Donor Designated Gifts

Tuesday, January 15, 2019

Hey Fletch … I heard that if a donor designates a gift made to our church, we cannot provide the donor with a receipt under the theory that designated gifts are not tax deductible. This does not seem correct. Help!

DRF—There are several questions floating out there about restricted gifts to churches. I’ve consulted with my friend Dan Busby, President of the Evangelical Council for Financial Accountability. Here are his thoughts.

There are many types of designations (restrictions) donors may place on gifts. However, in general, donors can designate gifts given to your church, and the church can legitimately provide charitable gift acknowledgments for the gifts.

Very basic designated (restricted) gifts might include the following:

Missions fund
Building fund
Debt retirement fund
Staff Christmas gift fund, with the church board, or appropriate committee, deciding how to distribute the Christmas gifts to staff (these are taxable payments, reportable on Form W-2)
Scholarship fund, with the church board, or appropriate committee, deciding which students qualify under church policies to receive a college scholarship
Benevolence fund, with the church board, or appropriate committee, deciding which benevolent recipients qualify under church policies to receive assistance

About the Author: David Fletcher

As an experienced pastor, Fletch knows church life. As a professor, he delivers insightful material. As a seasoned coach, he helps you grow. Dr. David Fletcher is often called "The Dean of Executive Pastors." Fletch was a pastor for 35 years in churches from 1,000-8,000 members, single and multisite, churches with mergers, camps, schools, apartments and cafés. He founded XPastor in 2003 and its 1,500 free articles from over 450 authors have become a principal resource for leaders in a complex church world.