How Important is Your Church Giving Statement?
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How important is your church giving statement? It’s an important question. After all, putting one together is time-consuming.
A church giving statement for donors is essential for many reasons. Perhaps one of the most common is that come tax time, you will be ready. Your church giving statement offers proof of all the donations and results of your giving campaigns, which makes it easier for the donors who support your church to make valid tax deductions.
In this article, we look into the question how important is your church giving statement? We review the reasons you need to take time to produce comprehensive church giving statements, and we cover the pitfalls to avoid when filing these documents.
Why Your Donors Want Giving Statements
Many donors appreciate the fact that their church donations can be tax-deductible. However, the IRS usually requires proof of the donation. Donors should have proof in hand of their giving before they file their taxes. Normally, churches send a list of each donor’s gifts as an annual statement at the beginning of the year, along with other tax documents. If your church has a good system for preparing these documents well in advance of asking for donations, then you can proceed with full faith, knowing that the legal side is taken care of.
Is a Church Giving Statement Really Necessary?
In other words, how important is your church giving statement? As we mentioned above, this document is critical when donors must show proof of their contributions to the tax office. Your church giving statement gives them peace of mind in knowing they have what they need in case of questions from the IRS.
If you are looking to grow your donor base, trust is a priority. Producing giving statements for donors’ use makes it easier for them to give. They are more likely to trust you and your fundraising team.
What Should You Include in Your Church Giving Statement?
The typical IRS requirements for a church giving statement are simple and straightforward. These are the basics:
- Your church’s name
- The name of the outreach project that the donation was intended for
- Your church’s EIN/Tax ID Number
- The date of each monetary gift
- The exact amount donated
- A statement in writing that the donated amount was not payment for goods or services. For example: “No goods or services were exchanged by our organization in return for the contribution apart from church outreach benefits.”
How to Keep Track of Your Church Giving Statements
The more donors you manage, the more documents there are to keep track of. This is just a normal part of the process. Make it easier for your teams by using a church management software (ChMS) solution. These platforms make it possible to create digital profiles for each donor/family and record gifts during the year so that all of your year-end statements are complete and accurate.
Pitfalls to Avoid When Creating Church Giving Statements
Pitfall #1: Not Enough Attention to Detail
Remember that the IRS office is accustomed to studying documents in detail. That means your church giving statements are not something to rush through. Take your time, spellcheck the documents, proofread and edit each statement, and ensure that no gifts are misidentified. Make sure that you have followed the guidelines available through the IRS website, and ensure you store your paperwork on a digital platform for reliable record-keeping.
Pitfall #2: Being Impersonal
Use giving tools to keep all of these communications streamlined and standardized, but don’t forget that a personal touch makes a difference. Greetings and closings should be thoughtfully crafted with customized language. You can use your church management software for storing templates, then personalize and tweak for each document. Hint: Have your senior pastors sign these important financial statements.
Pitfall #3: Not Going the Digital Route
If you are still keeping all of your documents in printouts or handwritten form, it is time to upgrade. Look for tools and software that can make accounting and managing your church donors a breeze. At DonorWerx, we have plenty of fast and effective options to get you started. The platform makes it easy to format a digital template for many of your church documents, including your Church Giving Statement.
Pitfall #4: Forgetting to Thank Donors After the Giving Statements Are Sent Out
Keep in mind that your fundraising accomplishments would not have been possible without your donors’ financial support. Always prioritize recognizing and appreciating them. You can do this in your annual or monthly newsletter, which serves the dual purpose of recognizing current donors and encouraging future donors to make tax-deductible gifts.
Pitfall #5: Not Having Your Tax Documents in Order
On this topic, we want to remind all pastors and church leaders how important it is to make sure that your declaration papers are up to date. It is easy to forget legal work when you spend time focusing on the spiritual needs of your church. However, this important task cannot be ignored. Ensure that you have a legal expert who regularly audits the paperwork. It is also wise to have an accountant advise you on the legal process when it comes to managing church funds and donations.
Helpful Bible Verses on Giving
The next time you are putting together your church giving statements, remember what the Bible has to say about giving and donating to the church:
Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. – 2 Corinthians 9:7
For if the willingness is there, the gift is acceptable according to what one has, not according to what one does not have. – 2 Corinthians 8:12
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For more tips and technical tools for your donor journey, visit our Donorwerx blog and find out more about how you can bless others and be blessed in return. You can also call us to schedule a consultation today.
