When Two Churches Become One
When Two Churches Become One
The legal ins and outs of church mergers, acquisitions, and donations/dissolutions.

With the economy still going through rough patches, Congress repeatedly evaluating whether to limit the deductibility of charitable donations, and the rate of charitable contributions flat or slowly increasing, some churches find it hard to cover their operating expenses and keep their doors open. Many churches of various sizes and types are becoming increasingly interested in whether their church can—or should—merge with another church, acquire another church, or dissolve their church and donate the assets to another church (collectively referred to herein as "transactions").

These transactions have long been common in the business world, but interest in them has grown rapidly recently within the nonprofit sector. A few years ago, The Chronicle of Philanthropy reported "charity leaders are looking at mergers and acquisitions as a potential strategy to ride out the turbulent economy … [t]he troubled economy has put merging with or acquiring another organization front and center on the radar for the senior managers of many struggling nonprofits." The article indicated the rate of transactions among nonprofits was nearly identical to that of for-profit businesses.

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Posted: March 1, 2013
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