ChurchSafety

The issue of how to handle charitable contributions is a good problem for any church to have.  It's easy to avoid financial complications arising from contributions if you follow these simple tips.

• You're in charge. The church must approve of a love gift and control how the money is spent for the gift to be considered a charitable contribution.
  
  
• Different gifts have different rules. Love gifts are allowed in four specific circumstances. Each type of love gift has its own set of rules determined by the IRS.
  
  
• Just say "No."   Some gifts, such as land gifts, can be costly or burdensome to maintain.  You can decline any gift that you can't use or that has financial risk.
  
  
• Be prepared to issue a receipt. The donor may ask for a receipt for tax purposes.  The IRS has specific rules about when a receipt is needed and what information should be included.
  
  

• Endowments are different than gifts. Endowment funds are gifts which require all or a specified portion of the gift be maintained.  Typically, the governing board has authority to spend investment proceeds and/or a portion of the original gift.
  
  
• Be aware of restricted funds. Endowment donors can dictate a specific use of donated funds.  If the restriction becomes unworkable or obsolete, the donor can be contacted to release the restriction.
  
  
• Honor fund designations. As long as a church honors the donor's designation for the funds—or plans to do so in the foreseeable future—it typically is not obligated to return the contribution.
  
  

share this page