by Mark Jones

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.

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  1. Terri Denicke @ 2012-11-27 08:42

    What is the best advice regarding the benevolence team awarding funds to employees? Under what circumstance would/could it be considered income to the recipient?

  2. Mark Jones @ 2012-11-29 14:13

    Great question Terri! Whenever you are dealing with a benevolence request which involves an employee of the ministry, there are tax issues to address. The IRS Code requires all benevolence payments to employees be treated as taxable income. It doesn’t matter even if the payment made on their behalf, such as to a medical provider. The amount is still considered taxable income reported as W-2 wages.

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