Church Fundraising in 7 Simple Steps
By America Kimlinger
When we speak with pastors and church planters, we often hear, “We are struggling financially; what can we do about it?” Many church leaders find fundraising overwhelming and don’t know how to change or where to start. However, with the right approach and mindset, fundraising can be a rewarding experience that furthers your church's mission and impacts your community. Here's a simple guide on how to win at fundraising for your church.
Step 1: Decide that This is a GOD-thing, Not a GOOD Thing
Many pastors struggle with fundraising because they're not convinced their vision is a God-ordained mission. They see it as a good idea but not necessarily a God-idea. Understanding that your mission is God-inspired reduces the risk and emphasizes that people are investing in a divine purpose rather than just a good cause.
Step 2: Develop a Fundraising Strategy
It takes money to do ministry! A successful fundraising strategy is essential in securing the necessary resources to carry out your church's mission and make a meaningful impact in your community. Here is a general fundraising strategy outline:
1. Know Your Mission: Your mission should be clear, relevant, and easy to communicate.
2. Set Clear Goals: Define what you want to achieve, how you will measure success, your timelines, and how you'll monitor progress.
3. Craft Your Fundraising Message: Focus on what you want FOR your supporters, not just what you need FROM them. Emphasize the blessings of generosity, engaging in significant causes, and living by faith.
4. Create Compelling, Sharable Content: Connect with your audience using storytelling, visuals, and a personal tone. Provide a clear call to action, such as donating or sharing.
5. Make Giving Easy: Did you know that around 80-90% of those donating will use online giving? Enable donations in all forms—cash, checks, and especially online. Having a robust online giving platform is essential. Consider using Giving Halo from StartCHURCH to streamline online donations and track your fundraising progress.
6. Ask with the 3 C’s in Mind: When asking for support, approach with unwavering confidence in your God-given mission, knowing that this can inspire others. Clearly articulate your plans, financial needs, and how contributions will be utilized, ensuring transparency and understanding. Lastly, ask with deep conviction, conveying that their generosity is an opportunity for mutual fulfillment and shared impact, not merely a transaction.
7. Build Strong Relationships: Prioritize open and transparent communication and show genuine appreciation for their support and contributions. Listen to their concerns, feedback, and aspirations to better understand their needs. Being present in the community involves actively participating in local events, initiatives, and gatherings that resonate with your church's mission and values. This engagement not only builds trust and goodwill but also strengthens relationships, making your church a valued and integral part of the community fabric.
8. Leverage Social Media: Promote your fundraiser on social media by creating engaging posts with images and videos, hosting contests where participants share your post and tag your church, and sending regular email newsletters with donation links.
Step 3: Innovate Your Fundraising Approaches
Sometimes, we have to think outside the box and do things differently from how we usually do them. One effective way for churches to raise funds for specific projects is through crowdfunding campaigns on platforms like GoFundMe, Kickstarter, or Indiegogo. These campaigns typically run 30-60 days, allowing churches to set clear goals and deadlines. On average, nonprofits raise approximately $9,237.55 through crowdfunding campaigns, illustrating their potential to mobilize community support and achieve financial objectives.
Another innovative approach is starting a thrift store that sells only donated items. According to IRC § 513(a)(3), income from selling donated items is tax-exempt, making it a viable fundraising option for outreach-focused ministries.
Additionally, churches can operate bookstores or coffee shops before or after services, as these activities align with the church's tax-exempt purpose and benefit members. Providing meals before or after services can also generate tax-exempt income, though the payments for meals are not considered charitable contributions. Hosting fundraising events like concerts, talent shows, and community fairs, managed by volunteer staff, can raise funds without being taxable, as per IRC § 513(a)(3).
Starting a secular nonprofit organization, such as a Community Development Corporation (CDC), allows churches to apply for grants they typically wouldn't qualify for. Although the CDC is nonreligious, it can still support evangelism efforts. Additionally, churches can establish a for-profit arm. Section 502 of the IRC permits tax-exempt organizations to own a majority interest in for-profit businesses and receive non-taxable income from these ventures after taxes and expenses.
Step 4: Seek Grant Funding
Securing grant funding for your church can unlock access to millions of dollars available through various grant opportunities. This process requires thorough research and meticulous preparation. Begin by understanding the specific guidelines set by each grant-making agency. Ensure you fit the target applicant profile, submit proposals within the application period, and personalize each application. Key requirements often include a history of operation, annual reports, a detailed budget, a balance sheet, and 501(c)(3) status. If you do not have 501(c)(3) recognition yet, there is no need to worry; we can help you obtain it.
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To streamline the search process, utilize grant databases like GrantStation, GrantWatch, grants.gov, and Guidestar. These platforms connect you with numerous grant opportunities, allowing you to apply filters such as industry or keywords to find relevant grants. Craft an effective grant request by developing a compelling narrative communicating your church's mission, goals, and values. It’s important to outline the need for funding, proposed activities, and expected outcomes and provide supporting documentation.
We suggest you manage the grant application process by creating a dedicated calendar or spreadsheet to track deadlines and submissions. Follow up with funders to check the status of your applications and maintain strong relationships over time. After receiving a grant, ensure funds are used to further your exempt purpose, set clear parameters to prevent misuse and maintain control over fund allocation.
Step 5: Be Legally Prepared for Receiving Funding
Ensuring compliance with legal requirements is crucial for churches and ministries receiving tax-deductible donations, including grants, tithes, and offerings. One fundamental step is obtaining 501(c)(3) tax-exempt status. This designation not only assures donors of tax deductions but also safeguards donations by demonstrating the organization's commitment to accountability and transparency. StartCHURCH supports obtaining 501(c)(3) status, recognizing that many donors prefer to contribute to organizations with this approval.
Additionally, incorporating and opening a church bank account enhances credibility and transparency. Conducting financial transactions under the church's name rather than an individual's fosters trust among donors.
Step 6: Maintain Your Tax-Exempt Status
While fundraisers are essential, ensure they are not substantial business activities. Unrelated business income can jeopardize your church’s tax-exempt status. Be mindful of the IRS regulations and ensure your fundraising activities align with your exempt purpose.
Step 7: Let StartCHURCH Help You!
At StartCHURCH, we hope this guide has provided valuable insights to help your church confidently and effectively raise funds. Trust in God's provision as you fulfill your calling. If you need further assistance implementing these strategies, contact us at 770-638-3444. We're here to assist you every step of the way on your journey to financial stewardship and organizational growth.
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