Wednesday, April 3, 2019
Hey Fletch … Our church provides direct support to several international missionaries. What are the issues we should look at to provide this support with the utmost integrity?
DRF—There are so many 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.
Dan—There are two primary concepts when it comes to direct missionary support by a church:
1. Support from the missions fund or from the overall budget of the church. Some churches use a “one-fund” budget approach with all gifts (no designations, or very limited designations, accepted) going into one unrestricted fund. Support of particular missionaries is then paid from the single fund. Gifts to the single fund qualify for a charitable gift acknowledgement.
2. Donations to support specific missionaries. Here is where things get tricky! To avoid gifts being treated as nondeductible earmarked gifts, contributions to support particular missionaries must qualify as giver-preferenced gifts. This means the gifts must be preferenced to support the work carried out by a particular individual but not designated (restricted) for the individual. The preferencing language must be used in communication with potential givers. How does a church accomplish this?
Here is some wording to use:
- Gifts in response to this communication are gifts for the use of the church. The opportunity to preference your gift to support the ministry of a particular missionary is secondary to identifying the gift for the church.
- This particular missionary’s ministry is being conducted under the direction of the church (or under the auspices of a missionary-sending organization, if the church is supporting the missionary-sending organization instead of directly supporting the missionary). In some instances, the missionary may only be partially supported by the church. In that case, perhaps the missionary’s ministry may be described as being partially conducted under the direction of the church.
Here is some wording to avoid:
- “One hundred percent of all contributions designated for ‘Mary Missionary’ are provided to her.” Instead, an appropriate statement might be: “One hundred percent of all contributions designated for use on the mission field are sent to the mission field.”
- Your gift will be placed into an account for Mary Missionary and everything in the account is available to her.”
- “Thank you for your gift to Mary Missionary.”
If the church is providing missionary financial or project support to a missionary-sending organization, it is the responsibility of the sending organization to determine that the funds are properly utilized on the field. However, if the church is providing missionary or project support directly to missionaries, the church assumes the responsibility for providing oversight of the ultimate use of the funds.
To learn more about designated (restricted) gifts, get free access to more resources at: ChurchExcel.org or obtain a copy of The Guide to Charitable Giving for Churches and Ministries.