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Religious Schools Face Deadline for Annual Nondiscrimination Form

Federal requirement includes church-run preschool programs.

Richard R. Hammar, Attorney, CPA
Bio

Churches and other religious organizations that operate, supervise, or control a private school must file a Form 5578.

A Form 5578 is a certificate of non-discrimination.

The certificate is due by the 15th day of the fifth month following the end of the organization’s fiscal year. This is May 15th of the following year for organizations that operate on a calendar-year basis.

A “private school” is an educational organization that:
  • normally maintains a regular faculty and curriculum and
  • normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly conducted.

The term includes primary, secondary, preparatory, or high schools. It also includes colleges and universities, whether operated as a separate legal entity or an activity of a church.

Key point. The term “school” also includes preschools, and this is what makes the reporting requirement relevant for many churches, since many churches operate a preschool program. Private religious schools that are not affiliated with or controlled by a church also must file the form.

Form 5578 is easy to complete

A church official simply identifies the church and the school, and certifies that the school has “satisfied the applicable requirements of section 4.01 through 4.05 of Revenue Procedure 75-50.” These requirements are explained in the instructions to Form 5578, and relate to racially nondiscriminatory policies in the school’s charter, bylaws, catalogs, admissions, and programs. In some cases, schools are required to publicize their racially nondiscriminatory policies in the local media.

This is critical for church schools

Does your church operate a preschool? An elementary school? A secondary school? A college? If you answered “yes” to any of these questions, then you are required to submit Form 5578 to the IRS each year. Filing the certificate of racial nondiscrimination is one of most commonly ignored federal reporting requirements.

Churches that operate a private school (including a preschool), and independent schools, may obtain a Form 5578 by calling the IRS forms number (1-800-829-3676) or by downloading a copy from the IRS website (http://irs.gov).

Key point. Some independent religious schools that are not operated or controlled by a church or other religious organization are required to file Form 990 with the IRS each year. Form 990 is an annual information return. Churches and some other religious organizations are exempt from this filing requirement. Schools that are required to file Form 990 make their annual certification of racial nondiscrimination directly on Schedule E of Form 990, and not on Form 5578.
Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.
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Foregoing a Full Salary and Clergy Taxes

How clergy taxes apply when pastors decline part of their agreed salary.

Richard R. Hammar, Attorney, CPA
Bio

Last Reviewed: January 4, 2025

Q: Our church agreed to pay our pastor a salary of $60,000 for 2013. Because of financial pressures our church is experiencing, our pastor is only accepting half of the agreed-upon salary. Is he taxed on the full salary of $60,000 even though he has declined to accept it, or is he taxed only on the salary that he actually receives?

This question touches on important principles related to clergy taxes, specifically the constructive receipt doctrine. Let’s explore this concept and its implications in greater detail.

What is the constructive receipt doctrine?

The constructive receipt doctrine, as defined by Treasury Regulation 1.451-2(a), specifies:

Income although not actually reduced to a taxpayer’s possession is constructively received by him in the taxable year during which it is credited to his account, set apart for him, or otherwise made available so that he may draw upon it at any time, or so that he could have drawn upon it during the taxable year if notice of intention to withdraw had been given.

This means income is taxable even if it is not physically received, provided it is accessible or available to the taxpayer without restrictions.

What does case law say about refusing salary?

Courts have issued varying rulings regarding salary refusals and taxable income:
  • Some courts have held that employees must include refused salary as taxable income.
  • Others have ruled the opposite under specific circumstances.

The landmark case of Giannini v. Commissioner, 129 F.2d 638 (9th Cir. 1942), is a key example. In this case, a corporate president refused $1.5 million of his compensation, suggesting the company use the funds for a worthwhile purpose. The court concluded:

The taxpayer did not receive the money, and … did not direct its disposition. What he did was unqualifiedly refuse to accept any further compensation for his services with the suggestion that the money be used for some worthwhile purpose. … In these circumstances we cannot say as a matter of law that the money was beneficially received by the taxpayer and therefore subject to the income tax provisions.

However, the court distinguished this case from others where the taxpayer exerted control over the refused salary, such as directing its use. These distinctions are critical in determining taxability.

How does the IRS view salary refusals?

The IRS has cautioned that the treatment of refused salary “depends on the facts and circumstances of each case” (IRS Notice 2001-69). For instance:
  • If the employee refuses salary but leaves the amount available to the employer without specifying its use, it may still be considered taxable income.
  • If the employee unconditionally refuses the salary and relinquishes all control over it, it may not be taxable.

Consulting a tax professional is essential in these cases to ensure compliance with IRS rules.

FAQs: Clergy Taxes and Salary Refusals

1. Is a pastor taxed on a salary they refuse to accept?

It depends on whether the salary was constructively received. Taxability hinges on the facts and circumstances of the refusal.

2. What happens if the pastor directs the refused salary to a specific use?

If the pastor exerts control over the funds, the salary may be considered constructively received and taxable.

3. How can churches handle salary refusals to avoid tax issues?

Churches should document the refusal and consult a tax professional to ensure the arrangement aligns with IRS regulations.

4. Should pastors who refuse salary consult a tax adviser?

Yes. Professional advice ensures compliance with IRS rules and minimizes the risk of penalties.

In summary, clergy taxes related to salary refusals depend on the unique facts of each situation. Pastors and churches should seek professional advice to ensure compliance and avoid unintended tax consequences.
Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.
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Summer Camp Safety

Summer camp safety is everyone’s ideal. But risk management ensures it’s a reality.

The Editors
Bio

Few things encourage spiritual growth in kids like attending a Christian camp. Away from other distractions, kids have time to focus on their relationship with God. Unfortunately, camps also provide plenty of opportunities for kids to get hurt—miles from the nearest hospital. Good risk management helps prevent many injuries and lessens the severity of those that can’t be avoided.

Join Church Law & Tax today!

In order to make the right choice for your campers, consider this series of evaluations of the camp’s safety program. These tips are from camp directors and risk-management professionals, and they will help you determine whether you have found the best place for your group.

Screening Staff

The best-run camps have great people working for them. They have carefully selected the supervisors, counselors, and others who will be working with your group. Everyone should be screened, whether employee or volunteer. To ensure excellent screening procedures, find out whether all staff and volunteers have submitted a:
  • Written application
  • Multiple reference checks
  • Criminal background check

Staff Training

The best facilities train staff thoroughly, creating a risk-management culture in the process. Determine whether the facility holds training sessions before camp begins each year. Learning that returning staff simply take new people under their wings and “show them the ropes” could be a potential danger sign. Being sure of a formal training program is the only way to know that every staff member has received complete information on the camp’s safety procedures.

Some other areas to ask about regarding staff training include:
  • Camp policies: How do staffers respond to issues such as weapons, smoking, drug/alcohol use or possession, guests, and facilities use?
  • Behavior guidelines: How are staff members expected to interact with campers and each other?
  • Emergency procedures: How will staffers respond t o emergency situations, such as fires, lightning, and natural disasters?
  • Healthcare issues: What is the staff’s role in administering first aid, obtaining professional medical care, notifying parents, and documenting injuries?
  • Abuse prevention and reporting: What procedures must staff follow to prevent children from being abused emotionally, physically, or sexually? What are the reporting requirements that staff must follow if they suspect a camper is being abused (at camp or at home)?
  • High-risk activities: Are all counselors who are supervising high-risk activities, such as swimming, ropes courses, or rock climbing, required to have additional training and professional certification when necessary?

Camper Training

Making sure that campers will learn what they need to stay safe by having an orientation when they arrive on site demonstrates great safety awareness on the part of the camp. Find out whether campers will:
  • Go on a walking tour.
  • Learn emergency procedures (for example, understanding where to go in case of lightning, a thunderstorm, or a tornado).
  • Learn camp rules. Campers should be thoroughly aware of camp policies, such as which activities are off limits unless they’re supervised.
  • Be able to easily identify staffers (perhaps with a nametag, hat, or t-shirt), so they can quickly find someone to help if they witness an accident or feel threatened.

Water Safety

Water activities are a fun way to cool off for campers, but they can also be dangerous. A non-swimmer can drown in just four minutes, and peers may encourage kids to exceed their swimming ability. To be sure your camp will keep participants safe in the water, find out whether the camp will:
  • Have a certified lifeguard on duty: Will there be experienced lifeguards who are trained in rescue techniques and are familiar with the hazards of their body of water? Are there individuals who are not lifeguards providing additional supervision? here policies in place to protect swimmers? For example, are there rules that only those who can swim 150 yards and tread water for two minutes would be allowed to enter water over their heads?
  • Use wristbands: Does the camp use a system of nonremovable colored wristbands allowing lifeguards to note quickly if a poor swimmer is entering dangerous territory? Are there other systems in place for quick assessments?
  • Allow rough, boisterous horseplay: Are chicken fights or other horseplay allowed in water? What about other activities that might cause a distressed swimmer to go unnoticed?
  • Limit the use of inflatable objects: Inflatable objects give people a false sense of security. A poor swimmer who falls off his inner tube in deep water is a drowning candidate. What policies are in place regarding their use?

High Standards Ensure Excellence

As an extra measure of safety, discover whether or not the camp you’re interested in is a member of a recognized organization. There are a host of regional, state, denominational, and national organizations dedicated to the pursuit of excellence in camping and/or camp ministries. The Christian Camp and Conference Association (CCCA) and the American Camp Association (ACA) are two of the largest. The ACA’s accreditation program is recognized nationwide for excellence. If a camp is a member of either one, it signifies their identification with higher standards. These camps will have access to resources and materials that are unavailable elsewhere, as well as the ability to exchange knowledge with other camp professionals who share the camping vision.

