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Simple Tips for Receiving Charitable Contributions
Simple Tips for Receiving Charitable Contributions
It's easy to avoid financial complications arising from contributions if you follow these simple tips.
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The issue of how to handle charitable contributions is a good problem for any church to have. It's easy to avoid financial complications arising from contributions if you follow these simple tips.

Gifts—Unwrapped

  • You're in charge. The church must approve of a love gift and control how the money is spent for the gift to be considered a charitable contribution.
  • Different gifts have different rules. Love gifts are allowed in four specific circumstances. Each type of love gift has its own set of rules determined by the IRS.
  • Just say "No." Some gifts, such as land gifts, can be costly or burdensome to maintain. You can decline any gift that you can't use or that has financial risk.
  • Be prepared to issue a receipt. The donor may ask for a receipt for tax purposes. The IRS has specific rules about when a receipt is needed and what information should be included.

Endowments are Different

  • Endowments are different than gifts. Endowment funds are gifts which require all or a specified portion of the gift be maintained. Typically, the governing board has authority to spend investment proceeds and/or a portion of the original gift.
  • Be aware of restricted funds. Endowment donors can dictate a specific use of donated funds. If the restriction becomes unworkable or obsolete, the donor can be contacted to release the restriction.
  • Honor fund designations. As long as a church honors the donor's designation for the funds—or plans to do so in the foreseeable future—it typically is not obligated to return the contribution.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations."

Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

Posted:
May 14, 2008

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