Like other financial agencies, the PCA Foundation felt the effects of the economic downturn, but Foundation President Randel N. Stair has seen signs of improvement.

Gifts to the Foundation and grant distributions declined during 2009, but from January through May 2010, gift giving increased 17 percent over the same period a year ago. Distributions increased 26 percent in 2010, compared to the first five months in 2009.

Gifts to the Foundation have grown through the years, increasing from $14.4 million during 1990-1994 to $52.1 million during 2005-2009. Stair believes potential is greater than ever with many ways to give to and distribute from the Foundation, including its most popular service, the Advise & Consult Fund SM (A&C). He adds that many more congregations and individuals could benefit from the opportunities for charitable giving and its tax benefits provided by the PCA Foundation, established in 1980.

Effective giving

The Foundation was established partially in response to Luke 12:48, “To whom much has been given, much will be required.” The question is how to give most effectively. The Foundation’s purpose is “helping God’s people carry out their charitable desires and stewardship responsibilities,” says Stair, who has been at its helm since 1998. He would like to see more congregations and individuals participating in that mission.

“We have approximately 400 funded accounts and relationships plus others that have been active from time to time, but this barely approaches the breadth of service the Foundation could provide.” Although funds can be designated to non-PCA Christian ministries, most dollars go to ministries within the denomination. “The majority of our distributions go to PCA churches and PCA committees and agencies,” Stair said. “From 2005 to 2009, $16.9 million went to PCA churches, $11.5 million to PCA committees and agencies, and $13.0 million to non-PCA ministries. The Foundation is donor-driven, as all distributions are either directed or recommended by the donors themselves.”

He added that “our Church Designated Fund allows a congregation or members to make donations of cash or appreciated assets, enabling the church to control distributions from the fund. We can assist in devising an appropriate investment strategy for its fund.”

The Foundation understands how much ministries rely on gifts they receive, so it strives to supply them in timely fashion. If a recommendation is made by 11 a.m. on Tuesday, the distribution can be made the next day. “I like to think we’re as good at processing these distributions as anybody,” Stair said. “We try to get to know our donors and provide personalized service; part of this is being prompt in responding to their requests.”

Many ways to give

A common misconception is the Foundation serves only the very affluent, but Stair emphasized that “you don’t have to be wealthy to use our resources. Our services can be useful to just about anybody at some point in their lives.”

In 2008, the average individual gift to an Advise & Consult was about $16,000, but the median was closer to $5,000. The minimum for opening an A&C account with the Foundation is $1,000, using stocks, mutual funds, cash, or real estate. “Often people have a one-time event in their lives and utilize the A&C Fund for distribution of their charitable giving from that event,” Stair said. “Someone might want to make a stock gift in the amount of several thousand dollars. They might want to give it to their church, or other organizations, in a single lump sum or spread out over a specific period of time.” Rather than giving stock directly to the church, which then must liquidate the securities, they can utilize the Foundation for that – getting in return a charitable tax deduction for the value of the appreciated asset at the time their A&C account is funded, even though distributions might not be made from it for months or even years later.

A&C Fund benefits

The PCA Foundation can establish and administer endowments, charitable remainder trusts, charitable lead trusts, estate design, Church Designated Funds, and can perform bequest processing, but the most popular service is the Advise & Consult (A&C) Fund, known as a donor-advised fund.

This fund, administered free, enables donors to give to their churches and favorite Christian ministries—even outside the PCA—specifying amounts and frequencies. Benefits of the Fund are numerous, according to Stair, including:

• Simplifying giving – one gift can fund multiple distributions to ministries.
• Providing current year tax deductions for funds deposited, even though distributions from it may not be made until months or years later.
• Avoiding capital gains taxes on gifts of long-term appreciated securities.
• Scheduling automatic recurring distributions.
• Making anonymous distributions.
• Supporting short-term and long-term mission trips, even for family members or themselves.

“One man set up a charitable remainder trust naming the PCA’s Ministerial Relief Fund as sole beneficiary of the trust when he died,” Stair said. “When he passed away in 2005, the Relief Fund received about $900,000, with monies to be used for helping pastors and pastors’ widows in need. That gift will continue having a large impact in the lives of PCA pastors and widows with significant financial needs.”

An anonymous donor established a matching gift challenge program for paying off a church’s mortgage. The account provided an additional $1.50 for every $1 given.

Additional services

Directing funds to the PCA Foundation also can assist individuals wanting to avoid legal formalities of changing their wills. “Often they are reluctant to make specific designations in their wills, since recipients – and amounts to be received – may change. Instead, they can specify the Foundation for their Christian charitable giving and instruct us in writing how to distribute their resources after their death. If they decide to make changes, they can add, delete or revise percentages, simply by sending a new letter.” This is known as a bequest processing service.

Stair noted the Foundation is not “a financial planning group for advising about personal finances, such as budgeting and debt management. But our presentations to churches address the importance of stewardship – particularly within the context of giving.”

The Foundation assists with estate design, offering kits for families to determine how they want assets distributed. Weighing assets and the family’s desires, the Foundation can outline various options for them to consider and develop an estate design in a tax efficient manner. An attorney can then use the design to create a legal document, the estate plan.