This article was adapted from Volume 18, Issue 2 of The Deacon’s Bench. Used by permission of Brotherhood Mutual Insurance Company.

The editorial team of Church Law & Tax is made up of Matthew Branaugh, attorney-at-law, and Rick Spruill, digital content manager.
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Accident Prevention in Church Maintenance and Construction Projects

Discover essential accident prevention strategies for church maintenance and construction projects to protect volunteers, staff, and community members.

James F. Cobble Jr., Editor Emeritus
Bio
Richard R. Hammar, Attorney, CPA
Bio

Last Reviewed: February 11, 2025

Churches and schools engage in various maintenance and construction projects, from renovations to community service initiatives. However, without proper safety measures, these activities can lead to serious accidents. Accident prevention should be a priority, especially when volunteers with varying skill levels use power tools and other equipment.

Custodial Training for Safe Equipment Use

Churches and schools often employ custodians responsible for maintenance. Training in the safe use of tools, chemicals, and equipment should be part of their orientation and ongoing education to minimize risks.

Assigning a Safety Supervisor

To reduce the risk of accidents, appoint a safety supervisor for all maintenance and construction projects. The supervisor’s role includes monitoring the worksite for hazards and providing necessary training to workers.

Sample Work Agreement

All workers should acknowledge the authority of the safety supervisor. A sign-in agreement can help establish this:

To promote a safe work environment, First Church has designated (name of safety supervisor) as the safety supervisor on this work project. The safety supervisor has full authority to dictate safety measures, and workers must comply with all safety precautions. I agree to abide by all safety rules for this project.

Key Areas for Accident Prevention

Worksite Safety
  • Clear work areas of materials that could cause trips or falls.
  • Ensure proper lighting and ventilation.
  • Flag pipes or beams at work level to prevent collisions.

Tool Safety
  • Inspect tools before use and mark defective ones as “Do Not Use.”
  • Provide training on the correct use of tools.
  • Use tools only for their intended purpose.

Safe Work Practices
  • Workers should avoid loose clothing and jewelry that can get caught in machinery.
  • Maintain proper posture to prevent falls.
  • Provide clear instructions for lifting heavy objects to reduce back injuries.

Personal Protective Equipment (PPE)
  • Identify tasks that require safety glasses, gloves, or masks.
  • Ensure custodians and maintenance staff wear slip-resistant shoes.

OSHA Guidelines for Hand and Power Tools

The Occupational Safety and Health Administration (OSHA) recommends the following rules for safe tool use:
  • Keep tools in good working condition.
  • Use the correct tool for the job.
  • Inspect tools before use and do not use damaged tools.
  • Follow manufacturer instructions.
  • Use proper protective equipment.

Electrical and Ladder Safety

Preventing Electrical Hazards
  • Ensure power tools are properly grounded.
  • Use three-wire cords and grounded receptacles.
  • Do not use electrical tools in wet areas unless they are rated for such use.

Safe Ladder Practices
  • Use ladders only on stable surfaces.
  • Maintain three points of contact when climbing.
  • Do not exceed the ladder’s weight limit.

First Aid and Emergency Preparedness

Churches should maintain a first-aid kit at all work sites and train designated individuals in CPR. In case of injury:
  • Call 911 immediately.
  • Do not move individuals with suspected head or spinal injuries.
  • Apply direct pressure to wounds to control bleeding.

FAQs on Accident Prevention in Churches

What are the most common church maintenance hazards?

Falls from ladders, improper tool use, and electrical hazards are among the most common risks.

How can churches improve accident prevention?

Assigning a safety supervisor, providing training, and following OSHA guidelines significantly reduce risks.

What personal protective equipment (PPE) should churches require?

Gloves, safety glasses, and slip-resistant shoes are essential for most maintenance and construction projects.

How often should churches inspect tools and equipment?

Tools should be inspected before each use, and defective tools should be removed from service immediately.

By implementing these accident prevention strategies, churches can create a safer environment for volunteers, staff, and community members.
James F. Cobble, Jr., received his master of divinity degree from McCormick Theological Seminary, and also has doctoral degrees from both Princeton Theological Seminary and the University of Illinois.
Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.
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Understanding Love Gifts: Tax Rules and Best Practices for Churches

A guide to understanding church love gifts, their tax implications, and best practices for proper administration.

Frank Sommerville, Attorney, CPA
Bio

Christ commands us to love one another. Since the church follows his commands, the church wants to express that love, usually by blessing someone with a love gift. Frequently, the church will receive a love offering for someone in need or in appreciation of a member.

The Internal Revenue Service does not mind love gifts as long as the church follows the tax rules.

Donor Rules

In all instances, the church must approve the love gift and take control of the contributions. For example, if Ms. Myway wants to bless Pastor Loving by giving him a love gift through the church, then the church should not accept that gift. Ms. Myway is controlling how the money is spent. On the other hand, if the church decides to bless Pastor Loving with a love gift, it may accept the donation from Ms. Myway. If the church controls how the money is spent, then the donation qualifies for charitable contribution credit. On the other hand, if Ms. Myway is using the church as a conduit to give a personal gift to Pastor Loving, then she does not have a tax-deductible contribution and the church has risked its tax-exempt status.

Four Types of Love Gifts

The church may give love gifts in four circumstances: (1) to meet a benevolent need, (2) to compensate a visiting minister, (3) to compensate an employee, or (4) to bless a ministry. Each type of gift has rules that are specific to that type.

Benevolent Love Gifts

Benevolent love gifts have two characteristics: (1) the recipient has a need, and (2) the recipient cannot presently meet that need. The IRS has avoided defining “need,” preferring to allow the courts to define the term. Since no court has defined it so far, churches should use the common, everyday meaning of “need.” Generally, “need” is a synonym for “necessity.” As a result, the church should only meet needs that represent a necessity for the recipient. Most commentators believe a need should relate to food, shelter, clothing, transportation or health care items. The church must document these two elements in writing. The documentation is intuitive: the church must confirm the need and the lack of resources.

For example, if a family cannot pay the rent, the church may call the landlord and confirm the rent has not been paid. The person making the call writes a memo to be filed, documenting the conversation. The church then secures a written statement from someone who is knowledgeable about the family’s finances that the family does not have the money to pay the rent. Many churches find a written application helpful in documenting benevolent requests.

Assuming the church properly documents the factors described above, no tax reporting is required unless the recipient is an employee. Benevolent gifts must be limited to the amount of the need. Sometimes, the love offering will exceed the amount of the need. To solve this problem, the church should notify donors through the benevolence committee (or other governing body) that any excess amounts received above the designated amount will be transferred to the church’s general benevolence fund.

Visiting Minister Love Gifts

All love gifts to visiting ministers and missionaries are taxable and should be reported to the IRS on Form in Box 1 on Form 1099-NEC, unless the church designates a portion of the payments as housing allowance. The church should not report the amount designated as housing allowance to the IRS as taxable income.

Love Gifts for Employees

All love gifts are taxable to the employee, even if it meets the requirements to be a benevolent gift described above. However, this is not the end of the analysis. The church has responsibility to assure that an employee does not receive more than a reasonable amount of compensation through a non-benevolent love gift. For example, if a church took a love gift on pastor appreciation Sunday and a donor placed a check for $1 million dollars in the gift offering. The church should not give the entire offering to the pastor because it may cause his compensation to exceed a reasonable amount. This could cause the church to lose its tax-exempt status. It could also cause the pastor to owe an intermediation sanction up to 200 percent of the amount his compensation exceeded a reasonable amount.

To solve this problem, the church should notify donors that the personnel committee (or other governing body) has set a maximum amount that will be given to the pastor from the love offering. The church should also tell them if any amounts are received above the designated amount, the excess amounts will be transferred to the church’s general fund.

Another Ministry

Frequently, the church will want to assist another ministry. This ministry may be the employer of a guest speaker or missionary. At other times, the ministry will perform a charitable or religious service in the community. Benevolent gifts would still need to be limited to the amount of the need.

The church should first determine whether the IRS recognizes the ministry as a tax-exempt organization. Before the church receives a love offering for a ministry, it must have written confirmation of its tax-exempt status. Typically, the ministry would provide the church with a copy of their IRS determination letter. After confirming the ministry’s tax-exempt status, the church may pay the ministry a love gift without any restrictions.

If the ministry is not recognized as tax exempt or is unable to present written proof of its tax- exempt status, then the church may not give it a love gift. Instead, it may only pay for services rendered. Like employees, the amount is limited to a reasonable amount for the services rendered to the church.
Frank Sommerville is both a CPA and attorney, and a longtime Editorial Advisor for Church Law & Tax.
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Screening Minors for Church Volunteer Roles: Best Practices

Churches often rely on minors to assist in youth programs. Learn effective screening methods, including reference checks and community practices, to ensure safety and reduce liability.

Richard R. Hammar, Attorney, CPA
Bio

Last Reviewed: January 28, 2025

Most churches use minors to assist in various children’s or youth programs, and so some screening should be done. You obviously cannot perform criminal records checks on persons under 18 years of age, and even for persons who are 18 or 19, a criminal records check will have limited significance. You really need to approach the screening of adolescents in a different manner. Let me suggest two options.

First, obtain two or three reference letters from persons who have seen the applicant interact with other minors (this would include church workers, coaches, school teachers, scout leaders, etc.). You want an opinion from such persons about the applicant’s suitability for working with minors. Obviously, if you receive two or three references from such persons, you have very compelling evidence that you exercised reasonable care in the selection process, and in the final analysis, this is the standard by which you will be judged if your church is sued for the molestation of a child by an adolescent worker. The bottom line is that you cannot conduct criminal records checks on such persons, but you must take other steps to demonstrate reasonable care.

