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Bequests

When a church is named as a beneficiary in a will, the gift to the church is known as a “bequest.” The actual gift can come in various types of assets such as cash, stocks, real estate, or even personal property. The gift may also have restrictions attached in terms of how it is to be used.

It is important to note that the trustees of the church, at the direction of the charge conference, have the obligation to evaluate the bequest and to decide whether or not the church should accept it. Especially in the case of real estate, the taxes and liability that goes with the property may cause the church a financial burden rather than being a positive occurrence.

The United Methodist Book of Discipline 2008
¶ 2532.5

Subject to the direction of the charge conference as hereinbefore provided, the board of trustees shall receive and administer all bequests made to the local church; shall receive and administer all trusts; and shall invest all trust funds of the local church in conformity with laws of the country, state, or like political unit in which the local church is located. Nevertheless, upon notice to the board of trustees, the charge conference may delegate the power, duty, and authority to receive, administer, and invest bequests, trusts, and trust funds to the permanent endowment committee or to a local church foundation and shall do so in the case of bequests, trusts, or trust funds for which the donor has designated the committee or the local church foundation to receive, administer, or invest the same.

¶ 2532.5 as designated by the donor or at the direction of the charge conference upon notice to the board of trustees. When such property is in the form of investable funds, the permanent endowment fund committee may consider placement for investment and administration with the United Methodist foundation serving that conference or, in the absence of such a foundation, with the United Methodist Church Foundation. A conscious effort shall be made to invest in a manner consistent with the Social Principles and the creation of an investment policy.

Gift Acceptance Policy

It is recommended that a church or agency adopt a gift acceptance policy in order for it to be guided in the acceptance or rejection of all gifts and bequests. A properly drafted policy can have the additional benefit of encouraging gifts and clearly stating how unrestricted gifts are to be applied to various aspects of the ministry of the organization.

The Foundation can provide counsel and recommendations on establishing a gift acceptance policy.

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Traps to avoid

Regarding real estate gifts

  • Check for unpaid taxes and liens on the property.
  • Evaluate the cost of liability and property damage insurance.
  • Be sure to have a professional do an environmental audit to determine if there are any potential hazardous materials. (This can be as simple as asbestos floor tile or shingles.)
  • If you intend to sell the property, how marketable is it?

Regarding narrow-purpose restrictions

  • Is the gift designated to provide funding for a ministry the church does not intend to pursue?
  • Is the gift contingent upon securing additional funds, for example to perform a construction project?
  • Is the gift so narrow as to be unlikely to be used in the future?

Regarding difficult conditions

  • Does the gift fund a ministry that does not conform to the policy of The United Methodist Church?
  • Is the gift contingent upon adherence to a particular theological position that may not be compatible with the purpose of the congregation?
  • Is the gift to be invested in such a manner as to not provide the income necessary to fund the purpose for which the gift is given?

If there are any other questions or comments about bequests that you would like to discuss, please send us an email.

 
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