My neighbor, Rick, loped up the driveway the other day and after a couple minutes of chit chat he said, “Hey I need to get that edger off of you this afternoon.”
Now I don’t mind lending out my tools. Rick’s earned a reputation for taking care of stuff he borrows and prompt returns, but I was a bit taken aback from his, well, his informing me. I’m sure in his mind he asked to borrow the edger, but he really didn’t. Perhaps by definition a question requires a question mark. I would have appreciated something along the lines of , “Could I borrow your edger?”
For the record, Rick left with my edger, I didn’t mind lending it to him and predictably it was returned quickly. All’s well that ends well.
Some 20 years ago I was in a seminar led by the legendary fund raiser Jerry Panas. He was adamant that every ask needs to be an ask. And an ask has to have a question mark. If there’s no question mark, there’s no ask.
As you plan your fall stewardship work, I encourage you to check for question marks.
Here’s the thing about a question. At least in theory there are two reasonable answers: Yes or no. This terrifies Finance Committees. What if you ask a generous tither to renew her pledge and she says “no?” Then I say there’s a good chance she would have anyway. But if you look at it from her point of view, you’re giving her the courtesy of acknowledging that what she does or doesn’t give is up to her. And the better she feels about giving it, the more likely she is to continue to be generous.
Have you ever been backed into a corner by a pushy salesman? There’s a good chance you have and an even better chance that you never went back there again.
So make the ask, use a question mark and invite, rather than demand, your people provide your church with the financial support it takes to change the world.
You just might be surprised by the response.
Gift annuities have always been attractive for donors. They offer a great win-win, with individuals receiving a guaranteed income for life and their churches benefiting at the end of the donor’s life.
Here at the Foundation we manage about 45 annuities totaling more than $580,000.
Effective July 1, we will increase the payout rate for new annuities. This comes at the recommendation of the American Council on Gift Annuities. Charities with ethical gift annuity programs follow the ACGA rates.
The benefits go beyond attractive payout rates. Most of the income is free from taxes: federal, state and local. Donors get a tax deduction for about 40-60% of the value of the annuity, and the security of knowing the rate is locked in, regardless of what happens with interest rates, the stock market or other investments.
But the key is that an annuity is a great way of supporting the church’s mission in a very simple, straightforward way that is relatively inexpensive to administer. And with the Foundation’s minimum annuity of just $10,000 this can be a great tool for so many of your members.
Below is a sample of gift annuity rates after July 1:
If you haven’t discussed gift annuities or planned giving with your members, this may be just the perfect excuse to do so.
Your members who may be interested gift annuities should start with these resources:
Click here to personalize a gift annuity illustration. Click on “Personalize this diagram.”
In the last week or so, stock markets have seen significant volatility, or change, and it has folks worried. Stocks dropped about 6% early in the week. Does a bad week make Chicken Little correct, maybe people wonder.
The chart above is a great illustration for times such as these. It was provided to me by Wespath Investment Management, our investment partner, based on data from Morningstar, a firm that does research in this area. You can see a full-sized version of the chart here.
The blue bar for each year shows the annual change in the S&P 500, which tracks 500 of the largest domestic stocks. For 2017 it shows an increase of 21.8% and in 2016 an increase of 12%.
But then look at the gold triangle for each year. This compares the largest drawdown, the highest peak to the lowest point, of the S&P 500 during the year. In 2017, the largest decline was just 2.6%, compared to 2016 when the index declined 10.3%.
I think it’s extraordinary that in a year of such significant growth as we saw last year, that the downside volatility was so low, in fact the lowest in 20 years or more.
And when you compare the 6% or so that we saw the market drop this week to previous years, we are well within reasonable ranges. The average for those 22 years is an intra-year decline of 15%. Further, among the years that the Average finished on the positive side the intra-year decline is still more than 11%.
Please do not take this as a promise that the we will not see another drop this year or even that the drop will be significant. These are the realities of investing.
But I am saying to you that volatility is a very natural part of the investment process, one that lulled us to sleep last year only to wake us up with enthusiasm within the last week.
For the year, 2017 was remarkable in the investment markets, with both stocks and bonds performing well.
