There are families in our church who are trying to adopt. Can people who give money to specific families through our adoption funding ministry still receive a tax deduction on the money given?
Adoption funding is one of the biggest restricted giving issues. There’s a natural desire to help families who are adopting. That’s wonderful. But there’s a difference between giving a gift to a church or a charity to provide the adoption funds, and giving the money specifically for one family. When it’s given specifically for one family, this translates the gift into a personal gift, not a charitable gift.
This is happening in the crowdfunding arena as well. People are very well intended, and their hearts are obviously in the right place. But they’re raising money, adoption-by-adoption, family-by-family, instead of raising money for adoption in general and letting the organization decide who should receive the adoption funding. It’s kind of a combination of the high interest in helping people adopt children and some of the new funding techniques, as in crowdfunding, that are beginning to come together. So, churches are going to have to work to make certain everything is done legally and ethically and in good order.
All fundraising, to be considered fundraising, needs to be given for projects. When you start naming individuals, that is going to raise a concern about benevolence, adoption, or other issues. If you make a gift that is specified for one person for adoption or is specified for a person for a mission trip, those are generally going to be viewed as personal expenses. But if you only suggest the missionary or preference—so it’s a gift to the church but your preference would be that it would go for “Bill” for his church mission trip or an adoption, then that’s generally acceptable. But when the gift is restricted to a specific individual or family, it’s like me giving you a personal gift. It’s not taxable to you, but it’s not deductible to me.