We share your desire to see as much of every donation going to share Christ’s love and mercy with others. We also have a strong desire to fulfill the legal/regulatory, ethical and moral obligations we have to those who partner with us. Fulfilling those obligations means the LCMS bears some necessary costs, which must somehow be financed.
In 2016, the LCMS Board of Directors established a policy that sets a minimum percentage for each charitable gift that must be allocated to directly fulfill donor intent ("ministry"), and a percentage that sets a ceiling for how much can be expended to engage and serve those who make charitable donations to the LCMS (the latter is our definition of “overhead”). The policy gives the Chief Financial Officer (CFO) authority to set the percentage ratio between ministry and overhead based on data drawn from the Synod’s audited financial statements.
For the LCMS current fiscal year 2018 (FY18), notwithstanding any exceptions for a special campaign authorized by the Board of Directors, the Board endorses the CFO's determination that a minimum of 88% of donated funds must be used to fulfill the purpose the donor intends to support, and no more than 12% may be reinvested back into our relationship with contributors or to engage new contributors. No portion of a donor-restricted gift may be used for costs unrelated to the purpose the donor intends to support, such as cutting the lawn at the International Center, purchasing new or replacement furnishings, or paying the salaries of Convention-elected officers.
The maximum ceiling the Board would ever allow across the board or for a special campaign is 33% — the limit of “prudence” defined by several donor advocacy/protection groups like the Better Business Bureau’s Wise Giving Alliance, Charity Navigator and Guidestar. Visit overheadmyth.com to learn more.
Update:
In the wake of successive natural disasters in 2017, the Synod’s Board of Directors is anticipating a greater-than-normal charitable response for LCMS relief and recovery efforts than was originally budgeted for FY18. In a unanimous vote, the Board authorized a change in the allocation ratio for disaster-response gifts (Harvey, Irma and Maria Relief) to 94%/6% for the duration of the initial relief effort, and reserves the right to make additional adjustments moving forward. This means a minimum of 94% of every donation for LCMS Disaster Response must be made available to carry out disaster relief, recovery and restoration work. No more than 6% may be spent on engaging donors and fulfilling the obligations we have back to donors.
This ratio should be viewed as an estimate of final outcomes, when the true picture of charitable response and related costs is known. The allocation of 6% funds only those costs incurred to solicit and receive disaster-related gifts, care for and communication with contributors, in compliance with FASB Statement 116 (Generally Accepted Accounting Principles). No portion of a disaster gift can or will be used to fund LCMS administrative expenses that are separate from disaster-related work.
For more information about this allocation ratio policy and its impact, please contact the executive director of LCMS Mission Advancement at 800-248-1930, ext. 1315.
Return to top