Scrip - Fund Raising  Endeavor    0101-02  ZZall

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                   TO: Interested Ministries                                                                          FROM: Jim Bramer, Retired Auditor-CPA
                                                                                                                 Nahum 1:7      FILE:     0101-02/all

                   RE: Scrip -  Fund Raising Endeavor                                                       Originated:  May 1998                    

        Below is a hypothetical Online Email thread (THRD) between any one of the following MFTeam members: PAT (Ministry Chief Executive), LEE: (Ministry Volunteer Treasurer), or FRAN: (Ministry Computer Bookkeeper) and   Click here and go to List of threads (THRDs) at

FR: Pat

            I have heard of SCRIP, or Scrip, as a source of Ministry Fund Raising. What do you know about it, and from your perspective as a Retired CPA-Auditor, who has helped primarily Ministry Finance Teams, is this legitimate? Is it a worthwhile endeavor.? What is your "spin" on this, Jim?


        We serve a number of MFTeams where the Scrip Store functions as a significant Ministry Fund Raising resource. I personally recommend it highly.  Some excellent information on this topic is found when you click on PTOTODAY

FR:  Pat

            OK, remind me just how does the Ministry gets any money via Scrip.

 FR: Jim

        To better understand the next paragraph, please see the suggested GLOSSARY of Scrip Store terminology below.
        The general idea is that a BUYER purchases, let’s say, $100 of a product via the Scrip Store and some $5 (RESIDUAL, or PERCENTAGE) of the Buyer's $100 remains at the Ministry for Ministry purposes only. The  BUYER pays $100 to the SCRIP Store and receives $100 of $CRIP --- which functions virtually as Cash and looks like a Gift Certificate when you buy $100 of that specific merchandise or product.


$CRIP - The actual Scrip certificate, or cash equivalent, that enables the BUYER to acquire the product.... as apposed to the SCRIP Store Ministry or endeavor itself.
ACCOUNT - Residence of accumulated available BUYER RESIDUAL credits.
ASSESSMENT - The agreed amount charged to the BUYER's  RESIDUAL  that goes to offset operating expenses of this Department; another term is Service Charge.
B A R - - Acronym for B)UYERS A)ccounts R)eceivable - BAR; the portion of the Scrip accounting system that maintains a record of what BUYER’s owe to the Scrip Store  or the amount of their overpayment, as applicable.
BUYER - - Entity putting out money to acquire $CRIP for the benefit of some RESIDUAL. This can easily be a different name than the RESIDUAL Account  name.
ENTITY - - Any person or group involved in the Scrip transaction process.
INTERNAL - - $CRIP purchased at cost and used for Ministry internal operating purposes.
PRIVATE - RESIDUAL that is "NOT" tax-deductible since it is used to pay someone's personal expenses at the Ministry/Church. Examples: Camp Fees; the Ministry’s Christian School Tuition; Vacation Bible School, AWANA, etc.
PUBLIC - RESIDUAL that is tax-deductible since it is used to fund authorized and Board  controlled Ministry/Church endeavors/projects like: Mission projects, Projects of various Church groups-Flock-Classes; appropriate Ministry-Church sponsored or controlled Events.
RESIDUAL - Difference between $100 and $95, etc. or the net amount accruing to some ENTITY's credit. The ENTITY receiving the credit could be an individual, a family or a Ministry authorized project. Sometimes called "percentage."  This Residual belongs to Ministry but resides in a respective BUYER's Account as an indicated Entit5y makes a choice as to just how it is to be used..
SCRIP DEPARTMENT - - Operations of this endeavor usually covered by a BUYER's Assessment; expense examples include Shipping/Handling expenses, Promotion Expenses and Ministry overhead-reimbursement costs.
SCRIP STORE --- View of this operation, giving BUYERs the general idea that a Scrip Inventory is available so they can walk in and buy from Inventory.
TAX-DEDUCTIBLE - A taxpayer can claim certain RESIDUALs  as a charitable contribution or donation; it will flow through the Ministry's Donation record keeping process so it is included in calendar year giving totals.

FR: Pat

            How exotic is this merchandise or products?

         FR: Jim

    That is the beauty of this program, Scrip is NOT for just expensive or exotic type of merchandise or products. They include almost all retail stores where each of us buy food and clothing, plus other ‘run of the mill’ consumer stuff that we buy all of the time. If interested, ask us at   for a sample of a SCRIP order form where such stores are listed.

FR: Pat

        Wow, it looks like a lot of RESIDUAL, or PERCENTAGE, could flow to the Ministry and be of substantial Ministry Fund Raising benefit. How does this usually work at the Ministry?

