Sep 21, 2011

The “Cash Only” Giver

Smarter stewardship benefits the ministry and your family.

There is this great little bakery that my family loves. I couldn’t even tell you what it’s called because we refer to it as “The Cash Only Bakery.” I was quite embarrassed when I offered to take good friends to that bakery…my treat! We ordered our food and I pulled out my debit card. The woman behind the counter seemed a bit weary saying it again as she tapped on the sign taped to the counter that said “CASH ONLY.” I don’t frequently carry cash and my friends were kind enough to cover the bill.

According to the most recent data from the U.S. Census Bureau, the average American family has about 11% of their total assets in cash (this includes CDs, money markets, savings, cash and checking). Everything else is in the form of non-cash assets…our stuff. Investments in publicly traded stock are a big item and investments by business owners in their own companies is at the top of the chart as well. Real Estate is way up on the list too. These statistics represent all Americans and Christian givers are no exception. When you really look at it, Christians in America have way more “stuff” than they have cash.

Christians are charitable and many give to their church as well as ministries they care about. When we are asked to give, we generally associate that with cash giving or writing a check.

Look at the Bible. There are certainly examples of folks giving money, but there are also very meaningful gifts in the Bible that were not cash. We see the example of Abel giving the best of his crops. In the New Testament, Mary Magdalene pours out expensive perfume on Jesus before his death. We see another example from the book of Acts:

All the believers were one in heart and mind. No one claimed that any of their possessions was their own, but they shared everything they had… For from time to time those who owned land or houses sold them, brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone who had need.

                                                                           Acts 4:32-35

According to the IRS, only about 25% of charitable giving includes gifts of assets while the vast majority are gifts of cash. Christians are giving and being asked to give cash, a small portion of our assets, while more abundant resources are being neglected.

The benefits of non-cash giving.
For a family to write a check to a ministry, they have to have cash in the bank. Wealth, for many of us, may be tied up in other assets. Even wealthy donors may have cash flow issues and struggle with liquidity. Much of the real estate, family businesses, investments and other assets that a family owns were purchased for a cost that is much lower than today’s value. In order to turn these assets into more cash, they must be sold and taxes must be paid. Turning assets to cash may cause a painful tax burden.

With only so much cash to give, Christians must decide what piece of the pie they are willing to give to each ministry. There is a better way to support the church and ministries we care about.

Giving more & giving more efficiently.
If Christian families were to give appreciated assets, they could avoid paying taxes on the gain; because most ministries are tax exempt entities, they won’t pay tax either. You can maintain your liquidity and keep your cash while giving more! Most donors who learn to give non-cash gifts prefer to continue giving more generously through these gifts. Here are a few of the many examples:

 - Small business and big giving.
The words cash flow and liquidity are familiar to the small business owner. Many are still giving cash or writing checks, but the vast majority of their net worth may be wrapped up in their company. A planned giving expert can help these business owners to reduce taxes and improve cash flow by making gifts of their company stock. It is a bit more difficult to gift a non-publicly traded company, but with the right expertise and the right circumstances, small business owners can give a very meaningful gift. A donor may give a lump sum or create a fund that allows them to fund charitable organizations long term. Now the cash that was devoted to giving can help their cash flow while assets that were locked up in their business can be used to support ministry. It is a win-win situation.
- The Tax Procrastinator.
The government makes it easy in some accounts to defer taxes, and many Christians have taken advantage of tax deferral. These assets can feel ‘trapped’ in accounts due to the pending taxes. In fact, we see many families who have amassed all of their savings inside of tax deferred accounts. Billions of dollars are in retirement plans like IRAs and 401ks. When these assets are distributed, the taxman takes his cut. Many retirees procrastinate paying the ordinary income tax and refrain from using these assets, but at age 70½ the government requires a distribution. The IRS allows what is called a Charitable IRA Rollover which allows you to transfer a gift directly from your IRA to a non-profit organization or ministry and NEVER pay taxes on that money!
Similar gifts of highly appreciated real estate or stocks allow donors to drastically reduce taxes. From a business sale to a classic car, real estate to a piece of art--any gift of appreciated property can help a donor and the Kingdom simultaneously.
- Charitable planning aligns donors’ needs with Kingdom work.
Many Christians would be wise in their stewardship to give effectively and avoid taxes, but sometimes these options don’t meet all of their needs. Perhaps someone owns these assets but needs income for life. A charitable gift annuity or charitable remainder trust could create income for the future and a current tax benefit while setting a ministry up to receive a substantial gift down the road.

On the other hand, some donors don’t need any more income today. Oil and gas royalties, rental income from real estate and dividend paying stocks can add to a family’s income when they don’t need it, forcing them to pay higher taxes. Through planning, they can shift a stream of income to a ministry for a term of years until their needs change.

Donors don’t have to split up the cash pie anymore. Not only can charitable planning meet their needs, but it can allow them to give more abundantly. As you make the most of the resources God has given you, you can take your stewardship to a new level as you further the Kingdom.

Seeking wise council.
Some of these assets are easy to give, and painless for a ministry to accept, while others are much more complex. Don’t be concerned if this is overwhelming. You may have advisors who are versed in charitable planning. On the other hand, it may be time to find an advisor that can help you to plan the impact you’d like to make and to unleash your true potential for giving. Empower these professionals to help you give more effectively. Get past the “CASH ONLY” perspective and watch how the Lord blesses your giving.

We can help you with a plan to bring your family together as you build the Kingdom. Our mission is to support clients in their stewardship and in realizing their full charitable potential. Even if you have already implemented charitable giving in your estate and financial plan, we can offer a second opinion to determine if you could be more effective and efficient in your Kingdom focused planning.

Check out our business page at Planning For Stewardship.

Sep 20, 2011

The 10-Day Give

Well, Bob and the folks over at just put up some info on the 10-Day Give. Here are some details from their site:

How it works
1. Sign up using one of the methods above.
2. On October 1st we will send out a reminder notification to everyone signed up to begin their 10-Day Give.
3. Start giving until the challenge ends on October 10th – or just keep on giving!

For more info click here to go to

Same old management...just a new name!

Well, if you haven't noticed already, this blog has seen a name change.  More and more the topic is focused on stewardship, charitable giving and abundance.  That didn't really go along with the blog title, 'The Aspiring Tightwad.'  Although a life of frugality is a good idea, I agree with Winston Churchill in his saying:

“We make a living by what we get. We make a life by what we give.”

A good friend pointed out that the emails he had received from "The Stewardship Sentinel," were new to him.  He had no idea where they had come from. I was pleased to hear he hadn’t unsubscribed!!!

Same topic, new name: The Stewardship Sentinel

Feel free to share feedback associated with the topic and I welcome guest posts with related ideas.  If you haven't subscribed, you can pick up a feed for your reader or you can enter an email address to the left and you'll receive the latest!

Best Regards,

Adam Miller
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