Second, contact local youth-serving charities such as the public school district, Boy/ Girl Scouts, YMCA, Boys/Girls Clubs, etc. and ask them what screening they use for adolescent workers. Be sure to make a record of each contact. By basing your screening policy on “community practice” you will be reducing your risk of liability based on negligent screening.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.
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Keep Safe: Creating a Safe Church Environment For Kids

How one church creates a safe environment for kids.

Brad Lewis

Keeping children physically and emotionally safe in church has become more important than ever. Jolynn Patterson, early childhood and curriculum director at Woodmen Valley Chapel in Colorado Springs, Colorado, shares how parents and churches can work together to ensure the safety of children.
As a big church, how do you keep children safe while they are away from their parents?

We’ve taken a proactive and preventive approach. In the early childhood area, we have only one entrance and one exit to the building, with a supervisor or greeter at each door to make sure everyone coming and going has a reason to be there. We do a background check on each volunteer every two years, and we check personal references.

Each child has a two-part nametag. The child wears half and the parent takes the other half. The child can only be picked up by the parent holding the other part of that nametag. The nametags have numbers, and we can display a child’s number during the service if he or she has an emergency.

We also have a family-care card system. First-time visitors fill this out for each child. It includes names of parents, family information, insurance information for emergency situations, allergy information, etc.

Finally, we have panic buttons and two-way radios in each area of the building that we can use in all kinds of situations. If an intruder entered the facility, or if we needed to call an ambulance, we could hit the panic button, which alerts others and cuts down on the time it takes to get help.
How do you communicate all this to parents?

We have flyers on almost every topic. Parents also receive a welcome packet that goes over all the procedures. And each teacher receives policies and procedures (parents can get these as well) on everything from “How do you hand out graham crackers?” to “How do you handle a blood injury?
What should parents look for to make sure their children are safe in church?

I’d ask three main questions:
  • How will the church keep track of my child, and how do they monitor who comes and goes from that classroom?
  • How will the teachers find me if my child needs me?
  • How will the teachers ensure that I’m the only one who can pick up my child?

When parents know they’re in a controlled environment where someone has thought through the processes, they can enjoy their church experience with less worry.
What advice would you give to parents who attend a church that hasn’t implemented these kinds of procedures?

Take an active role. Collect all the information you can about what the church is currently doing—they may have done more planning than you realize. Figure out what hasn’t been addressed. Find out who’s responsible for establishing safety guidelines. Then get together with these leaders and other parents to think through those issues and come up with procedures to solve problems before they have a chance to happen. For research, visit other churches and check out state guidelines for childcare facilities even if your church doesn’t have to follow them.

Mandatory Reporting for Churches: ‘I Can’t Promise Not to Tell’

Youth workers have ethical and legal duties they must fulfill.

Laura J. Brown

Last Reviewed: July 28, 2025

Teens facing serious issues rarely seek out formal counseling. Instead, they may:
  • Drop hints during a group discussion
  • Speak quietly after youth group
  • Share personal struggles—but only after extracting a promise that you won’t tell anyone

That’s a risky—and sometimes illegal—promise to make.

Know Your State’s Mandatory Reporting Laws

All states have child-abuse reporting laws. Some states require all adults to report. Among remaining states, many require professionals—like doctors, teachers, and police—to report suspected abuse of minors. This means the duty often extends to:
  • Pastors
  • Youth workers
  • Childcare providers

“When in doubt, report,” attorney Richard R. Hammar, co-founder and senior editor, Church Law & Tax

The Consequences of Failing to Report

Imagine a youth worker learns a teen is being molested by a relative—but says nothing. The abuse continues. Later, if authorities learn the church had prior knowledge and failed to act, they could:
  • Charge the youth worker for failure to report
  • Hold the church liable for ongoing abuse

Bottom line: Know your state’s laws. Train your youth leaders on:
  • Confidentiality
  • Abuse disclosures
  • Counseling boundaries
  • State-mandated reporting requirements

Note: Ignorance of the law is not a defense.

Confidentiality: A Double-Edged Sword

Confidentiality builds trust—but can backfire.
  • Teens won’t open up if they think their secrets won’t be kept
  • But you can face legal trouble for keeping secrets that should be reported

Real-Life Cases from Brotherhood Mutual:
  • Case 1: A youth leader shared a girl’s secret with a family friend. The family threatened to sue for breach of confidentiality.
  • Case 2: A church leader failed to report sexual abuse disclosed in counseling. He was held legally liable.

“Even clergy confidentiality laws usually include exceptions for abuse,”
—Ronald Troyer, Brotherhood Mutual

How to Walk the Tightrope

Youth workers must be clear and honest with teens.

Every ministry should:
  • Train all lay counselors on abuse-reporting laws
  • Review Church Law & Tax’s 50-state survey of child-abuse reporting laws, which is regularly updated

Counseling: Know Where the Line Is

If youth workers give advice that crosses into clinical counseling, they risk being sued for unlicensed practice.

“You cannot step across the line from being a spiritual counselor to a clinical counselor.”
—John Sandy, Brotherhood Mutual

What Not to Do

Avoid giving clinical advice unless you’re licensed. Be cautious:
  • Don’t recommend treatments or actions from books or non-biblical sources
  • Don’t act as a therapist—especially with complex mental health issues

Understand Mental Health Licensing Laws

These vary by state. Generally:
  • Pastors employed by a church can provide pastoral care without a license
  • Lay counselors may face stricter regulations—especially if they:
    • Charge fees
    • Advertise services publicly
    • Use protected titles like “counselor” or “therapist”

Safer Terms to Use:
  • Helping relationship
  • Mentoring or discipling relationship
  • Coaching
  • Pastoral care

When Pastoral Counseling Isn’t Enough

Some signs a teen may need clinical help:
  • Sudden aggression or outbursts
  • Drop in grades
  • Talk of running away
  • Nightmares or insomnia
  • Significant weight or appearance changes

Referral is key. Even seasoned youth workers face situations beyond their training.

“Referral isn’t a sign of weakness—it’s a sign of strength.”
—Van Pelt & Hancock

Building a Referral Network

Create connections with trusted professionals:
  • Support groups and Christian counseling centers
  • Local crisis hotlines
  • Licensed therapists and psychologists
  • Teen mental health hospitals
  • Crisis pregnancy centers
  • Substance abuse counselors

Prepare before a crisis hits. Know who to call before you need them.

Establishing Counseling Guidelines

Ministries must protect both youth and adult leaders. Consider the following policies:

Create an agreement that outlines:
  • Confidentiality terms (especially for minors)
  • Session limits
  • Right to terminate sessions at any time
  • Clarification that only biblical (not clinical) counseling is provided

Parental/guardian consent is essential for minors.

2. Sexual Misconduct Prevention

To reduce risks:
  • Never counsel someone of the opposite sex alone
  • Have a parent or second adult present when counseling a minor
  • Set limits on:
    • Session duration (e.g., 45–60 minutes)
    • Number of sessions (e.g., maximum of six)
  • Use offices with windows and visibility
  • Avoid physical contact that could be misinterpreted

3. Ethical Standards

Youth workers should:
  • Never interfere with medical treatment or prescriptions
  • Immediately report:
    • Suspected abuse
    • Suicidal statements
    • Threats of violence

Legal documents should clearly outline exceptions to confidentiality.

4. Confidential Record-Keeping

Encourage youth workers to take simple notes:
  • Date of each session
  • What was shared
  • Advice given

Keep records:
  • Secure and confidential
  • Password-protected if digital
  • Encrypted if on portable devices
  • As church property, not personal files

Discuss record-retention policies with your attorney.

Responding with Care—and Caution

Youth ministries are full of caring adults who want to help. But well-meaning actions can carry legal risks. Take time to:
  • Understand state laws
  • Train your team
  • Create a strong policy framework
  • Build a trusted referral network

With wise preparation, your church can offer both compassionate and legally sound care to teens in crisis.
Laura J. Brown is a writer and communications specialist with Brotherhood Mutual Insurance Company. For free resources from one of the nation’s leading insurers of churches and related ministries, visit BrotherhoodMutual.com.

We’ve used a combination of AI and human review to make this content easier to read and understand.
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Best Practices for Employment Risk Management in Ministries

Discover how ministries can reduce employment risks with strategies like detailed record-keeping, legal counsel, updated policies, and insurance coverage.

Kathleen Turpin
Bio

Last Reviewed: January 28, 2025

The saying “an ounce of prevention is worth a pound of cure” is particularly appropriate in the employment setting. The cost of defending an employment lawsuit, regardless of the legitimacy of the claim, will generally cost at least $25,000, and may run into hundreds of thousands of dollars.

While you can never totally insulate your organization against a lawsuit, you can take preventive measures to limit the exposure.

Seek Legal Counsel

Consult legal counsel to assist in general operations such as drafting policies, handbooks, or preparing employment contracts. Since employment law is constantly changing, consulting local legal counsel in these matters may prevent or limit the liability in various situations. For example, always consult legal counsel before terminating an employee. Your attorney will be able to review your employment records, advise you of any potential liability before an employment claim develops, and provide information as to how the termination should be accomplished.

Maintain Detailed and Confidential Personnel Records

By law, all organizations are required to maintain certain employment records, such as employee wages and hours worked. It’s imperative that you keep separate confidential personnel records on each employee and that the information is given only to those individuals who have a need to know.