         FR: JIM

    The usual Scrip steps are as follows:

  1.   The Ministry makes the Scrip system known at a Ministry and ‘sells’ their constituents on the benefits to them of the Scrip program.
  2.   The Ministry establishes their Scrip Store system;  please Go Here  for information about the recommended Quickbooks (TM) (QB) bookkeeping system.   
  3.   The Ministry views this as their money, but determines the authorized Ministry BENEFICIARIES who can decide where to make the distribution.  See below for more info on this topic and for information about Scrip tax deductible aspects. Remember this money already belongs to the Ministry, even if some use choices are available to the BUYER or Entity.
  4.   The Scrip Store acquires a certain amount of $CRIP Inventory for sale.
  5.   BUYERS order specific products, pays the Ministry for it who deposits the money in their Bank Account; an example is $5,000.
  6.   The Ministry phone orders the products from Scrip and discovers the amount of money that Scrip will automatically charge to its Bank Account. Example: $4,750, plus $10 for shipping and handling.
  7.   The Scrip Company sends $CRIP ....notice the "$" which denotes a unique gift certificate .... virtually equal to cash, or "$", to the Ministry's Scrip Store..
  8.   BUYERS go to the Ministry Scrip Store and  pick up their $CRIP.
  9.   Most Ministries have a sufficient $CRIP inventory on hand so that a BUYER can go the Scrip Store and acquire $CRIP on a daily basis. Other Ministries carry hardly any Inventory and buy weekly only what BUYERS have ordered ... who then wait a few days to pickup from the Scrip Store.  
  10.   BUYERS use the $CRIP to make purchases at the merchant's store as if it were cash or a gift certificate.

    FR: Pat

   Very helpful, Jim, that gives me a pretty good picture of what is involved. However, it must be a real challenge to keep track of who is entitled to the percentage, or RESIDUAL, which is - per your sample above - the $250 difference between the $5,000 and the $4,750. Then, of course, the Ministry must cover such overhead costs as the above shipping and handling charge of $10.

FR: Jim

           Right ..... most Ministries charge each BUYER an overhead assessment amount for each order to cover such overhead costs. You are right, the bookkeeping needs to be done very carefully.  We highly recommend QuickBooks (TM) to care for such matters.  Please go  Here - Here - Here - Here - and  Here for more Scrip and eScrip information.

FR Pat

            Please give me some usual Beneficiary examples from the above Ministry owned Scrip Residual.

FR: Jim

         There are basically three BENEFICIARY Sections involved:

  1.  Ministry Sponsored Programs/Projects;  Ministry sponsored Trips; Missions - missionaries or projects; Group (like Sunday School classes) projects; Youth Camp Scholarships; College Age Summer Trips; Building Fund, or Equipment Projects
  2.  Money owed to the Ministry by the BUYER; School Tuition/fees of this Ministry School, Ministry Camp or Event fees.
  3.  Sometimes the BUYER is the Ministry itself as the respective Ministry Department benefits from discount purchasing. (2)

FR Pat:

    Does the BUYER have any type of Tax deduction in any of this?

          FR: JIM

           Yes, in my opinion, BUYERS in the first BENEFICIARY Section group above   (Ministry sponsored Program etc)  are entitled to a donation tax deduction.  This is because the Ministry owned RESIDUAL, or PERCENTAGE,  furthers the direct Tax Exempt purpose of the Ministry and the Ministry is in complete control.  BUYERS in the second BENEFICIARY Section above are NOT entitled to a Tax Deduction since the BUYER decides that it is to be directed for their personal purposes at the Ministry.
            You also might find this following $CRIP  Store annual report of interest:

This Year

Last Year

Number of Participant BUYERS at year end



Annual SCRIP volume

$ 131,471

$ 208,565

SCRIP Credits earned

$ 7,880

$ 10,230

SCRIP Credits used

$ 4,768

$ 8,020

Excess Carried Forward

$ 3,112

$ 2,210

Beginning of Year Available Credits

$ 3,447

$ 1,237

End of Year Available Credits

$ 6,559

$ 3,447

FR: Pat:

                Thanks for sharing, Jim. I will let you know if we have any more questions. 
Oh,  by the way, Are there ways to do this Online and not bother with carrying inventory and managing paper  $CRIP?

FR: Jim

            You're right on, Pat !  This is done via eScrip and it is a real blessing since you simply make complete arrangements in advance with both the Ministry and eScrip and then you buy at the applicable retail store virtually as you have always done.  The RESIDUAL from this eScrip process then regularly flows to the Ministry - - where it is available to be used like the Scrip Store RESIDUAL described above.  The RESIDUAL credit percentage, however, is  generally less than you get when buying via the $CRIP Store and there are fewer merchants involved at this time.  Click here  for more eScrip info

FR: Pat

    A Church Board Member has asked about the whole issue of such an endeavor being subject to the IRS's Unrelated Business Income Tax, etc. ---- as applicable to a Church/Ministry when they operate a business, etc.  No way do we want to have to pay taxes or have an undesirable relationship with the government.  What is your view of this, Jim?

FR: Jim   

        As most fund raising endeavors at a local Church/School/Ministry, I believe this is NOT a "Business" and has NO "Unrelated Business Income Tax" exposure because it is very much a sideline of the major purpose and activity of the Ministry,  Plus it is usually handled by Ministry volunteers and the Scrip users are usually the Ministry�s constituents and not the �outside� world, etc.  But I have no IRS references to confirm any of this.

      This publication originated in May 1998 and was  . UPTD: January 03, 2010


          (1) An Onliner Document, or WRIT (Writing), may be applicable to all Ministries, or it may be designed for just groups like: Evangelical Church, School, Missionary Agency or Organization, Christian Camp / Conference, or other named group.
          (2) WRIT formats include the perspective of   via IOMs (Inter-Office Memos) to the Ministry Finance Team (MFTeam); THRDs, a hypothetical Online conversation with members of the MFTeam; GLEANINGS, or Scripture within context of the MFTeam; FWIW; A periodic editorial (For What it is Worth); TRUISM, or believed Ministry Finance principles; and via FAQ, response to Frequently Asked Questions