Situation: Discerning the difference between corporate and personal giving
Many of you run your own companies. You have personal passions. But you also see giving as a way to disciple your employees, or as a way to build your company’s brand.
Stanley in India put it succinctly:
“Should my company’s giving differ from personal giving? How do I establish corporate generosity?”
Danie Vermeulen is a delightful member of our team. He’s served as a pastor and ministry leader. Most recently, he served as Executive Manager at the Mergon Foundation in South Africa, which made grants throughout Africa. Mergon’s grantmaking was fueled by the Mergon Group, founded in 1980 by Francois van Niekerk. So Danie knows what he’s talking about. Enjoy his reflections:
Scripture: Tithing, Sowing, and Reaping Apply to Companies
The first question that comes to mind is, “Should a company be giving of its profits if the company directors are already giving from their own income?”
I think it is prudent and have Scriptural foundation if you view the company as an entity on its own.
After all, God required Abraham and the Israelites to give from their produce – their farm, which was their business. “A tithe of everything from the land, whether grain from the soil or fruit from the trees, belongs to the LORD; it is holy to the LORD.” (Lev 27:30)
As Jesus came to fulfil the Law we no longer live under the letter of the Law but we do live under the Spirit of the law.
“Remember this: Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously. Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. And God is able to make all grace abound to you, so that in all things at all times, having all that you need, you will abound in every good work.” (2Co 9:6-8)
I believe this applies to a company as well as we bind the Old and New Testament together.
1. Consider the Tax Situation and Corporate Structure.
Company giving differs somewhat from personal giving because it involves several factors that are much wider than personal giving. Before a company decides to give from the company profits, I suggest that they first consider the following:
- It is advisable to consult with a tax practitioner
Depending on the country you live in there may be certain laws in place that can influence your process of giving. Many countries allow you to give a certain percentage of your profit without having to pay donation tax on it.
- Consider establishing a foundation or trust
Depending on the size of your company you may want to establish your own foundation or trust. That will enable others to also use the above tax incentive to donate into the trust. In the USA it is known as a 501(c)3. In South Africa it is known as an 18a Certificate.
- Involving management and staff
To what level would you like your company generosity to go? Will it be purely a trustee-or director-driven project or would you like to involve your staff members as well? For example, Gary Grant who owns The Entertainer toy shops in the UK, encourages his staff to be generous by matching Pound for Pound what his staff give to charities of their choice.
- Generosity Budget
It is advisable for a company to determine giving percentages in order to establish a budget from which they would like to give. This should be an easily attainable budget and not a “faith” budget. The last thing you want is to fall short of available cash that is already committed to organizations.
2. Clarify Your Company’s Purpose.
It is vitally important that a company establish its mission. The company mission drives the ethos and vision of what you want to accomplish through your generosity. It could be something like this:
The company mission drives the ethos and vision of what you want to accomplish through your generosity.
We support strategic projects that will have a multiplier effect and will be self-funding after a reasonable time. It is our desire to bring these organizations to a new sustainable level.
We review the development project plan, budgets and management requirements and then provide them with the necessary growth plan.
Typically, the grant runs for 3 years and progressively reduces as the new sustainability increases.
3. Discern Your Company’s Values.
What are the values that you will use to filter the applications for funding? These are the values that you will measure them by. It can be short or it can involve a long list. It may be something like this:
Kingdom Expansion Our giving is earmarked for Kingdom Expansion. We define Kingdom expansion as: We would like to see that there is a clear gospel presentation to everyone the organization ministers to that will enable them to hear and respond to the message of grace. There must be a clear discipleship process. If the ministry does not provide it there must at least be partnership with another organization that help these new disciples grow to maturity. It is important for us to see that these new disciples are not left on their own but are part of a larger faith community, be it a life-group, home cell or church. This is to ensure that their growth is not just in knowledge but in accountability as well.
Kingdom Expansion Our giving is earmarked for Kingdom Expansion. We define Kingdom expansion as:
We would like to see that there is a clear gospel presentation to everyone the organization ministers to that will enable them to hear and respond to the message of grace.
There must be a clear discipleship process. If the ministry does not provide it there must at least be partnership with another organization that help these new disciples grow to maturity.
It is important for us to see that these new disciples are not left on their own but are part of a larger faith community, be it a life-group, home cell or church. This is to ensure that their growth is not just in knowledge but in accountability as well.
4. Discern Your Allocations.
Here you decide what your focus areas are. Is it thematic or geographic or both?
Thematic would include focus areas like:
- Church Planting/Evangelism
- Social upliftment
- Leadership Development
- Christian Media
Geographic Areas would include focus areas like:
- Your own city
- Your county/province
- Africa (here you could break it into different regions as well)
- Middle East
You may consider putting percentages to each of the above focus areas.
5. Establish an Application Process.
Think this through carefully. Make it easy for yourself. Cumbersome application forms and processes could become a frustration and would have you to constantly revise it. You may also decide here whether you want to open applications to the general public or whether you would rather do your own research and approach organizations.
In conclusion, it will be advisable to determine how often you want to make payments, annually, quarterly or monthly. Keep in mind that this is an area that could be somewhat labour intensive depending on the amount of organizations you are going to grant to. Whatever you do. Keep it simple and easy.
Danie was in pastoral ministry for 21 years, of which the last 15 years he spent as senior pastor of a vibrant missional church, which he planted in Kwa-Zulu Natal, South Africa. This church grew from a handful of people to just over 1,200 members. He also planted 38 more churches from this local church.
After his years in pastoral ministry, Danie established DAWN Africa, a church planting organization that focused on church planting mobilization in Sub-Sahara Africa. Within an 8-year period, church planting movements were started in 30 African countries. Danie is often referred to as the “White African with the heart of a Black Man” because of his understanding of and identification with the African culture.
During the last 9 years Danie devoted his time to the philanthropy space, assisting several American based foundations with their granting in Sub-Sahara Africa. Maclellan Foundation employed Danie as a consultant to assist them in their Africa granting. He then became the Executive Manager of the Mergon Foundation, responsible for granting in Sub-Sahara Africa as well as North Africa and the Middle East.
Danie has recently retired from his position at Mergon Foundation to dedicate his time to developing “Journey of Generosity” within Sub-Sahara Africa – a partnership between Generosity Path and Mergon.
He and his wife Cherise, a film producer, who is also producing Journey of Generosity videos for the Africa market, live in Cape Town, South Africa.