Questions re Accepting Credit Cards (part 1 of 5)

Churches which do not have online giving often have several questions which hinder them from proceeding. Here are some of the concerns I’ve run into over the past few years:

  • Online Giving (itself)
    • Making financial transactions online has been normalized by society in the past 10 or 15 years. Amazon and other online businesses have made us comfortable with spending money online and using our credit cards on our computers and smartphones.
    • In 2016, our society spent more on restaurants than groceries; in 2015, we spent more electronically than we did using cash and checks. We have moved inexorably into the age of electronic transactions.
    • I predict that by the year 2025 (maybe 2030) we won’t even be using credit cards anymore – transactions will be made using Apple or Android pay or some other electronic financial exchange system which is being created even now.
  • Fees paid by the church
    • All credit cards have fees ranging from about 2.3% to 5% of the transaction. VISA and Mastercard have lower fees while American Express has the highest. Most VISA and Mastercard providers have fees in the 2% to 3% range.
    • Remember that banks have fees on every check and cash transaction they process, albeit about 25 to 30 cents for each one and that is lower than credit card fees.
    • Fees on credit cards is very much a “cost of doing business” in today’s world. Just as every church has a copy machine and air conditioning, fees on credit cards are just part of being “in business” for a church.
    • Frankly, the fees aren’t that much. If a church gets as little as $10,000 in online gifts during the year, the fee for that is about $250 which seems pretty small when weighed against the $10K that came in.

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First Time Donors

Coming to a church for the first time is frequently celebrated. People are encouraged to introduce themselves, provide contact information, and are even given coupons for coffee or food. These are good steps whose goal is to encourage the people to return again and again.

Churches can take another step which is to send a thank you note to all first time donors. The first time someone gives to a church is a big deal. It is one thing to come but it is an even bigger step to pull out your wallet and financially support the church. That action should be acknowledged.

Every first time donor should get a thank you note from a church leader – the pastor, the treasurer, or the church administrator. This simple act will take about 3 minutes per card and cost a dollar or two including postage. But the benefits of that expense will be enormous – people will comment about that for a long time and they will be genuinely surprised and grateful.

Take the time to write a thank you note. It is a big deal.

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A Story about God’s Faithfulness

2016 04-April 12 (13)

One of my clients received this letter from a church member. It is a great example of truly trusting God in everything, including finances.


A few years ago, we attended the church during the tithing challenge. We saw so many wonderful blessings that could only have been the hand of God. Through the years, we would miss church and not tithe for those missed weeks. Even this week, I went into the app yesterday to give and did a smaller amount than usual. I rationalized the reason is so I can give to so many other people at Christmas time. After leaving the service, I knew I was wrong and gave more. I know I can skip a few luxuries to make the budget work, but I didn’t UNTIL I heard the service Sunday.


I type this as a reminder to myself and for you to know, I saw God work in ways that would only be possible through my worship of giving to Him.


Within the first weeks of really tithing, we had a government agency sending bills for months. I would tell them why their bill was wrong. I contemplated paying it because it was “only” a $600 bill and no matter how many forms I filled out, they would send me a new bill the following month with interest accruing. After I was tithing, I received a phone call from the government agency saying they needed some info to process a refund. Seriously, a refund of hundreds of dollars.


My frugal father called and said he wanted to thank me for helping him so much through the years and give me a gift of $500. NEVER would we have expected this!


Small things happened too. Eating out at a restaurant we talked about how God was blessing us and tithing was incredible way to KNOW without a doubt His presence. Within a minute a manager came over and told us our meal was on the house!


I am thankful and truly appreciate the brilliant ways my church has us learn from scripture. God bless you all!


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Stock Gifts (part 3 of 3)

2016 05-May (10)

Several times during the year it is a good idea to place in the Sunday bulletin, the quarterly donor gift statement, or other form of communication a reminder that people can give stock to the church. Below is the bulletin “blurb” which I use regularly.


Many members of (insert church name) donate appreciated stock. They give to the ministry budget, to missions’ offerings, the church’s endowment, or the building campaign. You can transfer your stock electronically to (insert church’s name)’s account by contacting (insert church’s broker) at (insert brokerage name and phone number) or (insert church contact) in the church office (insert church phone number). To give electronically, your broker will need a DTC number (insert number) and the church’s account number at (insert account number).


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Stock Gifts (part 2 of 3)

2016 04-April 26 (9)

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.




Church Administrator


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Stock Gifts (part 1 of 3)

2016 05-May 10 (2)

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.


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IRA Gifts

2016 05-May 31 (9)

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.


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Life-Changing Benevolence

Traditional Benevolence: the church is a collection point for charitable items such as food, clothing, household items, and money to help with other items such as rent and medical expenses. Church members should be encouraged to be generous with their gifts and not just give their leftovers or items they want to discard. I encourage churches to have a regular collection time; this can be monthly, every Communion Sunday, every 5th Sunday, etc. – just pick and stick with something.

I feel there is a much better and more biblically based form of benevolence but it is much harder and far less common in churches. I encourage you to seriously consider this form and decide if your church is doing benevolence to make its members feel good or to have a serious impact on the lives of others. This direction is much harder and requires the church to being a lot more intentional about what it wants to accomplish.

Benevolence That Changes Lives: The church should not be a distribution point for benevolence. Instead, churches should partner with local non-profits who are doing this type of work with excellence (key word).

  • The church can approach these local orgs and offer supplies (food, clothing, etc.), money (for benevolence and even for operations), and volunteers (church members who want to help others). Every non-profit you approach will jump at the chance to get more of these resources.
  • An understanding can be reached between the church and the org regarding overt/covert evangelism (you’re not asking my opinion but I suggest that church volunteers ONLY raise that subject if they are asked why they are doing that – the door is then open for a positive reply without shoving Jesus down someone’s throat).
  • This method allows recipients to go to places in an area of town they are more comfortable with than having to walk into a church (which is intimidating to non-church folk). This makes church members get out of their comfort zone (their church) and into the area of town where they aren’t comfortable but where the hurting and needy are located – church members need to suck it up and get over their fears. After all, Jesus went out to the highways and byways and didn’t wait for people to come to him (though many did).
  • This method allows a church to partner with an org that is far more skilled at distributing resources and determining who are the scammers and who are the truly needy. The partner org most likely has a database where they keep track of who has been helped, for what purpose, and how often.
  • This allows the church admin assistants (the first point of contact for many recipients) to focus on their work instead of answering the phones. And frankly, some of the needy can be scary (though almost never dangerous) and that can affect the work product of the church’s admin(s).
  • If more and more churches would partner with local orgs, the chronic needy would know where to turn for regular help (instead of going from church to church) and those orgs might be able to offer additional services such as job training and placement (to address long-term needs, not weekly needs).

I will say up front that moving your benevolence offsite gives less “glory” to your church and your members might complain about that. However, this is not about meeting the church’s needs but about helping others. God gets the glory (period). It’s not about us – it’s about us being servants to help others.


Lead On!