Combined Mission Org & School Issues 8910-02 ZZmis

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                 TO:  Interested Churches                                                                                                 FROM: Jim Bramer, Retired CPA-Auditor
                                                                                                                                                                  FILE: 8910-02/mis

Finance Issues at Combined School and Mission Organizations              Originated:  October 2007                                          

           Below is a transcript of a hypothetical Online conversation, or THRD WRITING, between  and these possible  M)inistry F)inance Team  MFTeam members:  PAT (the Ministry Executive)  LEE ..(the Board Treasurer)  and  FRAN .. the Ministry Computer Bookkeeper.  Please Click here and go to List of other threads (THRDs) at


         Fr:  LEE

      Jim, I am the Board Treasurer of  XYZ Mission Organization -- hereafter referenced as XYZ.  Of course, we are the usual Mission Organization as we fiscally operate within the frame work of a  General Purpose Fund  with operating departments and a variety of   Special Purpose Funds  that you advocate within your  0041  publication.
      Our objective, as a Christ-Centered Bible-Believing Mission Organization, is to get the Good News (Gospel) about the saving grace/power of our
Lord Jesus Christ out to all areas of the world via all possible ways and means.  Our methods in doing this includes both  Training   and  Sending efforts. Please notice the following information below:


        01>  Some singles come to XYZ following High School as if they were going to various well known Bible Schools or Universities
        02>  Some singles come here after attending some part or all of a College or even a Seminary
        03>  Some married couples come here after attending some part or all of a College or even a Seminary
        04>  Virtually any one who meets XYZ's qualifications, but most participants fall into the first 3 classifications

  XYZ's Resources:
        01>  Appropriate infra-structure including qualified paid Administrators, Teachers/Instructors
        02>  Class rooms and related teaching materials.
        03>  Some "Room and Board" campus facilities for interested Participants

   Finance and/or Funding Issues:
        01>  Each Participant agrees to pay XYZ  for this
        02>  Amounts are xxxx if they live on Campus while here and yyyy if they live off Campus, etc.
        03>  Participant's financial needs are met
                    a>  Via their own resources
                    b>  Via qualified XYZ  Scholarships  provided by Tax Deductible contributions from interested donors
                    c>  Via non Tax Deductible receipts from interested parties. 
        04>  Meeting the overall
Training  endeavor needs at XYZ
                    a>  Via qualified Restricted or Unrestricted  Tax Deductible contributions of Interested Donors
        05>  This 
Training  endeavor is a department of our  General Purpose Fund


   Our major endeavor, or thrust, of course, is to get these trained Participants out to the appropriate world-wide Mission Fields as XYZ carries out its overall exempt purpose.   These participants have completed their above Training with us and are now eligible to be full-time XYZ Missionaries; although some, for a variety of reasons, do not choose this vocation.  This means that this trained  XYZ Missionary must "raise" their financial support.  Let me share below about such matters:

    01>   The XYZ Missionary Unit  (we'll  reference this as a "Unit" below and it might include husband/wife/kids, etc.) must obtain pledges/promises for  xxxx amount of money before they can go to their XYZ Mission field.
    02>   Our corporation, or XYZ,  is a qualified Tax Exempt Non Profit Organization
    03>   All of these restricted  donations for each "Unit" come in via checks payable to XYZ.
    04>   These donations go to an individual XYZ  Mission account per the name of the "Unit", or each "Unit" account is one of our  Special Purpose Funds
    05>   The XYZ Mission is allocated 5% of each donation to a "Unit" for coverage of XYZ's Overhead costs
    06>   At the agreed time, the "Unit's"   Special Purpose Funds     account balance    is sent to them


     Good ... a similar Missionary Organization functions in like manner as you do, but they refer to their Participants in Training as Non Members  and their approved  Missionaries as  Members.   Within that context, please note the following....

      >>  When someone is in training they can be viewed as a Student ("Non Member")  and the Student is expected to pay the equivalent of Tuition and/or Fees  for taking classes there.  This is a contractual payment agreement between XYZ  and the Student  ("Non Member").
   >>  When someone becomes an XYZ  Missionary (
"Member")  then the appointed/qualified Missionary obtains money via a  "Donation Pledge", or a contributor promises to pay, etc.  Or it is not based upon a stipulated contractual  amount like the above ("Non Member") Tuition and/or Fees arrangement.  Please Go To  and search on their web site for their excellent information on the topic of "Deputized."
      >>  Of course, all of this is within the context of your  Finance Policies and Procedures.

