Why Your Church Desperately Needs a Planned Giving Program
by Patrick O’Donnell, plannedgiving.com
The best time to start a planned giving program was 25 years ago.
The second best time is now.
I remember sitting in church with my parents one hot, summer Sunday morning a long time ago. I stared at the shifting patterns the sunlight made as it shone through the stained-glass windows. I shoved a hymnal around in circles on the pew next to me, desperately pretending it was the car taking me home to watch cartoons and eat pancakes for breakfast.
But instead, I was buttoned up in my itchy Sunday best and stuck in a humid, stuffy church —along with the hundred or so other folks there that morning—was a captive audience, and the pastor was droning on (and on, and on). My eyes grew heavy, my head nodded … and I got a poke in the ribs from Dad.
The Fundraising Faux Pas
Was the man at the pulpit delivering the gospel? Inspiring the congregation with a message of hope, peace, and love? Firing us up to “spread the word?”
No, no, and no.
He was going on, ad nauseum, about the church’s latest fundraiser. The goal was to purchase a nearby tract of land and build a much bigger church on it. As I dimly remember, the congregation was being tasked to put a certain percentage more in the collection basket each Sunday for the rest of the summer. He talked about tithing, about cutting down on “luxuries” at home so that you could “do your part.” He talked about the duty of the congregation to meet this lofty new goal and stuff those envelopes. And to “motivate” people, he was going to post names and amounts donated on a bulletin board in the vestibule for all to see.
On the car ride home, my Pop clenched his pipe between his teeth, muttering and swearing. The gist of it was, “This guy has gone too far. We already give more than our fair share to the church. Now he’s going to try to shame us into giving more by putting our names on display?”
The Fiscal Fallout
After that Sunday, my parents still gave their regular amount—but opted to just drop the cash loose into the collection basket, so their name would not appear on the bulletin board. And eventually, my folks left that church altogether, opting for one farther away that they felt was more fiscally responsible.
Even as a kid with no idea about philanthropy, I could tell that the pastor was a lousy fundraiser. He’d managed to anger most of his congregation that day, and things didn’t get much better from there. The new church got built … but not before a very long time had passed, and a new pastor had taken over.
Now, as an adult with experience in both annual and planned giving, I can see exactly where that pastor went wrong — and unfortunately, most of his blunders seem to be a pretty common occurrence in church fundraising here in the U.S.
A Sensitive Subject
Now, our pastor was a little different than many others I’ve heard over the years. Most are afraid to talk about money—he wasn’t. His problem wasn’t the topic. It was his approach to what is, for most, a very sensitive subject:
He was asking congregants to give more cash each week, smack dab in the middle of a recession (this was the early 1980s).
He was pitting congregants against each other, instead of encouraging them to work toward a common goal (shame is an awful way to raise gifts).
He was using pulpit time not to deliver “the word,” but to talk about the church’s shortcomings and needs (hardly an inspiring way to spend a Sunday).
It was an annual campaign based almost entirely on passing the collection plate. (Planned giving? What’s that?).
Like I said, some of his blunders are typical of America’s churches and pastors. They struggle to talk about money and fundraising. They’re even more tongue-tied when it comes to endowments and planned giving. And they rely largely on the collection plate to pay the bills, advance their mission, and fund any special projects.
A Big Contradiction
Studies show the United States is the most religious Western nation, and we’re among the wealthiest nations in the world, too. Yet our churches rank near the bottom of U.S. charities when it comes to soliciting and closing major and planned gifts.
Instead, most contributions take the form of small cash donations — annual giving—in that collection plate. Sure, there are exceptions to the rule. And there are faith-based organizations (like the Salvation Army) that are planned giving pioneers.
But the simple fact remains that, as the country teeters on what financial experts say is the tip of a recession, most churches are still relying on annual donations for operating support only—which means they have no eye toward the future.
As we’ve written here before, it’s not that they don’t need long-term reserves (read Ten Reasons Churches Should Have a Ministry of Legacy Giving). When you defer regular maintenance on aging church buildings, you’re inviting costly structural crises. And church work, in general, is becoming more staff-intensive.
There are schools and day-care centers to run; outreach programs to staff … and budgets for salaries and benefits have steadily increased. And that doesn’t even take into account the hurt that the COVID-19 Pandemic put on nonprofits in general, and churches in particular. Many congregations pulled together to fill the void when soup kitchens shut down, or other community programs were forced to close—but in doing so, strained their own resources.
Congregations Are Looking Away
In terms of overall contributions to religious causes, Americans still direct most of their philanthropic dollars to their churches over other causes. But studies show that percentage is steadily declining. In 2018, it dropped below 30 percent for the first time. And by 2020, it had dipped to 28 percent, according to the National Philanthropic Trust.
Other studies show that very few churchgoers —just 5 percent—actually tithe (which, by definition, means to give 10 percent of one’s earnings). That’s a big problem if the collection plate is the main source of your organization’s funding. And still more studies show that congregations are shrinking—which means a smaller pot from which to draw donations.
