5 Ways to Model Unmistakable Integrity When Considering Giver Intent

by Dan Busby

Ministries commonly design fundraising appeals to raise gifts for specific purposes.

Do givers really care if the ministry follows through with giver intent?  Many givers do care! And ministries must care!

Integrity has many faces for ministries. Abiding by giver intent is one of the most important evidences of integrity when a ministry raises resources.

In too many instances, givers challenge charities, believing that ministries have not complied with giver intent. Even if a ministry is legally compliant, unmistakable integrity may require going beyond what the law requires.

Unmistakable integrity is not your run-of-the-mill integrity. It is integrity on steroids—when givers observe a ministry’s actions, they immediately recognize the ministry as modeling unmistakable integrity.

For decades, ECFA standards have provided a road map for ministries to demonstrate unmistakable integrity in handling gifts involving giver intent. These standards have protected ministries and protected givers.

ECFA has championed the “truthfulness-in-fundraising principle”—which applies to gifts of all types—whether given for specific purposes or for the ministry in general. ECFA standards also focus on how funds are raised (or simply given) for specific purposes.

How can we distinguish between a gift for a specific purpose versus a general purpose? Terminology is sometimes not our friend in this arena. “Accounting-ese” takes us down the “unrestricted” or “restricted” route. The terms undesignated or designated are often used in a more colloquial sense. However, unmistakable integrity takes us beyond the legality of the transaction, beyond accounting terminology, and beyond colloquialisms.

For integrity purposes, let’s use the following definitions:  A specific purpose gift is one intended to support a purpose more specific than the general purpose(s) of the ministry. All other gifts support the ministry’s general purpose(s). A couple of examples may be helpful:

  • General purpose gift. The purpose of the ministry is evangelism. A giver provides a gift in response to an appeal for evangelism funding or simply makes a gift, unrelated to appeals, and marks the gift for evangelism. This is a general purpose gift.
  • Specific purpose gift. The purpose of the ministry is evangelism. The ministry makes an appeal for evangelism to be conducted in Iraq (the ministry also carries out evangelism in other countries). A giver provides a gift in response to this appeal. This is a specific purpose gift because it is intended for one country out of the various countries served by this ministry.

How does a ministry model unmistakable integrity regarding giver intent? Let’s walk through the integrity points:

  1. A ministry should be very intentional in designing fundraising appeals for either general purpose or specific purpose gifts.

    A fundraising appeal starts with an idea or a concept. This is true regardless of whether the giving opportunity is communicated by mail, email, a website, radio, television, in person, or using another form of communication.

    From the conception point, the ministry should be clear in its intent to request gifts for general purposes or for specific purposes. This is vital because clarity of the type of funds requested should drive the appeal narrative and giver response options; how the funds will be used, and identification of gifts in the accounting records.

    This type of clarity is essential at the beginning of the fundraising process to create a consistent thread of communication and documentation.

    Sand trap:  Without adequate initial clarity, a ministry communicates a fundraising appeal that seems to ask for specific purpose gifts. However, the ministry considers the gifts received as general purpose gifts, does not separately account for the gifts, and does not spend the funds as many givers anticipate. The ministry failed to model integrity.
  2. A ministry should communicate a fundraising appeal with such abundant clarity that a prospective giver will easily recognize whether the appeal is for a general purpose or specific purpose gift.

    A fundraising appeal can be as crystal clear as a cloudless sky, as murky as a foggy night, or somewhere in between. A prospective giver should be able to read an appeal on a ministry’s website, read a fundraising letter, or listen to a verbal appeal for gifts and readily understand how those gifts will be used.

    Sand trap: A fundraising appeal begins by describing a specific purpose need in glowing detail. Then there is a subtle (or not-so-subtle) shift to an appeal for gifts to be used “where needed most.” By the time the appeal concludes, there is no option to give to the specific purpose described at the beginning of the appeal—only an opportunity to give “where needed most.” This is “bait and switch” at its worst—givers may believe they were giving for a specific purpose, while the ministry only intends to use the gifts for general purposes. The ministry failed to model integrity.
  3. A ministry should expend specific purpose gifts consistent with the giver’s intent.

    If the ministry says it will spend a specific purpose gift for A, the gift should be spent for A—it’s just that simple. While there may be exceptions (based on explanations provided to givers at the time of the gift or, perhaps, subsequently), the general rule is: Raise the funds for A; spend the funds for A.

    Sand trap: A ministry receives a significant gift for A and spends it on B without communicating with the giver. The ministry failed to model integrity.
  4. In accounting records, a ministry should segregate the revenue and expenses relating to each type of specific purpose gift to document compliance with giver intent.

    Separate revenue and expense accounts should be established for each type of specific purpose gifts. Without this accounting treatment, the appropriate data will not be readily available for financial statement reporting purposes and for reporting to donors who provided the specific purpose gifts.

    Sand trap: Unique revenue and expense accounts are not used by a ministry for a series of gifts made for the same specific purpose. When the auditors ask for the relevant data at year-end, the ministry’s only recourse is to attempt to analyze the accounts to which the data was posted. This is an example of poor stewardship.
  5. A ministry should give special attention when specific purpose gifts are insufficient to carry out giver intent or when specific purpose gifts exceed the amount required to carry out giver intent.

    It is unusual when the gifts received for a specific purpose are exactly equal to the amount needed. If the ministry communicated to givers how gifts will be used in an under- or over-funding situation, this is often sufficient to allow the redirection of the funds. However, these situations are very fact-specific, and care must be used to model integrity.

    Sand trap:  A ministry raises gifts for a specific purpose with a goal of $2 million. Only $500,000 is raised. The ministry spends the money for general purposes without communicating with the givers. The ministry has failed to model integrity.

Complying with giver intent is one of the key ways that ministries model unmistakable integrity. Givers watch and make giving decisions based on whether integrity is being modeled. More importantly, God is watching for unmistakable integrity. We are accountable for how we steward the resources He has entrusted to the ministries we serve. 

 


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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