Examining designated or restricted gifts helps the church understand who is giving how much and to what causes.  It also helps determine the spirit of unity of the congregation.  While receiving gifts is usually a good thing, unrestrained designated or restricted giving can cause significant problems.  These types of gifts can be used by disgruntled members to “circumvent the budget”.  They can create a situation where the church could be cash rich but unable to meet budget needs because too much of the members’ gifts are going to their “special” causes.  And, excessive restricted gifts increase the workload of the administrative staff.

            Most church management software generates all the information needed to conduct a proper evaluation of this area.  But, few churches take the time to seriously examine what is happening in this “non-budget” area.  Periodically, each church should closely examine its restricted accounts and ask the following questions about EACH designated account:

• Who established the restriction?
• How long has the account been on the books?
• Have any accounts gone dormant?
• Will the church ever be able to use the funds to accomplish what the donor wanted to do?
• Does this activity conform to the mission church’s mission?

        The answers to these questions can help the church develop effective charitable giving policies. It also could serve as an alert informing the church that it may need to focus stewardship education not simply on the church as a whole, or even groups within the church, but to specific individuals.

Verne Hargrave is the Church and Ministry partner at PSK LLP and author of the book, Weeds in the Garden.