By William High
Imagine that if on a typical Sunday your offering plate was loaded down with gifts of cars, boats, RVs, timeshares, jewelry, gold coins and stamp donations. First, you might be tempted to think that your staff was going to run for their lives. On the other hand, imagine if you had an easy way to process those gifts.
Giving is going in the direction of non-cash, especially online. Most Americans give cash — 80 percent or more of all giving is in the form of cash. On the other hand, the vast majority of the wealth of Americans is in non-cash assets.
Assets include homes and cars
In the latest data (Giving USA, 2003) on non-cash giving, Americans gave nearly $37 billion of non-cash assets, including $5.8 billion of real estate, $2.3 billion of vehicles, and $3.5 billion of other miscellaneous assets. These non-cash assets additionally include things like vacation homes, rental real estate, collectibles, sports memorabilia, antiques, art, royalties, patents and classic cars. The gifts can also be incredibly complex, such as closely held business interests (LLC, S corporations and C corporations).
Business inventory is one of the more interesting gifts of non-cash assets. On any given day, literally billions of dollars of inventory will go to the landfill. This inventory includes things such as overstock or excess inventory, scrap inventory, non-conforming inventory and farm equipment.
Churches can convert these non-cash assets to cash. For example, a businessman bought a nearby building so he could expand his business. It turned out, however, that the building was loaded with restaurant equipment and he donated it to his church. The equipment was sold and produced cash for the ministry. The best part of it is that the ministry never touched the inventory.
Significant tax savings
In another instance, two business owners donated a shopping center to a church. The gift produced significant tax savings for the owners, but equally important produced significant benefit for the church. While the property was in the process of being sold, the church received the income from the property and ultimately the sale proceeds upon the sale of the property.
The key to taking in non-cash gifts is to first make sure you have the proper expertise. It’s also important to have the mindset to liquidate the gift and not hold on to it. It is also important to note that not every non-cash gift can be accepted. Sometimes givers just want to unload unwanted items. Similarly, if the giver has a strong sentimental attachment or an inflated value of the gift, don’t accept it; understand what to accept and what to decline.
In realizing the great opportunity of non-cash gifts, the crucial decision is to get started. The next critical decision is whether you’ll try to accept these gifts on your own.
There are four keys: (1) Web site presence; (2) brochures or communication pieces; (3) regular communication with the congregation about this opportunity via e-mail, bulletins or newsletters, and (4) direct discussions with groups of people. The Web site presence allows for the gift opportunity to be communicated in a simple way.
Elect to outsource
Most churches elect to outsource these non-cash gift functions. By outsourcing, a church can offer the gift opportunity and receive the benefit of the liquidated gift. But more importantly, the church can take in these kinds of gifts without having to allocate additional personnel. Plus, many of these gifts require special expertise.
An additional key is to recognize that by offering non-cash gifts, there are significant benefits to donors. The tax law allows donors to give 30 percent of their adjusted gross income in the form of a non-cash gift. Additionally, a donor may give yet another 20 percent of cash for a total deduction of 50 percent of adjusted gross income. A giver with an income of $100,000 may contribute $20,000 of cash and still yet another $30,000 of a non-cash asset for a total deduction of $50,000.
Finally, it’s important to recognize that in turbulent economic times many church members may find themselves cash strapped but asset rich. By offering the asset gift opportunity a church can continue on with its mission.
William High is the founder of iDonate.com and the president of the Servant Christian Community Foundation, Olathe, KS. [servantchristian.com]