be successful, a planned giving program requires the right environment. My first church (which I served in the 1960s) was situated on a pre-freeway route to pheasant country. The old-timers used to talk about the endless stream of traffic that had passed through the town during pheasant season. However, the traffic had dwindled to a trickle.

What had happened? Had the hunters wiped out the pheasant population? The pheasant population was indeed down. However, the decrease was not due to hunters but to farmers whose new plowing and cultivating practices had destroyed the pheasants' habitat.

We are much more sensitive today to environmental questions and to the needs that living things have for healthy environments. The same is true for a planned giving program:

We need to create an environment where a planned giving program can thrive. To create that environment, we must pay attention to four fundamentals: purpose, structure, policies, and promotion.

Clearly Define the Purpose

The question mark in the third equation above must be replaced with a focus that is carefully thought out and fully integrated into an understanding of the individual's spiritual need to give and the local church's need to be in ministry. The ministry that planned gifts support will vary from one locale to another, but it will usually be some form of endowment. While the purpose should be clear, it should also be general enough to allow flexibility. Several congregations, when defining purposes for endowments, include one or more of the following:

• A permanent property;
• A special program endowment;
• An outreach endowment;
• A scholarship endowment.

Establish a Structure

Most churches allow for alternative structures in developing a planned giving program. One possibility is to develop the program through the stewardship committee of the church. Another, and more effective, possibility is to form a separate endowment committee. In some churches, planned giving is an afterthought of the finance or memorial committee. The needs of the church will determine which structure is best. Whatever structure your church uses, the purpose of the committee (in addition to the purpose of the endowment) must be clear.

Establish Policies That Create Confidence

Investment of Funds. Assuming that you have accepted the notion of endowment ministries, you will need to consider the question of investment. The temptation is to invest for income, but that may not be appropriate. An endowment fund should be invested for long-term results. While it is important to produce funds for the specific ministry for which the endowment was created, people understand and prefer to support an endowment that is invested for 1ong-term results rather than for high current income. Many area foundations or offices of development provide investment opportunities that are not otherwise available to local churches.

What area of the local church will be charged with the responsibility of making spending decisions? In some circumstances, this responsibility is relatively clear. For instance, the board of trustees would most likely be charged to spend any distribution from a property endowment; a program committee would probably oversee the spending of special program endowments. However, if the church is to inspire confidence, these responsibilities need to be stated and understood.

Promote, Promote, Promote

Once structure and policy have been determined, the story must be told and retold. Create and distribute a simple brochure that states the purpose of your endowment program. Wills seminars and estate-planning seminars should be offered frequently (even if few people attend). Once funds are generated for spending, the achievement should be publicly celebrated. The committee charged with promotion will need to think of ways to bring the planned giving program to the consciousness of the congregation. Once structure and policy have been determined, the story must be told and retold.

Three focuses generally command the attention of the endowment committee: investment of funds, granting of funds, and promotion of the endowment program. If the endowment committee tries to do all three, it will spend all its time on investing and spending. Assign these responsibilities to subcommittees or task groups. If no one knows about your endowment program, if no one is giving planned gifts, if no one's will includes your church, of what use is the endowment program?

For more information on promotion, contact your area foundation, office of development, or The Center for Christian Stewardship, General Board of Discipleship, P.O. Box 340003, Nashville, TN 37203-0003.

Jerald Jackson (at the time of this writing —1991— was the executive director of the New Mexico Conference Methodist Foundation, Inc. He is now a consultant.

Note: This article originally appeared in print as a May 1991 Celebrate Stewardship article.

Copyright © 1991 the General Board of Discipleship. Permission is granted to use this article as long as the copyright notice and credit to the General Board of Discipleship appears.