Securing Your Church’s Financial Future

By: Richard Carnes

In past columns we have discussed how churches are the most overlooked charities in estate stewardship and legacy giving. It is not that church members are opposed to supporting the ministries and mission efforts of their local church in this fashion. Rather, it is primarily due to the fact that most church members are never encouraged by their church leadership to consider giving a part of their estate to their church.

It is imperative that churches provide education and encouragement to its members in seeing their available financial resources much more broadly than just the cash that is placed into the offering plate. These resources can also be a person’s non-cash assets (which on average represent 91% of a person’s net worth).

Church leaders can make great strides in impacting the church’s financial future by seizing the opportunity to teach their church members to become “Kingdom-minded” stewards through the following ways:

· Teach members what the Bible reveals about an authentic stewardship lifestyle.

· Help members realize that how they plan their estate likely will be the most significant act of financial stewardship they will ever make.

· Encourage members to have and up-to-date Christian estate plan.

· Educate members on how to accomplish their charitable giving objectives through their estate planning.

The great news for church leaders is that they are not alone in preparing this type of Christian estate stewardship education and training for its members. The Kentucky Baptist Foundation stands ready to help facilitate this training of church members to become “Kingdom-minded” stewards. An active part of the Foundation’s service is the conducting of no cost seminars and teaching series on financial and estate planning at churches and associations. Also the Foundation staff is available to individuals for free, private estate stewardship consultation as they consider their estate planning, incapacity planning, and charitable gift planning.

To get started with this action step of securing your church’s financial future, contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is the president of the Kentucky Baptist Foundation, P O Box 436389, Louisville, KY 40253; toll-free (866)489-3533; www.KYBaptistFoundation.org 

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Flexible Family Philanthropy

By: Laurie Valentine-COO & Trust Counsel 

A Donor Advised Fund (“DAF”) is a giving plan that provides the giver immediate tax benefits and the input on future distributions.

A DAF is established through gifts to a public charity under an agreement in which the giver retains for himself/herself, and possibly others, the right to make recommendations for future distributions out of their DAF to other charitable organizations. Those recommendations can be for distributions of the DAF’s income and/or principal.

Gifts to a DAF are deductible in the year you make them, whether or not there is any charitable distribution out of the DAF during that year.

A DAF is a good charitable giving plan for people who want flexibility in timing their charitable support. A gift can be made to your DAF at a time when it may be most advantageous for tax-planning purposes without having to immediately decide what charitable causes/projects the gift will ultimate support.

A DAF can also be an excellent tool for teaching philanthropy to children. Including children as “advisors” of the family’s DAF gives them the opportunity to learn first-hand, as the family makes decisions about charitable distribution recommendations together, how their parents approach philanthropy, which organizations they value most and why, and what their parents expect from charitable organizations they support.

Donor advised funds provide flexibility in timing your philanthropic support to charitable causes important to you and a method for “growing” giving children.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

A Super Saturday

By: Richard Carnes 

Recently, I had the privilege to participate in the first of four Super Saturday training conferences for all the local church ministry segments, including: discipleship, preschool & children, Sunday small groups, Woman’s Missionary Union, worship and music, youth ministry, and the list goes on. This tremendous conference is coordinated by the Kentucky Baptist Convention Mission Board staff.

I enjoyed the great opportunity to meet with the church treasurers that attended the session on Conducting the Financial Business of the Church. This session was facilitated by Don Spencer, the KBC’s Director of the Church Financial Benefits department and Tom Adkisson, the principal partner of a local CPA firm. The informative session provided valuable subject matter for the local church treasurers on the topics of Charitable Contributions, Handling Money in the Church, Basics of Financial Support for Ministers, and Federal Reporting Issues.

It was also my pleasure, as a part of the session, to speak with the treasurers on how the Kentucky Baptist Foundation can assist local churches to bridge the gap to secure the financial future of their ministries. Many people are surprised to learn that churches are the most overlooked charities in estate stewardship and legacy giving support. Actually, this reality should not be a surprise when we recognize the average person’s net worth consists of 9% in cash and 91% in non-cash assets (home equity, life insurance, retirement assets, business assets, and savings.) Most churches’ appeals and education on financial support focus on the 9% cash of the person’s net worth and ignore the remaining 91% of the person’s assets.

The Kentucky Baptist Foundation helps bridge this gap for churches by educating church members on the value of having an up-to-date Christian estate plan to address the 91% of a person’s assets. We provide this educational support to church members through a variety of estate stewardship seminars on how to accomplish their Christian estate planning objectives.

The Kentucky Baptist Foundation staff is also available to assist you by providing private estate stewardship consultation. You may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is president of the Kentucky Baptist Foundation, P O Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

12 Creative Giving Ideas for 2015- #9

By Laurie Valentine- COO & Trust Counsel

Legacy giving not only offers a variety of ways to provide valuable support to charitable causes important to you, it can also help you solve personal financial challenges.

