Mr. Jefferson walks with you outside to look at his 1995 Oldsmobile Cutlass Supreme. You did not expect to see Mr. Jefferson today, and certainly did not expect him to donate a car to the church.
The car looks like what you expected. The exterior is speckled with rust spots and the paint is faded by the outdoor elements. The mileage is high and the tires are bald.
“Well, she is all yours. I am not sure how much you can get for it, but I’m sure it is worth something,” Mr. Jefferson says with a proud smile.
And the smile is genuine. He is excited to gift the car to his beloved church. In his mind, he is living generously, forgoing potential sale proceeds for the sake of the church.
He holds out the keys, waiting for you to take them. What do you do? Do you accept the gift?
Non-cash gifts come in many different forms. Cars, stocks, real property, art, and computer equipment are just a few examples of non-cash gifts. Churches often have individuals who wish to give non-cash gifts. Sometimes the gifts are given just to get rid of an unwanted asset, but most of the time, they come from individuals, like Mr. Jefferson, who simply want to be generous.
There are several considerations when determining whether or not to accept a non-cash gift. Let’s look at five of them.
1. Do we know what we are doing?
Before you take the car keys, laptop, or even stocks make sure you have your policies and procedures in place for accepting such a gift. Churches sometimes accept non-cash gifts without knowing how to report the gifts (for both the donor and the church) or how to turn the gift into a usable form, such as cash.
Cars and art are two common non-cash gifts churches will accept without considering what needs to happen once the gift is in their possession. Some church leaders assume that turning a car into cash is as simple as putting a “For Sale” sign on the front windshield. Of course, there is much more involved from a reporting and procedure standpoint than a sign in the windshield. So, before you accept the non-cash gift, consider whether or not you know what you are doing.
2. What does the donor intend for us to do with the asset?
When accepting a non-cash gift, make sure you know the donor’s intention. A donor may donate an oriental rug, and you assume that the donor would be comfortable with the church selling the rug for cash. The next Sunday, the donor comes up to you asking where you placed the rug. He is disappointed to hear that it has been sold and had hoped it would be used for the church décor.
Asking the donor their desired purpose for the gift is an essential part of the non-cash gift process. Is the rug to be used for décor or sold for cash? Do they want the house sold or used for an orphanage? Do they want the van used for church transportation or are they comfortable with its sale? Understanding the desired purpose of the non-cash gift will not only ensure that church leadership and the donor are on the same page, but it will also help church leadership know whether or not to accept the gift at all. So, consider the donor’s intended purpose for the asset.
3. Is the asset a personal gift for a pastor?
Again, asking for the desired purpose of the non-cash gift is essential. Church members often have a deep appreciation and love for their pastors. Many members also understand that pastors’ pay can be relatively low. Desiring to assist the pastor, members will provide them with a non-cash gift, like a used laptop.
Personal gifts to pastors are reported differently than gifts given to the church. For a personal gift, the donor should not receive a receipt from the church. This should be explained to the donor before accepting the gift. While the information won’t likely change the donor’s desire to bless the pastor, it will help keep everyone on the same page. So, consider whether or not the asset is a personal gift for a pastor.
4. Can the asset be converted to cash quickly?
The goal for most non-cash gifts is to convert them into cash, usually through a sale. Some non-cash gifts are easier to convert to cash than others. As an example, stocks tend to be fairly easy to convert to cash. Real property tends to be more difficult. Timeshares are even more difficult.
Holding some assets can result in additional fees and maintenance expenses. So, before accepting a non-cash gift, it is wise to see how quickly it can be sold given current market conditions. If the gift cannot be turned into cash within a reasonable time frame, and the church is unable to afford the costs of holding the gift, it may be best to refuse the gift. So, consider whether or not the asset can be converted to cash quickly.
5. Do we want to encourage others to give similar assets?
Accepting a certain type of non-cash gift communicates something to your church members—“We like these types of gifts.” When one person gives a particular non-cash gift (and it is accepted by the church), expect others to do the same. Word will get out. Know that accepting the gift will encourage other members to give similar assets. So, consider whether or not you want to encourage others to give similar assets.
Do you take the keys from Mr. Jefferson’s hand? Some church leaders will answer, “Yes.” Other church leaders will answer, “No.” If you are unsure, let the five considerations guide you in your response, not just for a 1995 Oldsmobile Cutlass Supreme, but for any non-cash gift. Make sure that a member’s desire to bless the church becomes just that, a blessing rather than a burden.