The Foundation’s investment options as of December 31, 2017 are summarized below:
COMPARISON OF RATES OF RETURN AS OF DECEMBER 31, 2017
|1 year||3 year||5 year||10 year|
If your church is still living off of CDs this may be a great illustration to get a new conversation going. What we offer certainly has risks associated with it and may not be right for every church.
But regular readers of this blog know that I’m not concerned with the amount of money in a fund but rather how effective it is as a tool for ministry. Simply put, a fund that made 21.25% last year provides ministry options that a CD under 1% doesn’t.
I generally recommend a 5% spending policy, which can be calculated a number of ways. But any of our options provide that 5% with plenty of extra growth to absorb periodic losses.
If this is a conversation you’d like to have, contact the Foundation Office to set up a time for us to meet with the leaders of your church.
And now for the fine print:
First, let me acknowledge that this is horrible timing. The last week of Advent is probably the worst time of the year to discuss tax-wise giving, but I strongly encourage you to share the information below with your congregation this week. I don’t suggest re-writing your Christmas Eve sermon to discuss end of the year tax strategies (but if you do, send me a copy; I’d love to read it), but perhaps you can put the following in your bulletin, email it to your members or put it on your church social media page.
Please don’t mess with the technical information, but certainly feel free to adjust the third and fifth paragraphs to discuss the various options for generosity in your particular congregation.
New Tax Laws Provide an Opportunity
New Tax Reform Legislation raises the standard deduction for income taxes beginning in 2018. The Congressional Joint Committee on Taxation estimates that the number of taxpayers who will itemize their deductions in 2018 (and thereby get tax savings from charitable gifts) will fall from 40 million under current law to just 9 million under the new legislation.
If you currently itemize, and are financially able to do so, consider giving some or all of next year’s gifts to the church before the end of this year. You can claim your gifts on your 2017 taxes (due April of 2018) and give the church a boost.
This can be done for regular offering, or for special gifts such as for a capital campaign or endowment.
To qualify, the gift must be made by the end of this year, given in worship on or before December 31 or postmarked no later than December 30. The check should be dated in 2017 and indicate on the memo line “2018 offering” or other designation.
When in doubt, reach out to the church office to clarify your intentions.
They say the greater the need the greater response. Right now the need in and around Houston is beyond comprehension and is matched only by the desire for folks to respond. Here are some ways to help:
Pray. Pray for those who are no longer in their homes. Pray for those who are home with no way of getting out. Pray for the police, the firefighters, the National Guard soldiers, the volunteers who are helping. Pray for the government officials who are tasked with prioritizing many urgent options. Really, just pray.
Give. The United Methodist Committee on Relief (UMCOR) is a remarkably efficient. Two of the things I love about UMCOR is that all overhead is covered through One Great Hour of Sharing. That means every nickel you designate for Harvey Relief will be spent directly on this cause. The second is that UMCOR stays around. The CNN trucks will be gone from Houston in just a couple of weeks, but UMCOR will have a United Methodist presence for the long term. After Katrina the group was there for seven years, working well beyond most other organizations. Use this link to give directly to UMCOR for Disaster Response in the U.S.
Refill supplies. United Methodists are known for our flood buckets. I had the opportunity to be in Bay Saint Louis, Mississippi shortly after Katrina hit. I saw UMCOR at work and I saw flood buckets (now called cleaning kits) being distributed to very grateful residents. Fortunately flood buckets are already on the way to Houston from the UMCOR Sager-Brown Depot in Louisiana. This can be a great time to get your church packing flood buckets to replenish the warehouse in anticipation of the next time they are needed. You’ll find more information about flood buckets here.
Come and help, but not right now. I know there are those of you just itching to strap on your tool belt and start helping to demo then rebuild all the houses you can. That’s a great idea, but this isn’t the time. Save those plans for the first part of 2018, once things are organized and safe. The next few weeks or even months will be far more about caring for people than it will be about fixing homes. The best way to keep up with what is needed is by following the Rio Texas Annual Conference on Facebook.
Train for the future. If you want to be better prepared to lead a group, consider attending Volunteers in Mission (VIM) Team Leader Training September 23 or November 4. You’ll find details on the East Ohio Conference Website.
