2051-07 From Foundation to Pastor at Church ZZeod

TO Jim@bcidot.org or to www.bcidot.org
       We have a situation where a tax-exempt Charitable Foundation, not an individual donor, made a contribution to a Board authorized Special Purpose Fund (Click Here) that we call our Annual Staffer Love Offering Fund. Our Church people participate in this endeavor during the Christmas season only and the Board distributes it to the staff as the annual Christmas taxable bonus.

TO Onliner:

       This is a little different, it is my experience that usually such a Foundation has a specific "distribution purpose" that does NOT include taking part in such a "Love Offering" effort. But I see no basic problems or issues in what you have described above.

TO Bcidot.org:

        We have recently faced a situation where such a Foundation has presented a sizeable grant (way beyond $1,000) for the senior Pastor only and not at the Christmas season, or it is not tied to the annual Christmas bonus, etc.   Please give me your thoughts on this.

TO Onliner:

        Yes, this is a little different. As I understand it, you are the Church's volunteer Accountant/Bookkeeper. If I were in your shoes I would be sure that it would be the Board of Leadership Chairperson who would deal with this and not you.

TO Bcidot.org:
        Thank you. I agree this is a matter that the Board should deal with. What actions do you suggest for the Chairperson?

TO Onliner:
        First, since this money is "up in the air" and the Church has no written Finance Policy covering such matters, I would follow the suggestions found in 5040 and either not cash the check or at least place it in a Suspense account pending resolution.   Then the Chairperson would dialog (preferable in writing) with people at the Foundation and learn a little bit more about why they are doing this and where they are coming from, etc. The Foundation "decision maker' is likely a constituent (maybe a leader, etc.) of your Church.

TO Bcidot.org:
        In your view, what other options does the Foundation have?

TO Onliner:
      First, if such a Foundation grant is consonant with the Foundation "distribution purpose" objectives, then such a grant to the Pastor could go directly to the Pastor and not flow it through the Church. The Pastor, of course, would still have to report it as taxable income, but the Church is not involved and it seems the Foundation does not have to render a form 1099, since it was not for services rendered to them, etc.

TO Bcidot.org:
       Thank you ..... any other thoughts?

TO Onliner:

      Yes, I would join and pass this issue by at least one of these two Online Forums

                        http://groups.yahoo.com/group/churchadmin/

                        http://groups.yahoo.com/group/metrochurchadmin/

        You will notice that a Church savvy attorney (Frank S) often contributes to this issue out on these Forums and might give you his comments therein

TO Bcidot.org:
       If this gets "sticky" here at the Church under our present set of circumstances, would you advice retaining this attorney to help resolve them and set it up so we have no such problems in the future.?

TO Onliner:
        Absolutely --- the sooner the better!