How to Handle Designated Contributions to Your Church
FREE 4-Page PDF to download and distribute to your church leaders:
How to Handle Designated Contributions to the Church (72 kb PDF)
The following is the introductory paragraph of Keith's 4-page document on Designated Contributions:
“Designated contributions” which include love offerings, too, are contributions made to a church with the stipulation the donations are used for a specified purpose. As a general principle, a donor can receive a charitable contribution credit from the church if the church handles the designated contribution properly.
Designated funds cannot be spent on unintended purposes unless a prior written agreement has been established by the church. Without a prior written agreement in the church documents, legally, the only way a church can change the purpose of a designated donation is by court order. If the cash donation is for an approved project or ministry of the church and the designated fund has been established, the cash donation can be recorded on the donor’s contribution statement.
Designated funds created before the church adopts a new written church policy will not be impacted by the new policy. The church must operate under the original terms (verbal or written) that were assumed when the existing designated funds were established. The new written church policy will impact only new designated funds created after the policy is approved by the church.
Contributions designated to a group or organization within the church (i.e. Sunday school class) for the organization’s exclusive use and under its total control is not a deductible contribution to the church. (The class is not a 501(c)(3) organization.) The church cannot add the designated contribution to the donor’s contribution statement because the church does not have any control over the contribution.
The following 4-page document includes:
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Suggested Steps in Establishing a Designated Fund
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A Working Model of a Designated Fund Policy
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Sample policies for seven common designated funds (Benevolence, Memorial, etc.)
FREE DOWNLOAD: How to Handle Designated Contributions to the Church (4-page PDF)
Download instructions: Right-click link and choose Save Target As... then save to a familiar place on your hard drive. You will need the free Adobe Acrobat Reader to view and print this PDF document.
If you have trouble downloading this document please feel free to e-mail me (Craig Webb, editor).
This document is intended to provide churches and church leaders with current and accurate educational information about the subjects covered. However, such information is not intended to be sufficient for dealing with a particular legal problem, and the authors and distributors do not warrant or represent its suitability for such purpose. The reader should not rely upon this document as a substitute for independent legal consultation or tax advice.
About Dr. Hamilton
Keith Hamilton, D.Ed.Min, CFP, CRPC is with the Georgia Baptist Convention. He has written several publications on establishing church designated funds, managing your household finances, and protecting your church and ministry from identity theft. Check out www.churchfinancialservices.org for more help. Other articles by Keith...
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