One such giving plan is a charitable remainder annuity trust (“CRAT”). A CRAT is an irrevocable trust that pays a fixed, never-changing income stream to the giver and/or others for life or a term of years and the remainder to one or more charities.

Your lifetime gift of cash, securities or real estate to a CRAT entitles you to a current charitable income tax deduction equal to the present value of the charity’s remainder interest. And, a CRAT can provide beneficial ways to solve a variety of financial challenges.

Help a grandchild with college expenses by creating a “term of years” CRAT. A gift of $50,000 to a 10% five-year CRAT will provide a grandchild $5,000 per year for 5 years (a total of $25,000) and the value of the charitable gift for income tax purposes is $25,900. If the trust assets earn an average annual total return of 7.0% over the five year trust term there will be almost $42,000 left to distribute to the charitable causes you name in the trust agreement.

A CRAT may be the right legacy giving plan to provide support to a family member. A gift of $50,000 to a two-life 5.0% CRAT allows you to set up a plan that would pay your family member $2,500 per year for the rest of their life and then that same amount would be paid to you for the rest of your life, if you survive the family member. The value of your deductible charitable gift depends on the age of the family member and you at the time you set up the gift.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Back To School

By: Richard Carnes

Late summer is always an exciting time for our children and young adults beginning to report back to schools and colleges across the state. The freshness of a new backpack, the wonder of a full box of sharpened crayons, and spring in the step of new athletic shoes all make for the beginning of their next educational adventure. But, for many budding young scholars, the hope of achieving their academic dreams is deferred due to their lack of sufficient financial resources.

The Kentucky Baptist Foundation has been honored to work with numerous donors whose passion is helping students receive the necessary financial support to achieve their educational goals. One example of this collaboration is the scholarship funds that donors have created to help off-set the costs of students’ education. For the upcoming academic year, the Kentucky Baptist Foundation had the privilege of awarding 77 scholarships to college and seminary students totaling $79,930 from the 17 scholarship endowments administered by the Foundation.

You may have this same passion and would like to explore how you can implement a legacy gift plan to fund a scholarship endowment like the ones referenced above. Or you may have a Christian school, college or Baptist seminary that you would like to support through a legacy gift.

The Kentucky Baptist Foundation staff is available to assist you by providing guidance in creating these scholarship funds and charitable endowments to support worthy Christian education causes across the state and the nation. You may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is the president of the Kentucky Baptist Foundation, P O Box 436389, Louisville, KY 40253; toll-free (866)489-3533; KYBaptistFoundation.org

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Watching Your Legacy

By: Richard Carnes- President & CEO 

Recently, my wife Karen and I had the great joy of caring for our 21 month old granddaughter while our son and daughter-in-law traveled on a weekend trip. We played, we hugged, we read bible stories and we ran around the house together, giggling and laughing all the way. As I listened to each new word and observed each new skill that she was developing, it became abundantly clear that I was observing a major piece of my unfolding legacy.

As I watched her and as she held my hand, walking ever so tentatively at times, it dawned on me that I was blessed to help her take the first of what will be millions of steps toward her own legacy. My heart nearly explodes with joy and desire to help her develop her potential and most importantly, come to her own personal relationship with Jesus.

I might also call this experience a part of investing for eternity. This type of investment includes passing on values, perpetuating traditions and promoting ideals for future generations. Each of us has the opportunity to incorporate this type of investing into our families and similarly into our churches and church related ministries. There are likely ministries you want to nurture and financially provide for, such as: mission endeavors, Christian education programs, children’s care, support efforts at your church and many other ministries for the building of God’s Kingdom.

As you watch the unfolding of your legacy, consider including charitable gifts in your estate and financial plans. This type of investing for eternity will assure that your generosity continues beyond your lifetime.

The Kentucky Baptist Foundation staff is available to assist you by providing private estate stewardship consultation. You may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is president of the Kentucky Baptist Foundation, P O Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

12 Creative Giving Ideas for 2015- #8

By: Laurie Valentine- COO & Trust Counsel

A charitable remainder unitrust (“CRUT”) is legacy giving plan that provides you and/or other family members a potentially growing distribution stream during the term of the trust, with the remainder set up to benefit one or more charities at the end of the trust term.

You set up a CRUT by creating an irrevocable trust and transferring cash, appreciated securities or real estate to it. The CRUT will pay you and/or others an amount each year equal to the payment rate designated in the trust agreement multiplied by the value of the trust assets, as revalued on January 1 each year. The minimum payment rate is 5%.

The trust term can be for the lives of the non-charitable “income” beneficiaries or a fixed term not to exceed 20 years.

The payment out to you and/or other non-charitable beneficiaries each year will vary---if the trust assets increase in value from one year to the next, the payment amount will increase; if the value goes down, the payment amount will decrease. The goal is to select a payment rate that will allow some growth in the value of the trust assets from year to year so that the payments grow, thereby creating a hedge against inflation over time in what you are receiving from the trust.

When the trust term ends, whatever remains in the trust is distributed to the charities you have named in the trust agreement.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.