Generally, individuals who have a “need to know” are a small group of people, such as supervisors or members of a governing board. Additionally, the information provided even to these individuals should be limited to the facts. Be aware that state laws differ as to whether employees have a right to review their personnel file, as well as what information may be reviewed.

Most states limit what information employees or former employees may view and when copies of the file must be made available to the employee. Additionally, besides the basic identifying information, personnel records should include:
  • Job descriptions
  • Performance reviews
  • Promotions
  • Attendance records
  • Any discipline or job-related problems

Apply Policies Consistently

When courts review a discrimination complaint, they often initially consider two items. First, was there a policy in place addressing the issue, and secondly, was the policy consistently applied and followed?

For example, if a person alleging racial discrimination was terminated for excessive absence, the court will first inquire as to whether a discrimination policy was in place and how it was administered. The court will then consider how previous employees with histories of excessive absence were treated.

If your organization has an employee handbook that includes progressive discipline or termination provisions, it’s important to follow the procedures and processes consistently.

Update Policies and Procedures Regularly

Having policies and procedures in place will usually provide some level of protection. Your organization should have policies against sexual harassment and discriminatory practices as well as prohibitions against other immoral behavior. Employment handbooks can be beneficial in communicating personnel policies, employee benefits, and work standards.

These handbooks also can be useful in limiting various exposures to liability. On the other hand, an employment handbook that isn’t regularly updated or isn’t consistently followed can be extremely damaging.

Without appropriate language and limitations, courts have construed handbooks as evidence of employment contracts. For this reason, you should regularly review your personnel policies and consult legal counsel before implementing a handbook.

Purchase Employment Practices Liability Coverage

Employment claims haven’t traditionally been covered under general liability policies. In fact, most general liability and personal injury policies specifically exclude claims arising out of the employment relationship. However, with employment-related litigation increasing against religious organizations, insurance coverage for such claims is becoming essential. One of the greatest expenses associated with employment lawsuits is defense costs. Most religious institutions cannot afford thousands of dollars to defend a lawsuit, whether frivolous or valid. In an effort to respond to this need, Brotherhood Mutual offers a comprehensive employment practices liability coverage. This coverage specifically addresses certain claims of discrimination, sexual harassment, employee defamation, and other employment issues. Contact your agent to discuss adding this coverage to your policy.

Prevention Tips to Reduce Your Risk

Here are some helpful hints on how to address some of the more common issues affecting religious ministries:

Record Keeping
  • Keep separate personnel records on each employee.
  • Keep detailed information regarding an employee’s performance.
  • Maintain accurate attendance records regarding absences and tardiness.
  • Make sure that personnel records don’t include identifying information such as employees’ race, color, sex, national origin, age, disability, or marital status.
  • Place personnel records in a secure, locked area.
  • Implement security procedures to protect employee privacy.
  • Provide confidential information regarding employees only to those individuals who have a “need to know.”
  • Provide employees with copies of documents that affect their status.
  • Record all changes in employee status, such as promotions, leaves of absence, rates of pay.
  • Store all records containing medical information in a location separate from other personnel records.
  • Make sure that employee records accurately reflect the employee’s job performance.

Defamation/References
  • Consult with an attorney before releasing information that you believe could lead to a defamation claim.
  • Designate one department or person to handle all requests for recommendations. Have a policy addressing what information will be provided and the procedures for providing information in recommendation requests.
  • Don’t discuss employee evaluations with other employees, except on a “need to know” basis.
  • Don’t share information regarding an employee’s medical condition or other private information with anyone without the consent of the employee.
  • Make sure personnel files are stored securely.
  • Maintain separate files containing medical information.
  • If a referral is requested regarding a former employee, obtain a written consent from the employee releasing you from liability. When providing a referral, provide information based on facts, not opinions.
  • Provide the necessary information only to those who have a “need to know” regarding a disciplinary action or termination.
  • Give only the facts if a statement is necessary to explain a termination. Don’t offer opinions or expound on any unnecessary details.

Sexual Harassment

• Implement a sexual harassment policy that includes the following:
  1. A description of the types of conduct that constitute harassment.
  2. A forceful statement that such conduct is prohibited by the organization’s rules as well as state and federal law.
  3. A statement that employees have the right to complain about sexual harassment without fear of retaliation.
  4. An explanation of the procedure for a prompt and thorough investigation.
  5. A statement that appropriate and immediate discipline measures will be taken against the offender if it’s determined that harassment took place.
  6. • Conduct a thorough investigation including the following steps:
  8. Interview the complaining employee, alleged harasser, and any witnesses.
  9. Report your determination to the complaining employee and alleged harasser.
  10. Administer discipline in person.
  11. Avoid inappropriate or inaccurate comments in an evaluation, for example, “He’s a slacker,” “She’s never on time.”
  12. Conduct annual employee performance reviews and accurately document any performance problems.
  13. Convey information regarding the termination only to those who have a “need to know.”
  14. Document results of performance reviews.
  15. Don’t discharge an employee without the benefit of a thorough investigation.
  16. Gather all necessary information and documentation before conducting a discipline interview. Include documents illustrating the effects of misconduct, company records regarding work rules, procedures and/or schedules, and the employee’s personnel files and prior disciplinary notices.
  17. Identify any specific rules or policies that have been violated and record the policy violation in the employee’s personnel file.
  18. Seek the advice of counsel as soon as the possibility of termination arises.
  19. Call Your Attorney. The first step after learning of a possible claim is to contact legal counsel in your area. Local counsel can advise you on how to limit your exposure and respond to the individual.
  20. Contact Your Insurance Agent. You should always advise your agent any time you become aware of a potential claim. The agent can then forward the information to your insurance company so that a coverage and liability determination can be made.
  21. Review the Records. Review your records to ensure that they have been properly documented. Documents should be organized chronologically. This will also provide an opportunity to review the file for missing information.
  22. Document the Situation. Prepare a timeline of events leading up to the accusation. Include names of supervisors, witnesses, and co-workers who may have information regarding the actions and accusations.

This article is excerpted from “Working Together: A Guide to Employment Practices for Ministries.” Copyright 2008. Brotherhood Mutual Insurance Company. Used with permission.
Image: AdobeStock/Rufat

Church Liability: Avoiding Negligent Supervision

Churches can be liable for injuries sustained during church activities on the basis of negligent supervision.

Richard R. Hammar, Attorney, CPA
Bio

Scenario

A church takes 25 adolescents on an overnight trip to another city. The participants all sleep in a church basement. A 14-year-old girl is sexually assaulted by a 17-year-old boy. Can the church be liable for this incident? If so, on what basis?

Churches can use reasonable care in selecting workers, but still be liable for injuries sustained during church activities on the basis of negligent supervision. The term negligence means carelessness or a failure to exercise reasonable care. Negligent supervision, then, refers to a failure to exercise reasonable care in the supervision of church workers and church activities. Churches have been sued on the basis of negligent supervision in a variety of contexts, but the most common examples are the molestation of children, sexual misconduct between clergy and adult counselees, and injuries to adults and minors on church property or during church-sponsored trips.

Sexual misconduct by clergy with adult counselees

Several courts have concluded that they are not barred by the first amendment from finding churches liable on the basis of negligent supervision for the sexual misconduct of pastors.

Here are some procedures that some churches have implemented to reduce this risk:
  • Require a third person to be present during all opposite sex counseling sessions.
  • Require a third person to be present during opposite sex counseling sessions occurring on church premises during non-office hours, or off of church premises.
  • Limit the number of opposite sex counseling sessions, and the duration of each session.
  • Require counseling to occur in rooms that are visible to other staff members, either because of a window or an open door.
  • Conduct counseling by telephone.
  • Install a video camera (with no audio feed) in the room where counseling will occur so counseling sessions can be monitored by another staff member.
  • Refer persons desiring counseling to local professional counselors.
  • Require that women provide counseling services to women.
  • Some courts have concluded that the first amendment’s “non-establishment of religion” and “free exercise of religion” clauses prevent the civil courts from resolving negligent supervision claims involving clergy misconduct. To illustrate, the United States Supreme Court observed in a landmark case more than a century ago: “It would therefore also be inappropriate and unconstitutional for this court to determine after the fact that the ecclesiastical authorities negligently supervised or retained the defendant Bishop. Any award of damages would have a chilling effect leading indirectly to state control over the future conduct of affairs of a religious denomination, a result violative of the text and history of the establishment clause.”

Some courts have noted the inherent difficulty of supervising ministers in the performance of their duties, and in particular their counseling activities. As one court observed:

By the nature of the position, a clergyperson has considerable freedom in religious and administrative leadership in a church. The clergy also require privacy and confidentiality in order to protect the privacy of parishioners. There was no evidence that the supervision provided by [the church] differed from the supervision a reasonable church would provide. Nor was there any evidence of further reasonable supervision that could have prevented [the pastor] from abusing [the victim]. There was not enough evidence from which a reasonable jury could conclude that [the church] negligently supervised [the pastor].

Negligent supervision of church workers—other cases

Churches can be liable on the basis of negligent supervision for injuries that occur during church events and activities whether on or off of church property. Common examples include deaths and injuries occurring during swimming activities, boating, hiking, camping, “lock ins,” and missions trips. In all of such cases, a church may be legally responsible for the death or injury if it was negligent in supervising the event.

Reduce the risks

Churches can reduce the risk of liability based on negligent supervision for injuries not involving sexual misconduct by adopting risk management policies and procedures. Here is a list of risk management strategies that some churches have adopted:

Use an adequate number of adults to supervise all church activities, especially those involving minors. Also, be sure that the adult supervisors are adequately trained to respond to emergencies.

