Creating Policies

A key step for a congregation to be a good fiduciary of planned gifts is the writing and acceptance of a permanent fund policy that includes a formula for distribution, outlines management principles and lifts up the fund's purpose and types of acceptable gifts.

Consider these examples:

First Christian Church learned about 10 years ago it would receive a final distribution, estimated at $50,000, from a trust. Almost immediately, church leaders worked to develop a permanent fund policy that would allow the church to receive and distribute income from the gift in a proper and prudent manner.

Several years later, the final distribution from the trust arrived. Without mentioning the size of the gift, the board chairman handed out the policy to board members so they could refresh their memories. He then reported on the gift: In excess of $2 million!

The policy spelled out how the gift was to be handled; there was great cause for celebration as the congregation celebrated the donor and the ministries that gift will perpetuate. And the board meeting lasted just 30 minutes.

Central Christian Church used a different approach when it was named the recipient of a $250,000 bequest. The church trustees, with no congregational policy to guide them, were left to manage and distribute the money as they saw fit. Unfortunately, church members became suspicious, and today there is a major rift within that congregation and expenses are not being met.

Unfortunately, what happened to Central Christian Church is too common. But it doesn't have to be. With the United States on the verge of the largest transfer of wealth in the country's history, now is the time for congregations to position themselves to properly receive and handle charitable gifts.

Foundation staff members can help congregational leaders formulate and evaluate policies, as well as strategize ways to promote planned giving to the congregation.

The Foundation offers a sample permanent fund policy that congregations can modify for their individual circumstances and ministries.

For your convenience

Model Permanent Fund Policy (pdf)

Model Permanent Fund Policy (word doc)

En Espanol (word doc)