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TO: Interested Churches
Jim Bramer, Retired CPA-Auditor
RE: Benevolent Fund Thoughts/Protocol UPTD: March 09, 2012
Below is a transcript of another hypothetical Online conversation, or THRD ONLINE DOCUMENT, between Jim@bcidot.org and members of a M)inistry F)inance Team - MFTeam: the MFTeam members are PAT .. the Ministry Executive, LEE .. the Volunteer Board Treasurer, and FRAN .. the Ministry Computer Bookkeeper. Click here and go to List of threads (THRDs) at www.bcidot.org
Jim, our church needs to address some matters concerning our Benevolent Fund (I understand some churches have a different name, like Deacons Fund or Giving Fund) as we use this fund to help members (or regular attendees) who are in financial need. Do you have any information to share with me on this topic?
Yes, Lee, for example, issues come up when people want to send financial help to others through your church; often with a tax deduction in mind. Please note the links below which speak to matters related to this.
Personalized Giving 0020
Church and Missions Funding 5015
Mission Org & Designated Giving 8501
Financial Policy Matters 0081
Below is a copy of a recent memo sent to a Church Treasurer as it sets forth information that your church needs to consider. I trust you find this helpful.
TO: Mrs. ABC, Church Treasurer
RE: Benevolent Giving Protocol/Policies at your Church
FROM: Jim Bramer, Retired Auditor - CPA
Church Benevolent Fund administration and tax deduction matters continue to come up. Please consider the following:
>> People in a church body should be open to helping their fellow church family members when there is a financial crisis. We are aware that calamities come our way when we have limited, if any, financial or material resources. Many Churches periodically ask in/around a worship service for a general contribution to the Benevolent Fund that is discretely distributed to those in financial need.
>> But we often want to personalize such a contribution because we think we know of some real need within a Church family. It is also good stewardship by Donors to have a Benevolence Group (could be a sub-committee of your Board of Leadership or it could be assigned to a Pastor or other qualified leader) as they verify that there is in fact a real need of a Church Constituent. A Church Constituent is defined as a Church member or someone who regularly attends and is viewed as part of the church family.
Notice...generally Benevolent matters are limited to only these folk and do not include attempts to transfer financial resources through the church from/to biological family members. Of course, It is good stewardship for the donor to reduce their personal income taxes as a result of such generosity, but it should not be their primary motive.
>> When the good stewardship features above happen, then the Church Benevolent Group, representing the Church Board, is in control of this process and, in essence, meets the criteria that the money (or a Non-Cash Gift in Kind) going to this Church fund is tax deductible.
>> Regardless of a need out there, a donor can NOT make out a check to the Church and then ask the Church to blindly send it's check to someone of the donor's choice. Often this "pass-through the Church" motive is to get a tax deduction. Such an effort must comply with the protocol outlined above. There must be a mind set that the donation is not to the recipient, but to the Church in furtherance of it's exempt purpose - which, or course, includes helping people in financial need.
>> When appropriate, the Benevolent Group could discretely make a person's need known to the Church body. Response donations can be marked for a specific needy person, but the Benevolent Group is in control of their final distribution. It is entirely possible that more might come in than is needed and such donations could be used for general Benevolent Fund purposes.
>> If such help is in the form of a substantial non cash gift (like equipment and/or vehicles) then, ideally, the title should first come to the Church and then to the recipient, etc. Of course, like all such gifts, dollars are assigned to such gifts and they flow in the appropriate non-cash gift fashion through the books of the Church.
Thanks, Jim. We will look into this and then include it with other written financial policies like you mention within 5005.
Please Click here for list of Church resources here on www.bcidot.org. The bulk of this Publication originated in March 2001 and was UPTD: May 09, 2011
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