Check with the Red Cross, YMCA, Boy Scouts, and similar organizations to obtain guidelines on the number of adults to use, the training of adult workers (based on the type of activity involved), and other safety procedures. Reliance on such standards makes it much less likely that a church will be guilty of negligent supervision. Be sure that you document your research.

If your church sends minors on a trip that will involve swimming (or the possibility of swimming), be sure you go only to locations that have certified lifeguards on duty.

Avoid high-risk activities

Some activities, such as rope-repelling, explosives, and the use of firearms, are so hazardous that a church may be deemed “strictly liable” if an accident occurs, no matter how much care was exercised in supervising the event.

Negligent supervision is one of the most significant legal risks faced by churches today. It is essential for church leaders to be familiar with this basis of liability so that preventive measures can be evaluated and implemented. Here are some important points to remember:

Negligence is conduct that creates an unreasonable risk of foreseeable harm to the person or property of another and that results in the foreseeable harm. The important point to recognize is that negligence need not be intentional. For example, negligence may include conduct that is simply careless, heedless, or inadvertent.

Churches can use reasonable care in selecting workers, but still be liable for injuries sustained during church activities on the basis of negligent supervision.

A church may be liable on the basis of negligent supervision for a worker’s molestation of a minor if the church was negligent in supervising the worker. Liability based on negligent supervision may be imposed upon a church for the acts of employees and volunteers.

A church may be liable on the basis of negligent supervision for a worker’s molestation of an adult if the church was negligent in the supervision of the worker.

Negligent supervision claims are not limited to cases involving sexual misconduct. They can arise anytime that a church’s failure to exercise reasonable care in the supervision of an employee or volunteer leads to a foreseeable injury.

Churches can reduce the risk of liability based on negligent supervision by adopting appropriate risk management policies and procedures.
Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.
Image: AdobeStock/elnariz

How to Choose the Right Fundraising Consultant for Your Church

Learn how to select the best fundraising consultant for your church and ensure a successful and spiritually uplifting capital campaign.

Kevin A. Miller
Bio

Last Reviewed: May 9, 2025

Selecting the right fundraising consultant can make or break a church’s capital campaign. While a good consultant brings expertise, organization, and increased giving, a poor choice can lead to unexpected expenses and hard feelings.

Here’s what churches need to consider before signing a contract.

A Costly Mistake: Learning the Hard Way

A Pennsylvania pastor hired a fundraising consultant, hoping to strengthen the church’s financial future. The previous year had been tough:
  • Local unemployment soared to 26 percent;
  • The church ran a $28,000 deficit after 19 years of meeting budget; and,
  • Courageous tithing from members helped reduce the shortfall to $6,000.

The consultant promised success, claiming he could find “fresh money” beyond existing commitments. Instead, he:
  • Encouraged double-pledging, reusing existing commitments to inflate results;
  • Ordered and billed unauthorized materials to the church; and,
  • Misrepresented his fees, leading to unexpected costs.

The church dismissed him and hired another firm. The new consultant was transparent, professional, and effective. The church’s financial future now looks bright.

Lesson learned: A thorough vetting process is essential when hiring a fundraising consultant.

Why Hiring the Right Consultant Matters

A competent consultant can help churches:
  • Raise more money than they could on their own;
  • Organize a structured campaign that motivates members;
  • Ensure accountability and timely progress;
  • Avoid common fundraising pitfalls.

However, not all consultants deliver on their promises. While unethical fundraisers are rare, competence levels vary widely. Some use aggressive or manipulative tactics that alienate church members.

As L.H. Coleman of Cargill Associates puts it:

“The problem is not integrity. The integrity level among consultants is high. It’s the competence level that varies greatly.”

Key takeaway: Churches need to evaluate consultants carefully to ensure they’re choosing a skilled, ethical, and effective professional.

Do We Need a Fundraising Consultant?

Before hiring a consultant, churches should ask:

1️⃣ Do we need a capital funds campaign?
  • If long-term debt exceeds three times annual income, a campaign may be necessary.
  • If debt service (principal + interest) exceeds 30 percent of annual income, it’s time to consider fundraising.

2️⃣ Can we raise the money ourselves?
  • If the church needs less than its annual income and has a pastor with fundraising experience, it may manage without a consultant.
  • If the goal exceeds annual income, hiring a professional is advisable.

Why a Consultant Helps

A consultant brings:
  • Experience: Knowledge of what works and what doesn’t;
  • Accountability: Keeps the campaign structured and on schedule;
  • Authority: An outside expert’s presence often motivates members;
  • Efficiency: Allows church leaders to focus on ministry instead of logistics.

Pastor Vic Pentz explains:

“Sometimes you think, ‘Hey, we could do these things ourselves.’ But you probably wouldn’t.”

What Can Consultants Deliver?

Consultants typically help churches raise:

💰 Two to four times their annual income in three-year pledges;
💰 80 percent to 90 percent of pledged funds usually materialize

While some churches see super-success stories (e.g., raising 9x their budget), such cases are rare.

Key factors affecting results:
  • The consultant’s approach;
  • The level of member engagement;
  • The church’s follow-through after the campaign.

Churches should verify consultants’ track records to ensure they don’t just secure pledges—but that those pledges are actually fulfilled.

What Will a Consultant Cost?

There’s no one-size-fits-all pricing. Costs vary based on:
  • 📍 Location (travel expenses can increase fees)
  • 💒 Size of the church (more work = higher cost)
  • 🏗️ Purpose of funds (raising money for new buildings is easier than for debt retirement)

Typical fees range from $20,000 to $30,000, though they vary widely. Some firms charge a flat percentage (e.g., 0.5 percent) of funds raised, but this can lead to high-pressure tactics.

Payment schedules:
  • Usually 10 percent upfront, with the rest spread over 3–6 months
  • Some allow payments to begin after funds start coming in

Key takeaway: Churches should ensure clear fee agreements before hiring a consultant.

What Will the Consultant Do?

A fundraising campaign typically lasts three to eight months and includes:

1️⃣ Initial Consultation
  • Church provides details about its finances and goals;
  • Consultant meets with leadership and may address the congregation.

2️⃣ Evaluation Process
  • Assesses giving potential, member attitudes, and key donors;
  • Identifies and recruits leadership team.
  • 3️⃣ Campaign Phases
  • Home Visits: Church members (or outside fundraisers) visit homes to share the vision;
  • Prayer Emphasis: 24-hour vigils, prayer chains, or focused devotionals;
  • Informational Period: Sermons, newsletters, and Bible studies on stewardship;
  • All-Church Gathering: A banquet or service to rally support;
  • Commitment Canvassing: Members make financial pledges;
  • Follow-Up: Regular updates, thank-you letters, and ongoing donor engagement.

Churches should verify how a consultant approaches donor conversations to avoid pressure tactics that could alienate members.

What’s Expected of the Pastor?
  • Visible and verbal support is crucial for success;
  • Personal commitment: Some consultants suggest pastors lead by example in their giving;
  • Active engagement: Pastors play a key role in encouraging participation.

Pastors should clarify expectations before hiring a consultant. Some consultants pressure pastors into large personal donations, while others take a more private approach.

How to Find the Right Consultant
  • Look for a Christian consultant who aligns with your church’s values;
  • Check experience and success rates (e.g., % of pledges fulfilled);
  • Ask for references—then ask those references for more references;
  • Compare denominational fundraisers vs. private firms;
  • Verify communication clarity (fees, strategies, follow-up plans).

As one pastor advises:

“Every consultant will give you their best references. To get a true picture, ask those references for other churches the consultant has worked with.”

Will the Campaign Hurt the Church?

Churches often worry that:
  • Fundraising will alienate members;
  • It will drain the general budget.

However, most pastors report that capital campaigns strengthen churches, leading to:
  • Greater unity;
  • Increased membership;
  • Stronger stewardship habits.

As one pastor put it:

“Stewardship and evangelism go hand in hand.”

Final Thoughts

Hiring the right fundraising consultant requires careful vetting, but the rewards can be significant. A well-run campaign raises not just money, but faith—leaving the church stronger and better equipped for the future.

Before signing a contract, churches should ensure they’ve asked the right questions and found a consultant who is competent, ethical, and aligned with their values.

We’ve used a combination of AI and human review to make this content easier to read and understand.

Image: Marc Volk | Getty

5 Steps for Building a Volunteer Safety and Security Team

A church administrator creates a sustainable, long-term solution.

Robert Wild

Twenty years ago I started my career as a church business administrator and facilities director in Phoenix.

Back then, the need for incorporating a comprehensive safety and security team did not exist.

Times have changed, and the idea that churches are off-limits to violence has disappeared. Today, churches have even become targets of violence.

From the start, I needed a process to help me build a safety and security team.

The process had to be relaxed but effective, and easy to implement and manage. It needed defined steps to build a volunteer force that would sustain and replicate itself. It had to be organic in nature. Most importantly, it had to provide fulfillment to the individuals giving their time and energy to make it a success.

Over time, the process evolved into a five-step progression:
  • Identify
  • Recruit
  • Train
  • Deploy
  • Manage

You can use this model to build any volunteer security and safety organization. Let me briefly explain how each of these steps functions.

Identify

It all begins with identifying who you want involved in your ministry.

Make a list of the attributes you want in the individuals you recruit for the safety and security team. Some general characteristics might include:
  • Strong people skills
  • Mental and emotional stability
  • Keen ability to observe people and situations
  • Good judgment and not impulsive

Recruit with care

In building a safety and security team, I also believe it’s important to look for people with professional law enforcement backgrounds, retired or active. Your first step here is to identify potential leaders that have a lifetime of experience and leadership qualities. Retired professionals will have time and ample experience, not to mention connections with local law enforcement agencies, which can help you identify other potential recruits for your team and help you build a solid safety and security ministry.

