“Reach out and touch someone,” or say “charge it!” These are two of the newest ways Christian organizations have found to raise funds.

Popular among charities for several years now, joint ventures in which a sponsoring group receives a percentage of some for-profit business, such as long-distance or credit-card charges, promise a continuing source of revenue for the nonprofit groups, “painless giving” for donors, and an increased market for the businesses involved. But as Christian organizations have recently entered into such ventures, many of the promises so far have gone unfulfilled.

Almost across the board, Christian groups are facing a squeeze on donated income, according to Arthur Borden, executive director of the Evangelical Council for Financial Accountability (ECFA). Ministry budgets have continued to expand. And though donations have risen, the cost of obtaining them has gone up as well. So organizations increasingly are looking for other sources of income.

While many new approaches simply represent good management of resources, such as renting out facilities or expanding publishing divisions to generate profits, Borden says, others have created marriages of ministry and commerce that could lead to trouble once the honeymoon is over.

Playing The Percentages

Two years ago, the affinity credit-card business was booming, according to the NonProfit Times. The cards, issued by a bank with the name of an organization stamped on the plastic, typically rewarded the sponsoring group with about ½ of 1 percent of each billed transaction. Visa U.S.A., for example, reported that it had issued more than 15 million affinity cards (of 110 million Visa cards in circulation) through more than 1,200 programs. Returns of several hundred thousand dollars per year were common among large groups.

Though some financial experts say the credit-card market has peaked, competition among banks and other institutions has driven heavy promotion of affinity cards to new markets, including Christian schools and organizations. What poses a greater concern to Christian groups, however, are ethical questions surrounding the use of credit. Most Christian financial advisers caution against credit cards; some preach vehemently against them.

“I am distressed that a Christian organization would encourage believers to incur indebtedness to benefit the ministry,” said Ed Hales, executive director of the Christian Stewardship Association. “There are legitimate uses, and [credit cards] are often necessary for travel. But the potential for problems is there.”

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As a result, many Christian organizations, while aware of the fund-raising capabilities, have steered clear of the cards. However, a small but growing number are signing up, including Biola University Alumni Association and the Association of Christian Schools International. And though they have yet to see the cards generate substantial income, they agree that “every little bit helps.”

The Christian Ministries Management Association (CMMA) offers its members an affinity card along with a list of other benefits that includes rent-a-car and moving-van services (that also pay back the association). Executive director Sylvia Nash said she believes CMMA members use the card responsibly, and in no way does the organization promote the misuse of credit.

The affinity cards “are best suited to associations, which charge membership fees and are looking to provide benefits in return,” rather than organizations looking strictly for support, she said. Last year the card added about $3,000 to CMMA’s budget of just under $1 million. Though that amount is small, it is growing steadily, Nash said.

Phone Funds

Another highly promoted fund-raising strategy is the “reselling” of telephone long-distance service. Typically, a for-profit company known as an “aggregator” in effect resells AT&T or MCI long-distance service to the members of a sponsor group, such as the National Association of Evangelicals or Concerned Women for America, which have recently offered such plans to their members. The sponsor is responsible for promoting the plan and signing up customers among its membership. The aggregator, which receives a discount from the phone company for providing a large block of customers, takes a share of the monthly billing for its costs and profit, and agrees to return from 2 to 18 percent of each bill to the sponsor group.

Though such long-distance fund-raising programs promise an easy source of continuing revenue—after all, everyone uses the phone—their track record remains short, if not suspect. An executive of a well-known Christian organization described his experience with one resale program a “nightmare” of hidden costs and unfulfilled expectations.

While admitting that his organization rushed into its decision, the executive, who asked that the names of the parties involved not be published, said he uncovered minimum charges, switchover fees, and restrictions that had not been clearly explained. After spending $7,000 to promote the service to some 33,000 constituents, the organization received only 230 responses. Customers who signed up last December have not yet had their billing switched over, and the organization, which has yet to see any returns, is considering legal action against the reseller.

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Even resale organizations that pride themselves on full disclosure admit that the payoff for sponsors comes with large numbers. In one instance, a total of at least 500 “billing units” (one unit equals $25 of monthly long-distance charges) is needed to qualify. So most promotion is directed at large organizations or denominations.

Tax Restrictions

In addition to the other problems found in these computer-age fund-raising approaches, the shadow of “unrelated business income tax” casts doubt on the ultimate value of such schemes. Revenues from the sale of goods or services not directly related to the tax-exempt purpose of a nonprofit organization are subject to taxation. And even though the individual contract arrangements for affinity cards or long-distance services may avoid the tax, the government is taking a closer look at such income and will likely tighten restrictions on it, tax experts predict.

With so many complications, ECFA’s Borden doubts that such joint ventures will prove to be a financial salvation for Christian groups. And he raises one last concern: “Is it part of Christian stewardship to develop a ‘painless’ way to give? I think Christians want to take an active part in their decision to give. That may be old-fashioned, but I think it’s healthy.”

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