But there are a couple of things not to do. Don’t send stuff. Donations of things like clothing, stuffed animals, toys or building materials require someone on the other end to receive it, catalog it, store it and distribute it. There may come a time when they ask for things like this, but that will be a while. Even things that are needed, such as bottled water, are better off being purchased through UMCOR and distributed. By the time you buy it and ship it, the effectiveness of your dollar is greatly diminished.
Finally, share this post. UMCOR is a great system but is often over shadowed by organization with better PR functions. Let folks in your circle understand that your church is at work in this area and that anyone can support the cause, no matter what they do on Sunday mornings.
One of the great advantages of our connective denomination is that we have structures and systems in place for folks to help from thousands of miles away. Whatever your abilities, plug in as you are able and help be the hands and feet of God in an area where that help is so desperately needed.
Politician Everett Dirksen is often quoted, “A billion here, a billion there, pretty soon, you’re talking real money.” But what about trillions? Like $10.7 trillion? That’s $10,700,000,000,000. Americans had $10.7 trillion in their checking accounts at the end of last year, an average of about $3,600 per account, an increase of about $1,000 over the last ten years. All of this according to the Federal Deposit Insurance Corporation study released last week.
All of this totals 77% of all bank assets. More than three-quarters of what is in the bank is is in checking accounts, providing great liquidity but not doing much of anything to grow through interest.
I got a call from a pastor last week telling me that he discovered his new church has $86,000 in the checking account. He thought that seemed kind of high. I agreed with him.
How much is in your church’s checking account? A while back I wrote about how to best guess how much you needed to have available. But today let’s look at the opportunity cost of having that much in your checking account.
So we’ll start with the assumption that the church needs something in the checking account on an ongoing basis, say $30,000, one month’s expenses for this particular church. That leaves $56,000 to invest. What will that mean for this church?
Year to date our equity fund has returned 18.7% net of all fees. It would be a great advertisement for me to show how consistent returns at that level can help a church’s bottom line but the reality is that although I am grateful for those kinds of income they’re really not sustainable. Instead we’ll go with the five-year average on our balanced fund, 7.7%.
If we take that $56,000 and earn 7.7% each year, that’s $4,300 per year. Some years that will be more, some will be less, but that is an average. For a church with a budget of $360,000 this doesn’t seem like a huge amount. It won’t add a bunch of staff or replace the aging boiler, but I wonder how many members of this church give more than $4,300 per year. Simply by investing and taking a reasonable payout, this church just added another top donor to its rolls.
That $4,300 could provide seed money for a new outreach ministry, paint the walls in the Fellowship Hall where the youth group meets every week, send kids to camp or provide seed money for a mission trip.
With the benefit of being able to expect a comparable return year after year.
I often hear that the church “can’t be too careful with money that isn’t ours.” I agree but you need to not only consider the investment risk but also the lost opportunity. Would you really tell a donor who offered you $4,300 that you don’t need the money? If not, why would you tell that to your checking account?
Four thousand here, four thousand there, pretty soon, you’re talking real money.
I had one of those weekends when apparently divergent messages come together and it all just kind of clicks. On Saturday my daughter Emily was wearing a t-shirt with the graphic above, the one that encourages us to Believe There is Good in the World and at the same time to Be The Good.
Then on Sunday I read an article in USA Today about the State of Hate in America. The article talked about a KKK rally Charlottesville, Virginia, where about 50 Klansmen came from out of state to protest the removal of a Civil War era statue of Robert E. Lee.
Be The Good vs. Be The Hate seems to be a common thread in our society these days.
I read a bit further into the USA Today story and learned that along with the 50 protesters that day were about 1,000 counter protesters. While it’s impossible to know the motivations behind everyone there, it would appear that in the face of hate 20 times as many people chose to be the good.
By my estimation good won.
Groups like the Southern Poverty Law Center and the Anti-Defamation League suggest that hate crimes are up about 6 percent over a year ago. I wish that wasn’t so, but neither or nor the Church can stop these from happening. Just as no one could stop the Klan from coming to Charlottesville.
But we can decide how we are going to witness in such a time. How do we as a church respond in such troubled times?
