Year-End Giving
Year-end is a time of giving, from God’s greatest gift of the Christmas child, to families giving thanks during our nation’s Thursday holiday; from the wrapped gifts placed under a freshly cut pine tree, to the shoebox gifts shipped to children overseas; from the year-end bonuses given at the workplace (hopefully!), to the tax break “gifts” received for timely year-end contributions.
Churches have a unique role to administer gifts of contributions that generally reach their largest volume during this season. Here are a few tips to steward year-end giving and maintain a spirit of thankful joy in the process.
Pastors and Administrators
Ephesians 4:16 tells the Church, “We are being fitted and held together by what every joint supplies, according to the proper working of each individual part.” Whether you are your church’s business administrator, director of finance, payables accountant, or Monday-morning volunteer contribution counter, your role is critical to the overall mission of the church. And, as with riding a tandem bicycle, when the administrator is in sync with the pastor of the church, that mission goes smoother and further. So are you in sync? If not, take some time and communicate the critical roles that you each play in both pastoring and administering year-end giving. Begin now to be fitted together by what you jointly supply.
Year-End Cut-Off
Communicate with your members and staff clearly and early in the season about the cut-off policies and
procedures for year-end giving. Do your members know the cut-off day, time, and place for your church
to receive year-end gifts? Does your church staff know the IRS cut-off rules for what constitutes a 2022
contribution versus a 2023 contribution? Gifts must be received in-hand by the church or postmarked
before midnight January 1, 2023, in order for those gifts to qualify as 2022 contributions (and online gifts also must be date “stamped” similarly). Have you talked with your staff and your online-giving administrator to ensure that your personnel and systems are robust and ready to handle the higher volume of giving and year-end cut-off? To avoid confusion and disappointment, consider how you can utilize the pulpit, bulletin, newsletter, Facebook, website, or a combination of these to communicate clearly with your members well before year’s end. Don’t keep these year-end giving policies secret — recognize them as strategic, both to the mission of the church and to the personal taxes of donors. The last thing you want to hear is members or staff say on January 2, 2023, “. . . I meant to give you my gift last week, but I forgot . . . ,” or “. . . but I was on vacation . . . ,” or “. . . but you never told me there was a year-end cut-off rule . . . .”
Communicate your church’s and the IRS’s policies well in advance to leave them no excuse!
“A gentle reminder: the date on the check or the size of the gift does not determine the year in which a contribution is received. Year-end cut-off is a policy matter, not a personnel decision. Protect your staff from unnecessary challenges from donors who may not give in a timely fashion. If a gift is received in the new year but is not postmarked before December 31, 2022, then it is a 2023 donation. Period. This is a legal matter and is not open to interpretation. Clear, upfront communication will protect your staff, church, and donors. ”
Donor Designations: Restrictions Versus Preferences
Remind your staff and members that there is a significant difference between donor “preferences” or suggestions — which are NOT restricted — and donor restrictions, which are. Whether or not a gift is restricted will depend largely on your gift acceptance policy and what is communicated between you and your donors. If your church has donor-restricted funds or plans to start a new fund, make sure to educate your members about the church’s approved donor-restricted funds. Be careful, especially at year’s end, not to receive a gift that is restricted by a donor for a purpose that is not within the mission of the church. As a general rule: do not accept a donor-restricted gift unless the church has previously approved and established a fund for that purpose. If, on the other hand, your church does not accept any restricted gifts, then openly communicate that policy. In this case, you could still remind donors that they may preference a gift by suggesting that it be used, for example, for the Christmas pageant or the food pantry. Ultimately, however, unrestricted gifts are used at the discretion of the church and could be directed instead to “where needed most.” (See the “Banknotes” column in the August/September 2015 issue of CO+OP Magazine for more insights into designated giving.)
Non-cash Gifts
Matthew 13:44 reminds us of the value of the Kingdom of Heaven to him who found it in a field: “From joy over it he goes and sells all that he had and buys that field.” The joy we receive in Christ moves us to exchange worldly possessions for heavenly treasure. Therefore, be prepared and careful when receiving non-cash gifts from those who are going “all in.” The IRS requires special reporting for most non-cash gifts. As a general rule, the church should acknowledge receipt of non-cash donations, but the dollar value should not be stated (it is the donor’s responsibility to determine value). This includes stock donations: only send the donor acknowledgment of the number of shares and the date received, not the value. If the non-cash gift is a vehicle, boat, trailer, or similar, be extra cautious. Such gifts require additional reporting to the IRS. For example, if a donor completes IRS form 8283 for a non-cash car donation, the church will need to sign the form to acknowledge receipt. In addition, the church will need to file IRS form 8282 if the church subsequently sells the car. Depending on your specific circumstance, consult with your CPA to ensure that you complete the appropriate legal forms. As an alternative to receiving a potentially complicated non-cash gift, encourage your donor to sell the item first, and then to donate the proceeds to the church. Sometimes the reason donors give large non-cash gifts is because they don’t want the hassle of selling the item themselves! Don’t receive any non-cash items that are more trouble, or risk, than they’re worth.
The Largest Gift
May God bless you and your church through this season! And regardless of whether your church receives the largest gift of two small copper coins — or a surplus of donations much less (see Luke 21), may you know the riches of His grace (see Ephesians 1), which He lavished on us, the Church, “the fullness of Him who fills all in all.”
— Ashley Voss
(Originally published in the NOV 2015 Magazine)