In the past couple of weeks, I have received several questions about planned giving. Most of the questions have come from lay leaders who want to begin a planned giving program in their congregation. More specifically, I have been asked about the parameters of authority and responsibility.
Here’s my take on the issue.
The size of a congregation determines how planned giving is approached. Ideally, two standing committees are formed. The planned giving committee establishes planned giving guidelines and seeks donations. The endowment fund committee develops and manages the endowment fund by:
- Encouraging, accepting, and acknowledging gifts (if there is no planned giving committee).
- Ensuring that restricted gifts are honored and properly recorded.
- Arranging for professional accounting of the funds.
- Reporting on fund activities to the governing body.
- Making prudent investment decisions.
- Administering the distribution of funds.
- Ensuring appropriate checks and balances regarding control of the funds.
Small congregations may not have enough human resources to create two committees. In that case, the planned giving committee is responsible for all the tasks identified above. In a congregation of seventy-five members, for example, a few committed and knowledgeable volunteers may be able to both create and implement a planned giving program and manage an endowment fund.
When forming a planned giving committee, five to seven volunteers are sufficient. Ideally, each volunteer serves a three-year term, using a staggered appointment schedule that guarantees continuity from one year to the next. Good candidates are those who have been active congregants long enough to know potential donors. They also need a working knowledge of planned giving.
Planned giving is a form of stewardship. The planned giving committee is a group of three congregants who are the fiscal agents for assuring a healthy long-term financial future. These volunteers are obligated to develop a plan that will protect the financial rights of the next generation of congregational members. It is also imperative that all planned giving committee members lead by example and make their own planned giving donation to the endowment fund.
Whatever organizational structure is created, using one committee or two, develop specific lines of responsibility and accountability. Provide for a clear and simple separation of power. Institute controls that demand more than one set of eyes and hands for accepting gifts, managing investments, recording donations, and spending endowment funds.
Define the interaction of the planned giving committee (and endowment fund committee, if there is one) with the governing body, the treasurer, the finance committee, the annual budget drive committee, and any other relevant standing committees of the church. It would be wonderful if congenial relationships could be guaranteed among these groups. But at some point, conflicts are almost certain to arise. The most common situations are ones in which the governing body wants the endowment fund committee to release funds to balance the annual operating budget or to solve a pressing facility-related, deferred-maintenance need. Personal relationships can be strained when the endowment fund committee objects to or even refuses the request.
Ultimately, the congregation controls the endowment fund. Create bylaws to clearly indicate that control. Create enabling resolutions indicating that endowment funds can be used only as designated by donors. Any exceptions are subject to a congregational vote, with a significant majority required to approve any exception.
Ask the planned giving committee and endowment fund committee to report once each quarter to the finance committee, the governing body, or both. They should also report to the congregation at least once a year.