The Importance of a Fundraising Policy

Let me start by saying this: fundraising is probably most definitely my absolute least favorite part of youth ministry. After all, there’s a reason why I didn’t go into accounting or finance, right? And does anyone really like asking people for money?

That said, fundraising is a pretty necessary part of what we do in fundraising. So, unless you serve in a church where youth ministry is totally and unabashedly supported by tens of thousands of dollars from the church budget every year or your youth ministry operates totally under the same basic structure as the “pay-to-play” sports at the local high school, fundraising is probably a necessary part of your youth ministry programming.

And if your experience is anything like mine, the minute you start talking about fundraising, there seem to be TONS of opinions and details to consider:

  • How does money from fundraisers get divided? Does it go into one large pot for the whole group to access as needed? Is it divided only among those who worked that particular fundraiser? Do we tithe a percentage of the money earned to another ministry of the church or an organization outside the church?
  • Do individual accounts roll over indefinitely or does money earned have to be used within a certain timeframe?
  • How do we balance law and gospel in how we handle fundraisers and distribute money?
  • What kinds of events can fundraised money be used for? Fun events (i.e. bowling, lazer tag, etc.)? Mission trips? Retreats?
  • What if students with legitimate financial need are simply unable to work fundraisers when they are offered?
  • Is money earned by students and adults?
  • How do you handle the differences between donating supplies for a fundraiser and actually working a fundraiser and interfacing with the people?
  • What kinds of fundraisers do we do? How often do we do them?

There seems to be no end to the questions, and if you’re not careful, the details of fundraising, maintaining individual student accounts, and distributing funds can quickly become a nightmare, even for the most skilled mathematicians and accountants.

Right now, our youth ministry at Epiphany Lutheran Church runs a couple of ongoing monthly fundraisers. Since we announced our big trips for Summer 2012 on October 1st, I can imagine that we’re also going to be thinking about more fundraisers in the near future to allow for students to go on these trips, which cost anywhere from $200-$400 per person.

So, I spent a significant amount of time working with our Director of Finance and Human Resources developing a Fundraising Policy that we will aim to live by from this point forward. This policy serves a couple of purposes: to encourage participation in youth ministry fundraising efforts, to outline how money is distributed and used, and to outline the financial responsibility of individual families for major youth ministry events.

Here are some of the highlights of this policy (you can read the full policy here):

  • Trips Qualifying for the Use of Fundraising Money: Any event for which the total cost is more than $100 per person–This limits the use of funds to events that have a much greater focus on mission and discipleship.
  • Financial Responsibility of the Family: The family is always responsible for the initial trip deposit, and is responsible to either pay or fundraise the remainder of the trip cost within a designated payment schedule. The deposit is always non-refundable, and remaining payments may only be refundable (in the event of dropping out of the trip) if another youth is able to take the place.
  • Individual Fundraising Accounts: Hold money for one year (all unused funds are rolled over on August 31st of each year into the Youth Dedicated Account). This policy may need to be changed in a church that fundraises for multiple years for one major event, such as the tri-ennial ELCA National Youth Gathering. 
  • Distribution of Funds: Our funds will always be distributed according to a 10/20/70 rule–10% is donated to a charitable organization selected by the youth; 20% is automatically deposited into the Youth Dedicated Fund; and the remaining 70% is distributed into the individual accounts of those who actually worked the fundraiser (based on an hourly wage determined by the number of total hours invested in the fundraiser).
There are some additional stipulations in this policy, and a little bit more detail here and there, but that’s a pretty basic overview. Having this policy in place puts everyone on the same page from the get-go when it comes to fundraising and answering the many questions listed above. Will there ever be exceptions? Sure. But this policy gives us a foundation on which to stand.
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