Thanks to a change in the law churches will be able to claim thousands of pounds of extra income.Gordon Brown,the Chancellor of the Exchequer changed the rules on the Gift Aid scheme. Churches and charities had formerly been allowed basic rate tax relief to be reclaimed on single gifts of £250 or more. During 1997-1999,Gift Aid donations from individuals brought in £683 million of new income into the charitable sector However,it was mostly wealthy donors who were able to make a £250 minimum donation who used the Gift Aid scheme. Four years ago a study revealed that only 6%of Evangelical Christians in the UK used the Gift Aid scheme.
But in April last year,the government announced major changes to the Gift Aid scheme making it more inclusive and eas- ier to administer.The £250 minimum donation threshold was removed.Any amount given to church and charities can be tax effective provided the donor has paid sufficient income or capital gains tax to cover the amount reclaimed by the charity.What ’s more deeds of covenant are no longer needed to make regular gifts tax effective.Donors simply need to sign a Gift Aid Declaration form that allows churches and charities to recover tax on all future donations.Various ways of giving including cash offerings,one-off gifts of less than £250 can also qualify for tax relief.This is all great news for churches! Kevin Russell,Manager of Accountancy Services at Stewardship Services,a charity that specialises in Gift Aid tax recovery for 12,000 Christian donors says,“donors and charities benefit from the new Gift Aid scheme.People previously unable to make Gift Aid donations because of low income,or feeling uncertain about making a long-term commitment may now be able to give tax effectively.The financial benefits for churches and charities using the Gift Aid scheme are great too.They can increase their total income through Gift Aid tax recovery on large or small gifts,one off gifts and even on cash donations.”
Gift Aid pitfalls
Under the Gift Aid scheme,it is relatively easy for churches and Christian charities to claim tax back on monetary gifts but it is also easy to get it all wrong! Churches and Christian charities should maintain adequate records at all times and ensure and gifts can be matched to donors and their Gift Aid Declarations.
The use of the Gift Aid scheme unaccompanied by biblical teaching on stewardship and giving might have a negative impact in church finances in the long term.While researching stewardship matters in UK churches during 1998 I found out that seven out of ten church leaders are reluctant to preach on stewardship and giving.Additional income in church coffers resulting from tax recovery might prove a good enough excuse for some ministers to continue avoiding teaching and preaching on stewardship.
The response to changes
A recent study conducted by CAF and NCVO shows that since April 2000 approximately £1 billion are being donated to charities through new Gift Aid. Allowing for conversions from deeds of covenants this means that an estimated increase of £150 million in reclaimed tax is going to charitable entities.So,are churches and Christian charities receiving their share of the £150 million income?
For churches like Highfields Evangelical Church in Cardiff,the answer is definitely yes.“More people are now giving regularly to the church ”– said Mr Ralph Davies,Finance Committee member.“When we explained to the congregation the new Gift Aid rules many of our members were happy to sign Gift Aid Declarations and make their giving tax effective.Last year we received £133,000 through Gift Aid and existing covenants. Our total income increased by £40,000 due to Gift Aid tax reclaims.We hope to use this money effectively in local mission and Christian ministry abroad.”
The Gift Aid scheme has proved beneficial also for churches that have raised money for particular projects.During March 2001,All Saints church in Woodford Green,Essex,had a special gift day for the new vicarage.Peter Morris the church treasurer said “People attending our services received a pack containing a letter that explained the need for a new vicarage,a leaflet about Gift Aid and a Gift Aid Declaration form.Many responded generously to the need.We were able to raise £146,000 of which £28,000 was reclaimed tax income.”
To find out what churches and denominations are doing to promote the Gift Aid scheme we interviewed Robin Stevens, National Stewardship Officer of the Archbishops Council.We also conducted a phone survey of evangelical church treasurers.
“The Church of England ”,says Stevens,“has been very proactive in promoting the new Gift Aid scheme through dioceses and parishes.Since last April,we have been busy producing guidelines on Gift Aid for church officers and running training programmes for church treasurers.This year we are holding follow up meetings to evaluate the situation in the parishes and promote good giving practices.”
During April 2001,we asked 60 treasurers of evangelical churches across the UK about the Gift Aid scheme.All of them said that they were already using the Gift Aid scheme in their churches.Most of them had promoted it by explaining its requirements to members during a church meeting.They also had made Gift Aid Declaration forms available on request or placed them at a church display.