But as concerning as these trends are, there’s a simple fix: A sustained, powerful planned giving program.
The Problem Isn’t Just at the Pulpit
Unfortunately, it appears that a majority of the nation’s pastors (and boards, clergy, committees and even congregants) are unfamiliar with planned giving.
They have no idea how simple it is to give (and receive) a bequest; have never heard of a Donor Advised Fund and have no idea they can accept a gift of life insurance or a retirement plan that could fund their mission for generations to come.
Maybe that’s because preachers are often more comfortable asking for money that will be used immediately to tend to human needs, and trust providence to provide for the long term. Or perhaps it’s because they were not trained to be fundraisers or tax advisors, and they’re reluctant to preach about topics with which they’re unfamiliar.
Even if board and committee members have financial backgrounds, they often lack the expertise to launch and administer a planned giving program. And that means missed opportunities continue to add up—along with demands on existing funding.
Time To Get With The Program
As we like to say, the best time to start a planned giving program was 25 years ago. The second best time is now. And as I mentioned earlier, churches literally have a captive audience. It’s also the perfect target audience: Although anyone can make a planned gift, many congregations are made up of older parishioners. With age comes wisdom—and a lot more thought about the kind of legacy you want to leave behind.
But what if the board isn’t on board? We often hear stories about folks who think focusing on annual giving is too important to divert resources to anything else.
For starters, the Doubting Thomases can dive into the numbers from experts like Russell James, whose in-depth study of philanthropic giving, published in the June 2020 edition of the UC Davis Law Review, found that including a charitable gift in a will generates a 77 percent increase in annual gifts from the same donors!
Then they can observe the benefits that promoting planned gifts has brought to arts and social welfare organizations, and even to other religious organizations like the aforementioned Salvation Army.
Here’s one final point that should sway the board: Churches start major and planned gift fundraising with a prospect base that would be the envy of many other nonprofits: a mature, geographically concentrated group of people who know and identify with each other, and consider the church to be an integral part of their identities.
The job, then, is to convince these prospects that their church must begin to build its endowment. What’s the first step? Most churches will need professional advice to make their case for a successful planned giving program. Then follows sustained marketing and the ability to follow up with donors. But getting started can also be as simple as having the pastor promote bequests for just a couple of minutes each service, and then growing the program from there.
Marketing that Works
Perhaps the biggest hurdle to overcome may be the idea that churches will need to spend money to make money, something anyone who’s worked in marketing or business knows. Again, the data mentioned above will help. And hiring a planned giving marketing team is usually the fastest, most effective way to achieve results. They’ll be able to give the church a goal, a plan, and a timetable. If your budget allows, you may want to consider hiring a full-time fundraiser with planned giving experience (so far, few individual churches hire a full-time planned-giving officer).
Because of church hierarchy, planned gifts are promoted a little differently than other nonprofits. The recognized mouthpiece of the church—the pastor—may convince congregants in a general way that there is a genuine need to build the church’s endowment. But they are unlikely to be comfortable discussing details of the gift plans that will build the endowment.
Therefore, it becomes a two-step process: First is a dialogue about the need to build the endowment, initiated by a pastor, board member, or other clergy. That’s followed by marketing materials that support the dialogue and raise the congregation’s awareness of and familiarity with the benefits of planned gifts—for the church, but especially for the donor.
For instance, a regular column in the church bulletin may point out the fact that a bequest allows a donor to make a much bigger impact than they’d thought possible, with no burden on their day-to-day cash flow. A flier mailed to congregants could point out how gifting a retirement plan also becomes a way to invest in your own legacy. A pamphlet left in the vestibule could illustrate the tax benefits of each type of planned gift. A potluck primer for congregants on the importance of making a will can be used to point out the benefits of planned giving through estate planning.
Perhaps most importantly, a planned giving website gets congregants thinking about possibilities for helping their favorite mission and stretching their donations. It’s a critical, all-in-one solution to describe all types of planned gifts, from bequests to life insurance, and appreciated property gifts to life-income arrangements. All the gifts have corresponding videos, making understanding how they work a breeze for prospects (and your board).
And, of course, many senior church members are already online—they email their grandchildren, invest online, shop, visit social media … and expect their favorite organizations to have websites they can use to explore and learn.
The Gifts Are Out There
Churches don’t need to abandon the collection plate or their commitment to provide social outreach in real-time — as long as they also plan for their financial future. It’s time churches understand what other nonprofits already know: The gifts are out there, but most of them aren’t in cash, and planned giving is the best way to get them.
Providing for a new roof and updating the office computers will take even more money tomorrow than it does today. It’s time to show present congregants that an endowment will help relieve future congregations from the dilemma of having to choose one financial priority among many, simply because of a lack of planning (and revenue).
Don’t be like my long-ago pastor who angered his congregation with his ham-handed fundraising schemes and delayed the construction of that new church because of his annual-giving mindset. Get on board with planned giving and watch both your endowment and your annual giving grow.