Most churches rely upon tithes and contributions from their members to pay for their ministries. Most churches also pay for capital improvements and new building in the same way. Churches that rely only on contributions to build their church fund are missing out on a major opportunity. Most of these churches do not understand that they only need to know three tips that will help them build a church fund.

All 88 keys of the Phoenix Symphony’s Steinway piano are endowed. They went for $5,000 a key. Penn State has every position on its football team endowed.

Any church that is not building the church fund through endowments might do well to consider this option very carefully.

The church I just started to attend just celebrated its 50th anniversary. It’s not a big church ” about 350 members. It finished 2008 $33,000 in the red. In fifty years, they have a church fund balance of zero.

Because of the recent and current economic climate most churches saw reduced giving during the fourth quarter of 2008 and the first quarter of 2009. In an article released in December of 2008, the Barna Group predicted giving to churches to be about $3 billion to $5 billion lower than anticipated in the fourth quarter of 2008. For congregations that do have money in a church fund, the balance is likely to fall until the economy turns around.

Financing ministries from the interest on endowment funds goes a long way toward shielding the good a church can do from economic downturns.

Many churches have built substantial church funds through endowments. For other how-to information and examples, I would point to “Financing American Religion” by Mark Chaves and Sharon l. Miller. Because most churches could do a better job of creating church funds here are three tips for building an endowed church fund.

There is something called an 80/20 rule which is applied to most things. This says that 80% of the results are produced by 20% of the people or the effort. I suspect you have heard this rule applied to something in your lifetime. But when it comes to building church funds, it is more like 98/2 ” 98% of the funding comes from only 2% of the congregation. If you need to raise money for an endowed church fund, concentrate on the 2% of the congregation who are the big givers.

2. Help donors solve a problem.

Although we want to believe that all giving to the church is entirely faith-based or altruistic, you should also consider that if you can show a donor how to solve a personal financial problem or need and endow a church fund you will be more successful.

While it is true that many donors are 100% altruistic, you stand a better chance of getting a major gift if you can show a major donor how to solve a problem that simultaneously results in a gift to your church.

I’m very clear that tax breaks are not the primary reasons people give money to a church fund. In most cases, the tax issues never enter the mind of the giver. But if you can show someone who is interested in your ministry how to make a gift that satisfies the original goal and helps them solve a financial issue or tax problem at the same time, you dramatically increase both your chances of getting the gift and your chances of getting a larger gift for the church fund.

3. Provide case study information.

Many of the people who could be major donors to church funds don’t know how to plan approaches to giving that both are legal and provide incentives to make large gifts to the church fund.

During my 39 years in the financial and estate planning arena, I have spoken with numerous business owners who didn’t even know they had a problem. No one had ever pointed out to them how much of the fruits of their labors could be lost in taxes. I think church fundraisers also suffer from the same lack of information, as do church members.

If you will provide explanations of the laws and examples of how others have solved specific problems through church fund endowments, I am convinced that people will easily see how their financial and tax situation could also be improved. This is the first step in starting a conversation about the possibility of making a major contribution to a church fund that will pay for the churchs ministries with the interest on the investments.

Robert D. Cavanaugh, CLU is a 39-year veteran of the life insurance, financial and estate planning industry. He is the publisher of The Smart Giver, a planned giving educational series which teaches strategies to increase income and reduce taxes while simultaneously helping churches and non-profits. Additional information about how to build a church fund can be found on his blog.