ECCU Blog

I’m often asked questions by people who want to help someone in need through the church’s benevolence fund. It typically starts when a member of the congregation becomes aware of a need and wants to help meet it by making a contribution to the benevolence fund. The member intends for that donation to provide assistance to this needy individual or family. So how should you handle this type of situation to maintain compliance with IRS rules?

The principle I try to emphasize with ministries I work with is to keep the collecting of benevolence funds completely separate from evaluating and disbursing benevolence funds. I use the analogy of not letting the right hand know (or influence) what the left hand is doing. We are all one body in Christ, but we need to keep a distinct line between donors and recipients. Let me explain.

• Any donor or congregation member can let the church staff or benevolence team know of a family or individual who is in need. We certainly want to encourage this behavior. Sharing a testimony, thank-you, or the result of donated funds helps communicate the joy that real needs are met through benevolence gifts.
• The benevolence team should receive requests for help or assistance and process them using discernment and judgment according their benevolence guidelines. These individuals should not be influenced by any donors, but rather by the need of the individual or family.
• Contributions to benevolence funds may be claimed as charitable tax deductions if they are not earmarked for particular recipients. If a donor or congregation member wants funds to go directly to an individual or family, they should give those funds directly to that individual or family. A donor can’t designate that benevolence funds go to a specific person and still receive a tax-deductable receipt. The church must maintain complete control over who receives benevolence funds.

During the holiday season, benevolence requests often increase. Let’s take this opportunity to bless as many as we can with the joy of Christ’s birth while doing so in a manner which also honors and respects the IRS, because we are subject to their authority.

A good friend reminded me that today, November 19^th is the 149^th Anniversary of the Gettysburg address.  Less than 30% of the people of the United States in 1863 supported President Lincoln.  Over 95% of the newspapers in the United States, after the address was given, said, “…it is not worthy to read.”

 Take a few minutes to read this address which along with the Declaration of Independence are the keystones of American Philosophy:

 “Four score and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal.

 Now we are engaged in a great civil war, testing whether that nation or any nation so conceived and so dedicated, can long endure.  We are met on a great battle-field of that war.  We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live.  It is altogether fitting and proper that we should do this.

 But, in a larger sense, we can not dedicate – we can not consecrate – we can not hallow – this ground.  The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract.  The world will little note, nor long remember what we say here, but it can never forget what they did here.  It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced.  It is rather for us to be here dedicated to the great task remaining before us – that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion – that we here highly resolve that these dead shall not have died in vain – that this nation, under God, shall have a new birth of freedom – and that government of the people by the people, for the people, shall not perish from the earth.”

This is the final post in our series of email interviews with presenters for the upcoming 2012 Financial Forum for Ministries.

Dave Moja is a partner and national director of not-for-profit tax services with CapinCrouse LLP. He will discuss recent Internal Revenue Service (IRS), congressional, and court pronouncements. He’ll also talk about ministers’ payroll and unrelated business income as well as health care compliance issues. Here are Dave’s responses to my questions.

MBG: How will your presentation help attendees serve their ministries?

Dave: The tax laws affecting churches and ministries are constantly changing. And, in many cases, the accounting teams at these organizations do not have a central place—no “one-stop-shop”—where they can go to keep up with all these changes. This session will provide up-to-date information on tax and compliance issues that should be pertinent to attendees. They should leave better equipped to handle the continual onslaught of government requirements. We are most definitely in a “season of compliance.”

MBG: What are three important takeaways attendees will learn during your presentation?

Dave: The first thing attendees will take away is a summary of recent IRS pronouncements that affect their ministries. They will also receive practical insights and a list of the best methods for handling not-for-profit tax and compliance issues. A third takeaway will be predictive insight into what new requirements are expected in 2013 and beyond.

MBG: How will the format of the forum make it an even more valuable learning experience?

Dave: I will tackle the daunting task of keeping up with compliance issues by providing a number of handouts that should allow attendees to focus on the presentation and take valuable data with them for future reference. This kind of material is best explained in a give-and-take format, so attendees will have ample opportunity to ask questions.

Dave will present at the financial forum in Colorado Springs on December 4, 2012. Follow this link to learn more and sign up.

According to GuideStar’s recent survey of nonprofits, for the first 9 months of 2012, 34% of nonprofits reported an increase in donations while 37% reported a decline. These mixed results are attributed to the lasting effects of the Great Recession and slow economic recovery.

The major cause cited by 77% for the decline in donations was smaller gifts from individuals when compared to previous years. The other major cause was fewer individual gifts.

In addition, 30% expected year-end giving to be higher than last year while 29% expected giving to be lower. 

Surprisingly, 42% of nonprofits were planning on increasing their 2013 operating budget when compared to 2012.  32% will keep budgets the same and 24% will reduce their budget. 

How are you and your ministry viewing 2013?  Are you planning for an increase in donations?  Planning for things to be about the same or lower?  With so much in economic uncertainty right now, cautious and prudent planning for 2013 seems appropriate. 

Grateful we can trust God for the just the right amount of resources we need.

This is the fifth in our series of email interviews with presenters for the upcoming 2012 Financial Forum for Ministries.

Brian Kluth is former senior pastor of the First Evangelical Free Church in Colorado Springs, who commissioned him as a generosity minister-at-large to the global church, and founder of Maximum Generosity. He will appraise current funding realities in churches and ministries today and share best practices and resources that staff and leaders can use to inspire generosity and increase giving. Here are Brian’s responses to my questions.

MBG: How will your presentation help attendees serve their ministries?

Brian: Growing economic difficulties are leading to decreased giving in many churches and ministries. As a result, they’re having to adjust to a “new normal” when it comes to finances, fundraising, and budgeting. This session will help attendees discover practical and creative ways to move their ministries forward in the midst of tighter budgets and a challenging fundraising climate.

MBG: What are three important takeaways attendees will learn during your presentation?

Brian: Empty Tomb, Inc., reports a 40-year decline in the percentage of income that Christians in the United States donate. The first thing attendees will take away from this session is an understanding of how major national trends impact giving to ministries and churches. They will also discover ten ways God provides and moves ministry forward, including nine that are possible even when the budget says “no.” The final takeaway is a list of five key ingredients needed to make any fundraising and generosity initiative more successful in churches, ministries, and the work of missionaries.

MBG: How will the format of the forum make it an even more valuable learning experience?

Brian: A variety of valuable materials will accompany the presentation, including graphs on giving trends, lists of the 50 best practices to increase giving and 80 helpful websites, planning worksheets, and other generosity-related handouts. Attendees will return to their churches and ministries with many resources to share with staff, leaders, and committees.

Next up will be Dave Moja, a partner and national director of not-for-profit tax services with CapinCrouse LLP, who will discuss recent Internal Revenue Service, congressional, and court benefits. He’ll also talk about ministers‘ payroll and unrelated business income as well as health care compliance issues.

Brian will present at the financial forum in Colorado Springs on December 4, 2012. Follow this link to learn more and sign.