When considering “civilians” for this ministry, I encourage you to recruit with care. These days when concealed carry permits are easily obtained, inexperienced gun carriers generally do not have the proper skills to react in stressful situations. Therefore, many of them may not be the best choices for a safety and security team.

State and local governments often regulate private security, including church security teams, so work with them as you build your team. Only members of your safety and security team should be allowed to carry weapons at church. Permitting others outside your team to carry a concealed weapon will create a number of legal and liability issues that can become detrimental to the church.

Regardless of whom you select for your team, carefully think through whom you will and won’t allow to carry a weapon. This also is one of the reasons why I recommend that you staff your team with law enforcement professionals who attend your church. Your background screening process, which I will outline later, also may help you to identify the best team members to carry weapons.

For the safety side of your team, look for emergency medical technicians, registered nurses, and doctors. Equip them with medical supplies or “go-bags,” as such supplies are referred to in this field. Ask them to sit with their families in the same location in the church where they would normally sit, even when they are on duty with your team.

Recruit

Now that you identified potential participants for your safety and security team, the next step is “the ask.” Here, tact is everything. You are approaching potential volunteers because you believe they are right for this volunteer position.

Never ask on the fly. Never approach a prospective team member as if to grab him or her just to have someone to fill a position. Never beg. Approach any prospective volunteers like you would if you were inviting a trusted colleague to dinner.

Make sufficient time to meet face-to-face to lay out exactly what you are recruiting for. Talk about everything in this volunteer position—the ups and the downs. Don’t oversell; don’t promise; don’t glorify.

Above all, don’t use the God trump card (God told me to ask you. God told me you should do this.) God can indeed reveal His intentions about someone to you and if that is the case, there should be no need for you to do any name-dropping. Most likely, God has prepared your prospect’s heart in advance of your meeting.

And finally, make sure your prospective volunteer knows that an application process involving a criminal background check is required. Law enforcement professions will especially understand the value of screenings. Whether you’re recruiting a professional or a civilian volunteer, you should relay the benefits of screenings and the protection they provide for the church, volunteers, and ministry participants.

Your screening process should include the following:
  • An application with questions that identify potential traits or tendencies indicating that the applicant might be a bad fit for the security team.
  • Reference checks with at least two prior ministries or employers.
  • A thorough criminal history check.
  • A doctor’s statement indicating the applicant’s physical and mental fitness to serve on the team.

Train

Nothing damages volunteers’ enthusiasm more than throwing them into the job mix without proper training and orientation. In a potentially dangerous ministry like safety and security, policy and procedural guidelines play a big part in the training process.

Generally, safety and security training involves both individual and group activities. You will need to explain your church’s policy and guidelines for dealing with different types of security needs—domestic violence vs. teenage pranks, for example.

Define the use of force in detail—intricate detail—identifying the level of force needed for various situations. This is a “red flag” issue. Discuss weapons and which members of the team are permitted to carry a concealed weapon. Do not undervalue the importance of this discussion and the necessity for your team volunteers to understand your church’s policy regarding weapons and their use.

Safety and security training should be ongoing, scheduled, and completed at regular intervals. Attendance should be mandatory—no exceptions.

In this article, I have only scratched the surface of what has to be in place before a recruit completes training and is prepared to proceed to the deployment stage. Policies, procedures, and who is responsible for what in the safety and security ministry should be the foundation of all your training activities.

Deploy

This step deploys your new volunteer to his or her area of responsibility. On this first deployment, it’s important to check in at regular intervals and see how your new volunteer is doing.

Over time, you also should rotate all your volunteers into each of the positions your safety and security ministry oversees. Every volunteer should have an opportunity to become familiar with all areas of the ministry, to the point that they can be called upon to function in any area if necessary. Flexibility is an important element of an effective safety and security ministry.

Manage

In my mind, this is the most important step in the process. It’s in managing the ministry that you will not only be able to help your volunteers take on safety and security as more than an important job in the church, but also help them see it as a personal ministry.

If you are doing your job well, you also will come to know them in a way that puts you in the position of a spiritual mentor. This is your opportunity to build a deeper relationship beyond the weekend experience. Let them know you care about them and their family and that you are there to help and support them in their time of need.

As ministry managers, we often make the mistake of letting our volunteers’ excitement about their ministry get the best of them by their desire to volunteer to serve every weekend for all services and extra events during the week. Before long, that excitement turns to burnout, fatigue, discouragement, and more importantly, spiritual exhaustion. It’s good for people to be excited about serving the church, but often that translates in going full throttle and giving loads of time serving at the expense of family and good health.

To prevent this situation, your leadership will be critical. Be proactive in establishing a serving schedule that intentionally gives volunteers time off with their family. I prefer an every-other-weekend schedule and certainly one that schedules them for no more than three weekends in a month. Allow no exceptions to the schedule you develop. We all need time away for spiritual refreshment and time to relax. The result is likely to be long-term service and volunteers who are refreshed and ready to serve.

Finally, how does a safety and security ministry become self-sustaining?

Revisiting ‘Identify’

Let’s look again at Identify—the first step in the process. As you deploy your new recruits, you will see those that aspire to be leaders. It will be natural for them. Identify that quality and exploit it.

Through those who become the natural leaders on your team, you will be able to replicate this process and reach a point of having volunteers leading volunteers. The only way you can ever grow a volunteer ministry to meet the needs of your church is to give away the leadership. Don’t be clingy. And don’t worry about who gets the credit for building a successful safety and security ministry. Set the path to success and let others pick up on your lead.
Robert Wild, senior director of strategic alliances for Brotherhood Mutual Insurance Company, has more than 20 years of experience in church administration. He’s the former director of finance and administration for Christ’s Church of the Valley in Peoria, Arizona.
Image: AdobeStock/gamerxtc

Fringe Benefits for Church Staff: Tax-Free and Taxable Options

Churches can offer tax-free fringe benefits, but compliance with IRS rules is essential. Here’s what to know.

Dan Busby
Bio

Last Reviewed: January 30, 2025

Churches often provide various fringe benefits to employees, some of which are tax-free or tax-deferred. However, churches must carefully structure these benefits to comply with IRS regulations and maximize tax advantages for employees.

Tax-Free and Tax-Deferred Fringe Benefits for Church Staff

Health Insurance

Medical Expense Reimbursement
  • Churches can reimburse coinsurance, deductibles, and out-of-pocket expenses through an FSA.
  • FSAs are capped at $2,500 per year (adjusted for inflation).
  • Funds must be used within the designated period to remain tax-free.
  • Read about healthcare reimbursement rules.

Retirement Plans
  • Churches often provide 403(b) tax-sheltered annuity plans.
  • Pension contributions for pastors are tax-deferred.
  • Distributions can be designated as a tax-free housing allowance.

Life Insurance
  • Up to $50,000 in group-term life insurance is tax-free.
  • Coverage above $50,000 is taxable but at favorable rates.

Disability Insurance
  • Employer-paid premiums are tax-free, but benefits are taxable.
  • If the employee pays premiums, disability benefits are tax-free.

Long-Term Care Insurance
  • Church-paid or reimbursed long-term care premiums are tax-free.

Dependent Care
  • Childcare or dependent care for children under age 13 may be tax-free.
  • Dependent care plans must comply with nondiscrimination rules.

Church-Owned Vehicles
  • Personal use of a church vehicle is taxable.
  • The fair market value of personal use must be reported unless reimbursed.

Loans to Employees
  • Many states prohibit churches from making loans to employees.
  • Loans under $10,000 may have exceptions; consult an attorney.

Tuition and Fee Discounts
  • Church-operated schools may offer tax-free tuition discounts to employees and their dependents.
  • Church employees receiving tuition benefits may need to report them as taxable income.

Special Rules for Fringe Benefits
  • Many tax-free benefits must be available to all employees, not just senior staff.
  • Discriminatory plans may result in tax liabilities for highly compensated employees.

Fringe Benefits That May Violate IRS Rules

Improper Use of Benefit Plans
  • A church sets up a medical reimbursement plan using salary reductions but refunds unused amounts at year-end.
  • A church reimburses medical expenses without a formal ACA-compliant plan.
  • A church pays whole life insurance for a senior pastor, with the pastor’s spouse as the beneficiary.
  • A church reimburses dependent care expenses through an accountable plan, improperly mixing benefits.

Key Takeaway: Properly structured fringe benefits offer significant financial advantages to churches and their employees. However, improperly designed plans can create IRS compliance risks.

FAQs About Fringe Benefits for Church Staff

1. What fringe benefits can a church provide tax-free?

Health insurance, retirement contributions, group-term life insurance (up to $50,000), disability insurance, and dependent care benefits are commonly provided tax-free.

2. Can a church provide tax-free tuition benefits?

Tuition discounts for employees and their dependents may be tax-free if they meet IRS guidelines.

3. Are church-provided vehicles a taxable benefit?

Yes, unless the employee reimburses personal use, the fair market value of personal use must be reported as taxable income.

4. What happens if a church offers discriminatory benefits?

Highly compensated employees may lose tax-exempt treatment for certain benefits, leading to additional tax liabilities.
Image: AdobeStock/ enterlinedesign

How to Handle Challenging Church Volunteers with Grace and Wisdom

Discover how to handle difficult volunteer situations in your church, from identifying causes of failure to offering support and terminating gracefully. Foster healing and guide volunteers toward roles that amplify their gifts.