Questions some church treasurers had not considered were how to encourage those who do not attend church meetings to participate in the Gift Aid scheme?Or, how to talk about the Gift Aid rules to young people and others who do not feel inclined to pick up a Gift Aid Declaration form from a church display?The fact that such questions are yet to be addressed, highlights the need for church treasurers and finance committees to be more proactive in promoting Gift Aid,especially to young people and the margins of church.
The other side of giving
In my opinion,in UK churches today there are but a few people who might not know about the Gift Aid scheme and many who have a muddled understanding of stewardship.Many Christians ’definition of ‘a steward ’is a person who welcomes people at the church door,or passes around the offering bag and serves the communion!
It ’s not surprising given that the majority of church leaders,70%of them according to our survey,preach and teach only once a year on the topic of stewardship. Furthermore,few churches offer any teaching on biblical principles of money management or any support to members of their congregations struggling with debt.
In order to help church leaders and Christian charity fundraisers address stewardship issues the Evangelical Alliance is facilitating and hosting a Stewardship Forum of church leaders,charity fundraisers and other Christian stewardship professionals.The Forum ’s main objective is to help Christians understand and practice biblical stewardship by equipping Christian leaders to teach stewardship as an integral aspect of spiritual growth and not just a response to financial needs.
Stewardship Forum ’s website (www.stewardshipforum.org)contains a wide range of teaching materials for use from the pulpit,in small groups or Sunday school.It also offers a comprehensive list of resources on lifestyle issues and pro- vides opportunities to discuss stewardship issues on-line at the Stewardship Roundtable.
Why people give
While analysing the trends of giving among evangelical donors in 1997-1998 I found the following on ‘why ’Christians give:
- Christians give because they are moved by stories.Stories of poverty and suffering,of how God is at work around the world or in the communities.Giving articulates what people feel and the value systems they believe in.
- The majority of Christian donors are willing to get personally involved in the work of the organisations they support. As well as using their chequebooks they also want to participate in bringing positive changes to the lives of people the organisation is trying to help.
- Donors from (18-25)and (35 –44)age groups are more likely to support particular projects rather than organisations.They are also more likely to give to individual missionaries whom they know are making a difference through their ministries.
On the ‘how ’of Christian giving I discovered that:
- Nearly half of evangelicals (47%)gave to their churches on monthly basis and a further 38%gave weekly.More than half of evangelicals gave to Christian charities (55%)on a monthly basis.
- The preferred way of giving was writing a cheque.This is good news for churches and charities and a good incentive to get their supporters to sign Gift Aid Declaration forms.
- Giving to churches and charities varies according to age.Those most likely to give to churches and charities were 35 – 55 years old,with a college education, married and without dependants living at home.People aged 18-25 were least likely to give to church or other charities.
- Further research conducted with focus groups of 18 –25 year olds has shown that they often lack a biblical understanding of stewardship.They have a limited understanding of the work of Christian organisations.Also,they have poor budgeting skills and less discretionary income than their parents. Payments of college debts and spending 50% of their income on rent or mortgage tend to affect their giving decisions.
Creating a stewardship lifestyle
Faithful stewardship is a lifestyle not an event totally dependent on changes to tax laws.Alongside the effective implementation of the Gift Aid scheme the church should focus on creating a stewardship lifestyle and a world mission mind-set among its members.
The first step is teaching people about the joys and challenges of being stewards of God-given resources.
The second step in this process is modelling good stewardship.Churches are already setting a positive stewardship example by effectively implementing the Gift Aid schemes.This should be coupled with generous giving from the church ’s budget to missionaries,denominational entities and other ministries.
The third step is understanding how and why people give in order to communicate the needs effectively and provide a variety of opportunities and ways of giving.Our research findings published as a report titled Who gives to what and why? Getting to know the evangelical donors, show that Christians are likely to support projects and individuals rather than give to impersonal budgets.In this context,it is important that the church provides opportunities for people who do not contribute to the annual budget to give to special projects or encourage them to support missionaries from the church or denomination.In addition to this,ministers and treasurers need to share with the congregations the stories of people whose lives have been touched and transformed by the ministry of the church.
Finally,while developing effective stewardship Christian leaders,treasurers and fundraisers should keep reminding themselves and each other that they are not raising funds for institutional survival but for the mission of God.The outcomes of implementing the new Gift Aid scheme and teaching stewardship cannot and should not be measured only in terms of money but in terms of the spiritual growth of those involved.