How to Handle Year-End Donations, Part 3

By Raul Rivera

Pastor John was in awe of the generosity that many of his congregants had exemplified thus far during the holiday season. Their attitude towards giving had rendered him almost speechless; a feat his wife claimed was nearly impossible. It was because of these benevolent actions that Pastor John was excited to see how the Lord would lead the congregation to give during the church’s annual Christmas offering.

The very first Christmas offering had taken place 5 years ago when Pastor John wanted to implement a practical way to teach his congregation to focus on others during the holiday season, rather than getting sucked into the self-absorbed commercialization of Christmas. He wanted to give his congregation an opportunity to be a part of something bigger than themselves.

The recipient he chose that first year was a local food bank in the community, which provided food for needy families. Not sure what the offering would render, Pastor John was surprised when the first Christmas offering reached $20,000. Each year thereafter, the Christmas offering surpassed the amount from the previous year.

Anticipating a large harvest again this year, Pastor John wanted to use the upcoming Christmas offering to continue supporting the local food bank, but he also wanted to use the offering to purchase a 15-passenger van for a local boys and girls club to use for field trip transportation. Pastor John set the goal for the Christmas offering at $120,000.

He was not concerned that the goal would not be met; rather, he was concerned with what to do with the portion of the offering that would not be put to immediate use. He and the board planned for $30,000 to be donated to the food bank, $40,000 to be donated to the boys and girls club for the new van, and the remaining $50,000 to go towards much needed renovation and expansion at the church.

Because it would be a few months before the renovation and expansion project began, Pastor John did not want to leave the money unprotected and subject to liability.

What’s behind the story

Many churches have year-end Christmas offerings. The end of the year is a great time to finish strong, raising funds to make special donations to other charities, to serve families in need, and, as seen in the story above, to reach a giving goal that will increase your impact in the community.

Yet, with every great blessing comes great responsibility. It is not just important to know how the funds from your Christmas offering will be used, but it is equally important to know how to properly manage and handle such funds.

Planning a large-scale giving campaign

When planning for your church’s Christmas offering, a few simple steps will help make the offering effective and rewarding for your entire ministry.

1. Determine the purpose for your giving.

Habakkuk 2:2 says, “Write the vision; make it plain...so he may run who reads it.”  All things great begin with a vision that clearly communicates purpose and goals so that all who hear it, or read it, may effectively run with it.

Does your church have a goal of planting a satellite location, supporting a local or global ministry, or renovating your current facility? Whatever your goal may be, it is important to clearly articulate the purpose of your Christmas offering. This allows the members of your church and community to effectively support and promote your church’s Christmas offering.

2. Determine the goal for your giving.

Once you have determined how you want the Christmas offering to be used, specify the amount of money that is needed in order to meet those goals. By clearly expressing to the congregation how the Christmas offering will be used, you allow them to connect and relate more to the purpose of the offering.

You will also want to determine when the Christmas offering will take place. Will it be something that takes place throughout the month of December, or will it take place on one particular Sunday in December? Once you have determined that, you want to notify your congregation so that they can pray and prepare accordingly.  Looking at giving trends and past fundraising efforts can help you choose the most effective time to begin.

"Write the vision; make it plain...so he may run who reads it." Habakkuk 2:2

3. Create a marketing plan to consistently prepare your congregation for the campaign.

After choosing your purpose and goal for the Christmas offering, create a marketing plan to spread the word about the offering so that your congregation will be ready to participate and give. This may include video announcements, mailers, emails, postings on your church website and social media outlets, and any other form of advertising that you think would be effective.

4. Establish the proper donations management protocols.

A crucial step in managing large offering campaigns is ensuring that your ministry has the proper systems in place to manage the increased volume of donations that you will be receiving.

As previously mentioned, always be sure to clearly communicate the purpose of the offering with donors, which decreases their likelihood of requesting refunds. Set up teams of people to count the offering(s), with checks and balances to ensure that tithes and offerings are counted and deposited into your accounts without issue.

5. Expect the unexpected.

As we have seen from Part 1 and Part 2 of this series, it is natural to expect the unexpected in donations. Donations of personal property can be a great blessing, but be sure to be armed with the knowledge that allows you to properly handle and manage such donations. In turn, this will allow your members to write off their donations on their taxes.

6. Protect your giving.

Remember the responsibility that comes along with managing such a high volume of resources. When donations reach $50,000 or more, consider establishing a tax-exempt holdings corporation to protect your church’s assets.

The holdings corporation is a great line of defense for protecting the assets of your ministry. Congress authorized section 501(c)(2) to allow tax-exempt organizations (such as your church) the ability to take its assets and put them into a holdings corporation that is owned and controlled by the church. In the IRS's EO CPE text of 1986, the top two reasons for a church to put its assets into a holdings corporation are as follows:

• Limitation of liability from potential damage suits, and
• Enhancement of ability to borrow.

When properly established, the holdings corporation becomes the legal owner of the church’s assets, thus protecting the church’s assets in the instance the church finds itself in the midst of a litigious situation. This is done during a church board meeting when the board members agree to give title of the assets to the holdings corporation.

By placing its assets in a holdings corporation, I believe a church is heeding the words of Jesus when he told his disciples to be “wise as serpents and innocent as doves”.

This is a strategy that we have been teaching at our Ultimate Church Structure Conference for many years now. I want to encourage you to join us at one of our conferences near you, or feel free to give us a call, toll free, at 877-494-4655 if you have further questions about establishing a holdings corporation.

Tis’ the season to be blessed

We have discussed various ways to manage donations this holiday season and throughout the year. The fundamental truth that makes this conversation possible is that God has richly blessed us to participate in His kingdom coming to earth. We are blessed to be a part of the Body of Christ, blessed to labor with Him, and blessed to learn ways to steward what we have been given for His glory. What a testament to the blessing of Christ that makes this all possible.

This Christmas season as you manage the in’s and out’s of donations to your ministry and the various activities you will host to serve and bless your community, remember the great blessing it is to be in the family of God.

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