Timothy E. Schenck

Roberta was driving me nuts. Put in charge of an important fundraising event when no one else volunteered, she quickly spiraled out of control. It started to become “her” event rather than a communal church fundraiser. She ignored repeated requests to give the church board a budget, tried to secure a glamorous yet pricey off-site location, and allowed the price per person to become too steep for a church our size. At this rate we were going to lose money in our attempt to raise money for the organ fund!

With Roberta running amuck, something had to be done. But here was our dilemma. We couldn’t lay off a volunteer by eliminating the position; someone had to plan the event. We couldn’t fire the well-meaning volunteer and have her simply go away, as paid workers in business settings do. Firing Roberta would not be easy; it would be painful, with fallout. While we must occasionally remove lay leaders from their ministries for the health of both parishioner and parish, that would be our last resort. I hoped we could reason with Roberta.

I called the fundraising committee chairman. We agreed to meet with our wayward worker to bring things back to the more modest original concept. When we sat down with Roberta, it became clear she either didn’t understand or care about our vision. “Why do you keep asking me for a budget?” she asked. “It’s more important that everything looks good.”

“Roberta,” I replied, “don’t forget the purpose of the event is to raise money to repair the organ.”

“Well, no one’s going to come if we don’t have shrimp.” She was defensive, unresponsive, and unenthusiastic about our gentle suggestions to amend her ideas.

So I fired her.

1. Identify the cause for failure.

No one volunteers for leadership in the church without good intentions, and no pastor commissions someone for ministry thinking they may one day need to be removed. Volunteers are the church’s greatest resource. But just because someone raises a hand to take on a project doesn’t mean she’s the right person for the task. As church leaders, we’re usually so thrilled that someone has volunteered to do something that we don’t consider whether or not they are truly called to the ministry. Sometimes it’s only after the fact that we realize an individual isn’t right for a job.

Then it’s too late. We have rushed to anoint someone without any communal reflection or prayer.

When confronted with situations where termination seems to be required, a key pastoral question is this: Are there unstated reasons for the person’s failure to thrive in a position? It may be an issue of competence, negative attitude, burnout, differing visions, or a personality conflict with the pastor or committee members. If these subterranean issues are clarified, the presenting problems—such as absenteeism—are likely to correct themselves.

2. Offer options to the failing volunteer.

In some cases, the person would succeed in the position with additional training. Church leaders must train, equip, and support their lay leaders for the work of ministry. Successful volunteers are empowered for their service, not only by giving them a “long lead” to accomplish their work, but by giving them the tools and skills required. This may mean teaching volunteers how to run committee meetings, generate enthusiasm, or delegate responsibilities. If this isn’t the pastor’s particular gift, it is well worth the investment to bring in an outside consultant to work with both the pastor and the lay leaders on techniques of effective church leadership.

3. Terminate with grace (and face-to-face).

When determining whether a volunteer should be released, it’s important to be aware of scapegoating. If a ministry or event is spiraling toward disaster, it’s easy to point fingers and lay blame. It may well be the volunteer who is hurting the effort. But situations are always more complicated than they appear.

If, after thoroughly examining the situation, you still feel that a change is necessary, then it’s time to act. This is no time to send off a brief e-mail. It is the pastor’s duty to confront the person in a straight-forward manner, out of love, and with the whole congregation’s best intentions at heart.

And remember, you’re still the person’s pastor. She may well be hurt, angry, confused, or embarrassed. It is vital to keep in face-to-face contact with this person during the transition out of a particular ministry role. This is an opportunity to reach out to this person, remind her that she is a valued member of the church community, and re-focus her energies toward an area of ministry better suited to her gifts.

4. Create space for recovery, but not departure.

There may indeed be a period of “stepping back” from the business of ministry in order to reevaluate and heal. Give the person space, time, and a chance to just come to church to worship. But keep communicating throughout this process. This is especially crucial if the individual fails to show up to church on the Sunday following your conversation.

In our cast, after a brief withdrawal, Roberta returned to worship and is slowly getting involved in other activities. After giving her some time to work through her feelings of hurt, anger, and embarrassment, I personally asked her to take on a small project at the church. It was one that fit her gifts, was visible, and would lead to an easy victory. The project involved helping to frame and hang a parishioner’s artwork at the church.

She agreed to take it on and everyone was thrilled with the result. I was able to publicly thank her and the accolades helped heal the wound of the fundraising fiasco.

Roberta has a wonderful set of gifts and abilities that simply aren’t geared for certain projects. My prayer is that she will be led to jobs that amplify her gifts for ministry rather than expose her weaknesses. And I know that we as a church community must play a role in leading her towards ministries that better reflect her particular calling.

Adapted from, “Leader’s Insight: Firing Volunteers,” which first appeared in our sister publication, Leadership Journal.

Image: AdobeStock/Eva

Reducing the Risk of Vandalism

Identify and eliminate opportunities for vandalism at your church campus.

James F. Cobble Jr., Editor Emeritus
Bio

Last Reviewed: February 11, 2025

Each year, churches experience significant losses due to vandalism. Vandals often act impulsively. Lighting and surveillance systems are two key ways to reduce vandalism.

Lighting It Up

Lighting is one of the best and least expensive forms of prevention:
  • Lights must have sufficient illumination.
  • Install protective lighting around locations that someone might use to enter the facilities, such as doors, windows, or skylights. The parking lot and street entrances into the parking lot also should have good illumination.
  • Use protective covers so someone will not be able to break the bulb easily.
  • Consult with the local power company to determine the proper level of illumination for security purposes.

Sound the Alarm

Increasingly, churches use surveillance systems to reduce vandalism and to promote security:
  • Monitor church parking lots and property during church services.
  • Use an alarm system as a complement to basic security measures. Be sure to shop around—there’s a wide range of prices and monitoring fees.
  • Alarm systems make use of a phone line, so find out how the security company protects the phone line.
  • Most systems have a built-in delay in order to allow staff members to disarm them when they enter the building. The delay should be as short as possible.
  • Place stickers on windows and doors, and place signs at strategic locations on the property warning of your alarm system. Deterrence is the best policy.

Additional Measures

Other steps churches can take:
  • Maximize visibility between offices and the outside of the church, especially at parking lots and entrances, to create natural surveillance.
  • Look for signs of illegal entry, such as slit window screens or broken windows.
  • Control access to playgrounds.
  • Keep the property clear of rubbish.
  • Report every act of vandalism to the police, no matter how minor.
  • Quickly respond to any act of vandalism by making repairs or removing graffiti. Take immediate steps to prevent future acts.
  • Organize a neighborhood watch program.
  • Use padlocks with high-quality hardened steel.
  • Use landscape designs and plants to make a break-in more difficult. Thorny or prickly plants, such as a holly under a first-floor window, can discourage burglars. Plants, however, should not obstruct the view through windows or doors.
  • Use landscaping, fences, and screens to control access to church property.
  • Do not provide easy access to the roof.
  • Use a metal bar or a piece of wood in the track of sliding doors.
  • Try to make parking spaces visible from the street, or from the main offices of the church building. Be sure vehicles are locked and don’t contain valuables.
  • All church keys should be numbered, tracked, and stored in a key safe. Limit distribution to the fewest number of people possible.

Discuss
  • What are some ways we can improve lighting around the church and its property?
  • Is our alarm system adequate? If we don’t have one, why should we consider one?
  • What are some landscaping and design tactics we can immediately implement?
James F. Cobble, Jr., received his master of divinity degree from McCormick Theological Seminary, and also has doctoral degrees from both Princeton Theological Seminary and the University of Illinois.
Image: Peter Dazeley | Getty

Protecting Church Data: Strategies for Security and Disaster Recovery

Essential tips for church data protection, including security measures, backup strategies, and recovery plans for peace of mind.

Nick B. Nicholaou
Bio

Last Reviewed: January 26, 2025

When First Baptist (not the church’s real name) hired a network engineering firm to help them with their computer system, they never dreamed they were inviting in thieves. But when employees of the firm saw the scope of information saved in the church’s database, they copied it and rented the list to businesses that wanted to reach people in their community, segmenting it by various demographics—including contributions!

Data is one of the most valuable assets a church has, but trying to figure out what it’s worth so we can adequately protect it is challenging. Protecting data isn’t difficult, but the task must be approached as deliberately as the fire and security protection we apply to our church buildings.

The first step is to recognize that your church has different kinds of data, and classifying data helps set a value to strategically protect it. While some data is mission-critical, other data is merely convenient. The difference is often found in answering the question, “What would happen to our church and our ministries if this data was made public or was destroyed?”

Data that might be considered mission critical includes:

Databases. Databases contain names and contact information, and sometimes include contribution, attendance, baptism, and other data that help us serve our congregations. Unfortunately, most churches have more than one database. In addition to lost efficiencies and synergies, multiple databases add complexity to the task of data protection. Church databases can include true databases, spreadsheets, document files, contact lists, and, of course, the Rolodex™.

Sermons and Lesson Preparation. Sermons and lessons and the research behind them.

Communications. Letters and e-mail between the organization and others—both internal and external.

Graphic Files. Photos, videos, bulletins, programs, promotional posters, and audio files.

Governmental Documents. Church meeting minutes, agendas, meeting notices, etc.

Custom Programming. Templates or any other items that have been customized to help communicate and serve with uniqueness.

Data Threats

Threats to data security can be classified as either internal or external.

Internal. Good employees sometimes become disgruntled employees. Hardware sometimes crashes. Vendors sometimes develop sticky fingers. We are constantly being attacked with malicious software (called “malware”) in the form of spyware and Trojan horses.