Especially when so much of that same division is happening under our own tent?
The answer, according to that t-shirt is to be the good. Cause you know what, we should be doing that anyway.
When is the last time your community saw your church Being The Good outside your building? I think this summer is the perfect time for you to feed people, help people, encourage people. Whether you’re counter protesting hate or handing out a cold bottle of water along your town’s parade route, go out there and be good. Go out there and Be The Church.
Call the Urban Mission in Steubenville, the Nehemiah Mission in Cleveland or the United Methodist Community Center in Youngstown and ask them if they have people that your church can show some love to. I bet the answer is in the affirmative.
Read Matthew and figure out who in your community is the Canaanite Woman, the Boy With the Demon, the thousands who needed feeding.
Then go be the good, the good that these individuals need, the good that your community needs to be and, quite frankly that you need yourselves to be to truly call yourselves Disciples of Christ.
I’d love to read in the USA Today an article about the State of Love in America.
When I work with churches to set up or revise their endowment funds, I usually suggest a 5% spending policy: take the value of the fund on September 30 each year and make 5% of that available for the following year, or some similar formula.
I think this is the best approach, except when it isn’t.
You may want to consider a 25% spending policy sometimes.
The 5% rule works because long-term you should expect to make a bit more than 5% on your endowment fund, so if the market is good and you make 8%, spend just five. But in a bad year if it makes 3%, still spend five and know that it will all even out.
The good news is that this way the fund should last forever, as all good endowment funds should do. The problem, of course, is that if you have $1,000, you only get $50 each year. Spending 25% can be far more fruitful than spending a fifth of that.
Clearly this is best done with something other than a formal endowment fund. If you have a fund that allows the principal to be used for new programs, or special priorities in the church, it can be far more effective if it is used heavily, but for a shorter term.
I’ve always been hung up on the phrase “A ship in harbor is safe, but that is not what ships are built for.” Too often we are more concerned with a fund lasting forever while the church around it is failing.
If you can spend a fund a bit more aggressively and have it positively impact the future of your congregation and its ability to reach the community as a mission outpost, then I say that money is well-spent.
And I always go back to the best marketing for your fund is for people to see it in use, let them understand its role in your ministry. By showing that a special fund invests 25% of itself in Kingdom Work every can help foster donations from those who want to see that ship leave the harbor.
But a couple key points:
As always, if you want to talk such a program through, please let me know.
I recently read a book that should be required reading for any good Methonerd like myself. Reverend Will Cantrell has written Unafraid and Unashamed: Facing the Future of United Methodism. It’s a really, really good book discussing the human sexuality issue in the church.
At just 150 or so pages it’s a fairly quick read and brings in what I assume are accurate discussions of scripture, the history of the issue in the church and an honest, accurate summation of the three key sides in the conversation: traditionalists, progressives and centrists.
He speaks of Nineveh, a broken communion chalice in Pittsburgh, and Moses taking advice from Jethro.
My favorite quote:
if we approach diversity with fear, we will reach a predictable outcome. We will continue to accuse those who see things differently as ruining our denomination. We will befriend and dialogue with only those who agree with us. We will think of those with different viewpoints as something less than Christian, and less than intelligent. We will approach all denomination decisions with the intent to acquire the maximum amount of power for those who share our point of view. With fear guiding us, a schism is not only probable, it is assured.
Maybe you read that and thought, “Yes, he clearly agrees with my side.” But in this masterfully written book you will notice that he takes no sides, offers no fodder for proving that WE are right on this issue and THEY are wrong.
Instead he challenges to see through the issue and focus on us remaining united. You know, like A Way Forward.
At a time in our society when two sides can’t talk about anything Rev. Cantrell calls us to be above that, to be people of faith and courage, to exemplify scriptural holiness.
The battle for the soul of United Methodism will not be fought against other United Methodists of differing perspectives… It will be a struggle between the power of fear and the power of faith.
You can pick up a copy from Amazon for about $17. Spend a few hours with it, then a few more discussing with others in your circle. I ordered it thinking it would be great for a church-wide study but instead think it’s a great conversation starter for those already aware of the issues facing our church.