 Fr:  LEE

    OK, Jim, I believe I understand the difference between  a Student ("Non Member") and a Missionary ("Member") at a Ministry like ours.  Now please give me some scenarios of various types of payments that we receive in covering the above Student and/or  Missionary financing.
    I particularly had some questions about a Church helping our Participants ---  especially in the tricky
Training area (you have used the term Student) above.  Let me state in my own words what I understand so far.

    a>   A Church can help one of our qualified Participants in Training in virtually any way it sees fit.  But there are dangers in allowing a "Pass Through"   via a Church and we should not  get involved in such a process.  And it seems that any money processed via some type of Church  Benevolence Fund   or via some type of Church  Scholarship   endeavor is not ideal.
    b>   Once a Participant becomes a Missionary the Church can be a part of supporting their Missionary effort just like a Church would do in any other approved Missionary serving via any of the other Mission Agencies.
    c>    If Church people want to directly financial assist such a Student (
"Non Member")  or a Missionary ("Member") of our Mission Organization they must carefully adhere to the  Scholarship  and/or  Deputized   features that you have set forth within this publication.


    Sounds like you got it, Lee.   Yes ... this can be a little confusing, or tricky as you say.  Let me share from my perspective about these matters via the following grid contents as to "Receipts of a Missions Organization"

           ** Sources**          ** Tax Deductible**
    Church  Tax Payer   YES No Non Issue
Receipts for the School Endeavor            
  Via Church GPFund or Mission SPFund xx         xx
  Via Church "Pass Thru"  (1) xx         xx
  Via Church "Benevolence Fund" (2) xx         xx
  Via Church Approved Scholarship Effort xx         xx
  Via Usual Tax Payer approved             
         restricted Scholarship purposes   xx   xx    
  Via Usual Tax Payer unapproved            
         Scholarship purpose   xx     xx  
  Via a Tax Payer for unrestricted purposes   xx   xx    
Receipts  for the Missions Endeavor (3)            
  Via Church GPFund & Missions
xx         xx
  Via Church "Pass Thru" (1) xx         xx
  Via Church "Benevolence Fund" (2) xx         xx
  Via the usual Tax Payer   xx   xx    
      (1)  Not IRS Approved            
     (2)  Must be done correctly            
     (3)  Via the Deputized Method            


Fr:  LEE

      This above grid about "Receipts of a Mission Agency" helps a lot, Jim.  
      After I went through the " FREQUENTLY USED TERMS and LINKS"   that you reference below, Jim, I  understand better as to what you mean by some of the above terminology, etc..   


   Let me know, Lee, if you still have questions in the application of such matters.


    Benevolence Click Here  for details about such issues at a Church.
 Church  =  Click Here  for a list of resources on 
    Deputized =  Click Here   and search for details of a method by which a Missionary raises their financial support allowing Donor Tax Payers to take such payments as tax deductions for said payments to a tax exempt Missionary organization..
    GPFund =  G
eneral Purpose Fund; or single GPF 
    Fund Accounting  = As set forth within this 0041  link contents
    Member = another term for an approved Missionary of a Mission Organization
    Mission Organization =  Click Here for more information on this web site for such Ministries.
    Non Member = a Student equivalent at certain Mission Organizations
    Pass Through =  money given to a Church and the donor requires you to "pass it on" to the person/or entity they specify.  Please  Click Here  for more information.
    School Accounts Receivable =  Click Here  for list of resources on 
    Scholarship =  Money available as managed by a tax exempt Non Profit Organization as they determine the recipients --- not the Donor.  Please Click Here for more perspective.
    SPFunds =
Special Purpose Funds; plural SPFs
    Student = in this context, a
Non Member of certain Mission Organizations. Usually a potential Missionary (Member) upon completion of such schooling.    
    Tax Deductible = Means by which a Tax Payer can write off appropriate contributions/made to Tax Exempt Ministries.
    Tax Exempt Ministries =  Non Profit Organizations that can accept contributions/donations as tax deductible expenses by the Tax Payer..
    Tax Payer = Tax paying entities like Individuals, Corporations, or Partnerships etc,  Applies to Federal and State entities.

    Please Click here for list of Church resources here on  The bulk of this Publication originated in October 2000 and was UPTD: April 20, 2010 Click here and go to List of threads (THRDs) at