When stock is donated, it must be acknowledged by the church. It can be posted on the person’s giving record so that there is permanent record of the gift. It is also an excellent practice to send the donor a separate letter with the details of the transaction. Below is a sample letter which I use regularly.
Mr. and Mrs. John Smith
1234 Maple Ave.
Hometown, US 12345-6789
Dear Mr. and Mrs. Smith:
Thank you for your contribution to Grace Family Fellowship. Your gift of stock was:
Name of stock:……………………………………….. Apple, Inc. (AAPL)
Number of shares:………………………………….. 25 shares
Date of transfer:…………………………………….. January 3, 2018
Stock high on date of transfer:…………………………… $412.50
Stock low on date of transfer:……………………………. $409.00
Average value per share on date of transfer:………. $410.75
Total value of contribution:…………………………… $10,268.75
Fund contributed to:
- 2018 Operating Ministry Budget
The date of transfer is the date on which the stock was transferred to Grace Family Fellowship. The IRS requires that stock gifts be valued at the average of the high and low of the stock on the date of transfer. Grace Family Fellowship sells all stock gifts immediately. The cost of the commission and fees related to the sale is netted from the value of your gift.
For IRS purposes, I must inform you that the gifts contained in this letter are based on intangible religious benefits. You did not receive any goods or services from Grace Family Fellowship for this contribution.
Thank you again for your gift. Your continued support of the ministries of Grace Family Fellowship is greatly appreciated. If I may be of further help please let me know.
Virtually all stock in the US is common stock. There are lots of other kinds of stock (preferred, private, etc.) but common stock is typically what is traded on the major stock exchanges. Almost all stock is now held in “street accounts” or an electronic account in a brokerage. Paper stock is available but it is cumbersome to transfer so most people use electronic stocks. For purposes of this post, stock gifts include mutual funds.
Stocks which have increased in value since their purchase are an excellent way for members to make gifts to their church without incurring tax consequences. Churches can accept paper stock gifts without having an account with a stock broker. However, only brokerage firms with selling rights in a stock exchange (think NYSE, New York Stock Exchange on Wall Street) can sell the stock. Churches without an account with a broker cannot accept electronically transferred stock from a member’s street account.
Churches which may get stock gifts should be pro-active and establish a brokerage account. This will require the authorized body of the church to approve a required corporate resolution (the wording is provided by the brokerage firm) which authorizes specific people in the church to sell stock. Typically the people who are named on the resolution are the church’s treasurer, chairperson of the Finance Committee, and the staff person responsible for the church’s finances.
Once the account is established and the resolution is approved, then the church can accept and sell donated stock without much trouble. All stock gifts must be acknowledged by the church and there is a specific way to value stock gifts.
Staff org charts are absolutely necessary. Every organization, including churches, must have an up-to-date org chart. These charts help all staff (and non-staff) understand who supervises who, where the buck stops, which department has which personnel, and so many other questions. And, as organizations grow and change, the org chart must do the same, too.
Ideally, the church leadership will think about three to five years out and dream about what staff is needed to accomplish the mission and vision of the church. Then, they will put in a timeline of which staff person to hire in which order (as budget funds are available). This planning helps keep the staff and personnel committee focused on its goals and using its people resources to reach those objectives. This is called strategic planning or a strategic org chart.
However many orgs, especially churches, fail to do this. Instead, the leadership reacts to complaints and requests from members who want to have a staff person to take care of a specific ministry area (usually the one the member cares most about). And too often the personnel committee and/or pastor will acquiesce and make that new staff person a priority even if it has nothing to do with the church’s mission and vision. This is called an organic org chart (it is also called a disaster).
Org charts must be intentional and well-reasoned. Otherwise, you may end up with an org chart in which the senior pastor has 10 or 12 people reporting to him; those org charts have the appearance of being a circus tent (which may be appropriate). Make sure your org chart looks well-planned and not like it was created by the monkeys in the circus.
In December 2015, the US Congress made permanent a tax break that benefits older donors: the ability to gift to a charity funds directly from an IRA (Individual Retirement Account). There are several rules for this:
- Donors must be 70.5 years or older
- IRA gifts cannot exceed $100,000
- Gifts must go to a 501(c)(3) – FYI: the IRS considers all churches in the US to be 501(c)(3)s.
There are some interesting nuances to IRA gifts:
- The IRA transfer does not show up in the donor’s income but it does meet the mandatory RMD (required minimum distribution) of IRAs
- The church must provide an acknowledgement letter to the donor but the IRA gift does not show up on the donor gift statement from the charity. The reason is that because this IRA amount doesn’t show up on the donor’s Form 1040 under income, it can’t show up on the Form 1040 as a contribution (this prevents double-dipping).
- Checks sent to churches from an IRA sometimes do not have the name of the donor on it. The church will need to research who the donor is in order to send an acknowledgement.
- This gift will benefit some donors more than others. Thus, it is in the interest of the donors to consult their tax or accounting professional to determine if this will help their individual situation.
Churches will be wise to encourage IRA gifts from eligible donors. The following text can be included in the Sunday bulletin during the year.
- The IRS permits people to give from their IRA (Individual Retirement Account) directly to the church. This transfer can be a significant tax advantage. Please consult your tax or accounting professional to see if you should make a gift from your IRA to the church.
- Parents want to know their children are safe – volunteers need to explain the safety (a better word than “security”) measures in place. Print up a card explaining the details – what to do when you drop off your child and how to retrieve your child. The Welcome Desk volunteers can explain these details en route to the classroom.
- Names are powerful – guests will notice as they walk with their Welcome Desk volunteer when she greets passing members by name. It says a lot that these volunteers learned members’ names and greets each one by name.
You get the idea. If you don’t, then ask a fellow administrator to visit your church as if for the first time and give you a report with this checklist. Don’t shoot the messenger – she’s trying to do your church a favor by giving guests a great first impression of your church. After all, you only get one chance to make a first impression – make it count.