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
More detailed issues relating to designated gifts will be covered in later posts on this topic. To learn more about designated (restricted) gifts, get free access to more resources at: ChurchExcel.org or by getting a copy of The Guide to Charitable Giving for Churches and Ministries or the smaller booklet Charitable Giving Guide for Giver-Restricted Gifts.