2019-07 Scrip and Charitable Contributions

2019-07 Scrip and Charitable Contributions - ZZeod

"EDITED ONLINER DIALOGS"

TOPIC: SCRIP and Charitable Contributions                                                                                     UPTD: April 28, 2008

TOPICAL OVERVIEW:   This School has a SCRIP fund raising program and this dialog provides some thinking about aspects of tax deductibility, or Charitable Contributions.                                                                   FILE: 2019-07

TO FORUM:

        In inter-acting with you recently, Jim, you said that the portion of SCRIP that goes to the school is tax deductible. I just wandered how that can be when you purchase say $100 in $CRIP for groceries and you personally get a full benefit of the $100. Technically, the 6% that goes to the school should pertain to the Grocery Store as they sell the certificates to the SCRIP Center (where the Ministry obtains the Scrip to sell) at a discount. Please explain.

TO: Onliner 01

        Your questions are right on .... no doubt the Grocery Store and the SCRIP Center are economically benefiting, but the real issues here concerns the economic benefits having to do with the Ministry, the BUYER and the Residual Decider (R.D.). You will note from info within the EMAIL APPENDAGE below that the RESIDUAL ( the hypothetical $6.00) is the only amount that is potentially tax deductible. And then only if the R.D. chooses to have it go to something where the school is in charge of its use .... like your "PTF Project"; School's "Schar Emergency Fund", or to your "Deficit Retirement Fund". It is NOT tax deductible if the R.D. chooses to reduce their tuition and fees at the school, since they are using it to pay a personal expense.

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D E F I N I T I O N   O F S C R I P    T E R M S:

RESIDUAL

        A Buyer purchases $100.00 worth of SCRIP for $100 and buy $100 of product or merchandise. The difference of $6.00 is the RESIDUAL that either goes directly to the Ministry or is setaside for this Ministry's purposes as decided by the Buyer or person of their choosing. - see Residual Decider below.

RESIDUAL DECIDER (R.D.)

        Person who makes the choice as to the ultimate use of the RESIDUAL of $6.00. Choices of use at the tax-exempt Ministry include:

The R.D. pays for personal NON tax deductible purposes like: 1> Ministry's School Tuition and Fees; 2> pay for Ministry event or outing (AWANA, Vacation Bible School - VBS) -- any Ministry program expense reimbursement.

the R.D. makes a tax deductible donation to any Ministry controlled project. Examples include: 1> Ministry's Building Fund, 2> Mission Project, 3> Mission Trip, etc.

        Process usually is for the RESIDUAL amount to accumulate in their account and then the R.D. has sums transferred to the account of their choice.

BUYER

         People who pay for the $100.00 SCRIP who is sometimes not the RESIDUAL DECIDER (R.D.). Examples include grandparents who buy and pay for things with the $100 of SCRIP but the $6.00 RESIDUAL goes to Dad/Mom (RESIDUAL DECIDER) who use it for the benefit of a grand child or Dad/Mom's activities at that Ministry.

$CRIP USER

           $CRIP is the same as cash, or 'green stuff.' So anyone in possession can take the $CRIP and make purchases. CAREFULLY HANDLE LIKE CASH. $CRIP is now becoming more and more available in plastic where it is often used for family gift certificates.

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          As most of you know, we here at www.bcidot.org   dialog by email with Onliners regarding Ministry Finance (MinFin) matters. Above are what we call "Edited Onliner Dialogs", or edited version of actual dialogs with some of you, but we have honored your privacy and not used your name or that of your Ministry. Our purpose is to make topical MinFin information available to any interested Ministry Finance Team so you can learn from one another.. Let us know if you would like to dialog on a Peer to Peer basis with the other Onliner involved and we will try to put you together.   Thanx - Jim Bramer - Proverbs 9:10

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