Look back at Prof. Sargeant’s surveys. Two of the main reasons people gave for leaving a charity were a) the charity didn’t make clear to them how the donations were being used, and b) they felt the charity wasn’t honoring their wishes. Those are trust failures.
Again, respect and value the donor. Your church needs to do two things to gain and keep that donor’s trust:
- Honor the intent behind the donor’s gift.
- Show the donor how the money is being used.
These two points are where the speaker in that college chapel lost me.
And, since I’m a developer and support rep for a church management/accounting software company, it’s at these two points that I have the most experience helping and guiding churches.
8. Honor the wishes of your donors.
You need to spell out clearly to donors the purpose for their donation, and then you need to stick to it. If there’s any reason that you need to change the purpose, you need to be transparent with your donors about it.
It’s a matter of good faith and good stewardship. Misuse of funds is a common problem, and donors can get uneasy about your project if all they see are “random faint glows of follow-up information.” Instead, they should see the inner workings of your project’s finances. They should see that you’re honoring what you told them to start with. It will help you gain their trust. Also, stepping back to our first theme, it will motivate them to give when they see specifically how their donations are helping.
And that brings us to our last point.
9. Report clearly to donors the church’s and project’s operations and financial state.
At the outset of a capital campaign or a special fundraising project, the organizers need to be able to answer basic financial questions.
- What is the fundraising goal and the deadline for reaching it?
- How is the money going to be saved? (checking account, savings, some sort of investment)
- If donations are going to be deposited in the same asset account with other church funds, how is the money going to be designated (or set apart) and tracked?
- How is the money going to be spent? What expense accounts will you use and what are your projections for them?
- What if not enough money is raised? Will money be transferred from another fund?
- What if too much money is raised? At what point is money from the designated project fund available for other uses?
As your project progresses, report on its finances often and with transparency. You should be able to not just tell donors how much money has been raised, but answer questions like these:
- How has the money been spent?
- How much money is currently available in the fund?
- Are there any debts the project has taken on, and what is the total of that debt?
- If there is debt, what is the project’s current net worth (assets-liabilities)?
For-profit accounting gets complicated and nonprofit is much more so. Depending on your project and how complex your church’s finances are, keeping good track of designated funds can be kind of mind warping. It can turn into a game of tag-team 3D chess, or maybe group juggling with different size wiffle balls on a breezy day while whistling “Flight of the Bumblebee” backwards. (Throw in balancing over a crocodile pit because, let’s face it, the stakes for messing this up can be pretty high.) Find the tools you need. Modern accounting software designed for nonprofits can make things immensely easier.
The Church-donor Relationship
Work with your donors to cultivate a shared vision for your church.
Communicate with them.
Show them what you’re doing with their gifts.
Listen to them.