External. Burglars, external catastrophes like hurricanes and earthquakes, and those who try to hack into systems that are connected to the Internet. As we monitor our clients’ network security, we see almost constant evidence of Internet programs (called “bots”) trying to exploit operating system vulnerabilities. Their goal is to grab data or computer resources to serve the interests of others.

Prioritizing Data Protection

Some data, if lost, would cause no real damage. But other data losses could really hurt. Consider, for instance, if your membership database was no longer available, or if members’ private information was made public. This is a critical situation for churches and ministries that process online or ACH contributions and keep donors’ financial account information in the database. In the wrong hands, that information could allow others access to donors’ accounts!

Therefore, losing the database would have the greatest impact on your church and its membership, so protecting the database should be the highest priority. This protection can take multiple forms.
  • Reduce the number of databases as much as possible. The ideal number is one database. This ensures that a high-priority focus on protecting it will be as effective as possible. It also has the benefits of saving staff time (updating a record once takes less time than updating it multiple times in every database) and increasing staff synergies. The downside is that some ministry areas may have to change the way they maintain their data to accomplish this goal.
  • Perform multiple daily backups, easily done with many of today’s database engines. Some choose to have their database backed up every two hours, for example, so that if there were a problem, less work would have to be re-entered.
  • Send a copy of database backups to an off-site server. If there were a regional catastrophe (like a hurricane) in which staff evacuated in many directions, the database could be securely accessed via the Internet.

Jason Powell, information technology director at Granger Community Church in Granger, Indiana, says, “Our database is the center of what is done on our network. If it were lost, the cost to reconstruct it would be huge; worth it, but huge.” Spending a little to protect it in advance is good stewardship.

The second priority is to safeguard data files that are foundational to the ministry. These include communications with governmental authorities as well as the church’s own governmental records (agendas, minutes, meeting notices, etc). Records of this type may become critical in re-establishing a church or ministry following a catastrophe.

The third priority is to preserve letters and e-mail communications that cannot be easily re-created.

Few things tangibly say who you are like familiar graphics, and this type of data is the fourth priority. Whether it includes bulletins and programs, promotional formats, or photo, video, or audio files, these are often irreplaceable pieces of church history that help many feel a little more comfortable in a crisis. They communicate who you are, and should be protected. Because of their size, however, these types of files are often eliminated from daily backup routines.

The fifth protection priority is custom software programming, usually in the form of templates and database modifications.

Layers of Protection

Data is usually best protected by applying layers of protection. We recommend the following:
  • Server rooms should be locked and accessible only to those with a legitimate need for access.
  • Passwords should meet or exceed minimal policy requirements. This means passwords should avoid words, names, dates, etc.—things that are easily guessed. Passwords should never be shared with other staff members. David Brown, information technology director at Capital Christian Center in Sacramento, California, says, “When someone lets us know they shared their password for any reason, we immediately change it for them.” Like many other ministries, Capital Christian Center does not allow users to change their own passwords. This helps ensure that passwords are high quality.
  • Some organizations are moving toward the use of biometrics to eliminate passwords altogether. Dell, for instance, will often include fingerprint scanners at no additional cost. These easy-to-use devices increase the protection of networks and sensitive data.
  • A fully configured, updated, and tested Internet firewall will keep unwanted intruders (bots and hackers) out of your system.
  • A fully configured and updated SPAM filter will minimize the impact of malware contained in e-mail.
  • Use of a secure, in-house, instant message system rather than a public system will keep hackers away from security “back doors” that are easy to exploit.
  • Back up the entire system daily (Monday through Friday night) on tape, saving backup tapes for a minimum of three weeks.

Regional Disasters

The following additional steps will help protect against data loss if you should experience a local or regional catastrophe:
  • One night each week (preferably after the busiest day of the week), take that night’s backup tape off-site. Use two tapes, rotating tapes each week, so that you’ll always have the previous backup available.
  • Copy high-priority data to an off-site location on a daily basis via secure Internet connection. Though many vendors offer this service, only a few also have the ability to restore a database backup and securely host it over the Internet as an interim solution following a catastrophe. This is especially important for databases.

Your data, though difficult to objectively value, is one of your most significant assets. Because your ministry is heavily dependent on data, implementing some fairly simple policies and procedures will go a long way towards protecting your ministry.
Image: AdobeStock/Africa Studio

Homeless Ministry: Safe and Compassionate Responses for Churches

Discover essential strategies for creating a safe and compassionate homeless ministry in your church while protecting staff and resources.

James F. Cobble Jr., Editor Emeritus
Bio

Last Reviewed: February 11, 2025

Churches play a critical role in serving their communities, and a homeless ministry is a vital extension of that mission. However, assisting transients and others seeking help requires structured policies that ensure both compassion and safety for church staff and volunteers. Without clear guidelines, churches may face security concerns, resource mismanagement, and legal risks.

Developing a Safe Response Plan

Helping the poor is central to the church’s mission, but effective assistance requires preparation. Churches should create policies and provide training to staff members on how to respond to individuals seeking help. Since many church secretaries and administrators work alone, these situations require advance planning.

Key Steps for a Safe and Effective Homeless Ministry
  • Define roles for staff members, including responsibilities for interviews, referrals, voucher distribution, and follow-up.
  • Establish procedures to enhance personal safety while interacting with individuals in need.
  • Train staff and volunteers through role-playing exercises that simulate real-life scenarios.

Security Considerations for Church Staff

Ensuring safety for church employees is just as important as offering assistance. Churches should implement security measures to protect staff, particularly when working alone.
  • Keep doors locked when a staff member is alone in the building. Use an electronic door lock system to control entry.
  • Install an intercom system between the church office and other key areas for easy communication.
  • Maintain a well-lit parking area and designate safe parking spots near the building entrance.
  • Install a panic button in the church office to alert other staff members in case of emergency.

Recognizing and Responding to Con Artists

While most individuals seeking help are in genuine need, some attempt to exploit church resources through deception. Recognizing common tactics can help protect limited church resources while still assisting those in need.
  • Avoid giving out cash; use a voucher system instead.
  • Verify the legitimacy of requests by asking for identification and references.
  • Be cautious of urgency-driven manipulation. Genuine requests may be urgent, but they will also provide verifiable details.
  • Be wary of individuals with no local ties or references but numerous excuses.

Best Practices for Providing Assistance

Churches can offer meaningful support while maintaining structure and security. Consider implementing the following:
  • Maintain a food pantry or partner with local organizations for food assistance.
  • Offer a community resource brochure listing shelters, food banks, and assistance programs.
  • Develop a centralized referral system with local churches, police, and social services.

Some churches offer temporary work to those in need. However, hiring transients without understanding legal responsibilities can create liability issues. Churches should consult with an attorney regarding:
  • Workers’ compensation insurance and liability coverage.
  • Tax responsibilities, including Social Security and withholding.
  • Background checks and employment eligibility verification.

FAQs on Homeless Ministry

How can a church safely assist the homeless?

Churches should establish structured policies, use vouchers instead of cash, and train staff to handle requests safely.

What security measures should churches implement?

Keeping doors locked, installing intercoms, using a panic button, and maintaining good lighting can enhance security.

Should churches give money to transients?

Instead of cash, churches should provide food, vouchers, or referrals to local assistance programs to prevent misuse.

How can churches verify legitimate needs?

Asking for identification, references, and contacting local shelters can help confirm genuine need.

By implementing these policies, churches can build a homeless ministry that is both compassionate and secure, ensuring that resources are directed to those who need them most.
James F. Cobble, Jr., received his master of divinity degree from McCormick Theological Seminary, and also has doctoral degrees from both Princeton Theological Seminary and the University of Illinois.
Image: AdobeStock/ Pcess609

Staying Above Reproach: Seven Rules To Live By

7 rules to help volunteer leaders protect themselves and the kids they serve.

Frank Sommerville, Attorney, CPA
Bio

Teens are among the most unpredictable individuals on the planet. One moment, they’re independent with almost adult-like qualities, but at the next can be childlike and dependent upon adults. Providing the appropriate amount of guidance is a common concern for volunteer youth leader. But there are risks to working with students, too. These seven rules will help provide “defensive” guidance to help you avoid situations that may compromise your ministry and the well being of those you serve.

1. The “never alone” rule. Leaders should take care to always meet with students in the presence of a third party. When a youth worker is alone with a teen, he is placing his future in the teen’s hands, since most authorities will give the benefit of the doubt to the teen, not the adult leader. Avoid this situation by always having a third party present when meeting with a teen. In a one-on-one mentoring relationship, consider meeting in an open, public place.

An easy place to overlook this rule is in the car, but workers should never be alone in with a teen in a car. Even if a student needs a ride, be cautious and responsible and make sure you are not alone. Remember: with only two witnesses present, the authorities tend to believe the teen, not the adult.

2. The “opposite sex” rule. This may seem obvious, but it is important to state: adult leaders should avoid developing close emotional relationships with teens of the opposite sex. What a leader may view as innocent conversation, a teen may see as flirting. Take precautions by asking other leaders for feedback on your interactions with students. If others question your motives or communication, change your style. This is especially necessary with teens that are vulnerable and need affirmation from the opposite sex.

Students’ emotions are basically a rollercoaster, and students are apt to develop crushes on members of the opposite sex whom they respect. If a teen develops an emotional bond with a worker, she may become angry when that worker rejects her attentions. Sometimes this anger can turn into false accusations, including criminal accusations.

Adult leaders should also exercise extreme caution in dealing with teens of the same sex. If a teen is confused about his sexual identity, he may attempt to develop a close relationship with a worker of the same sex. Again, this relationship is fraught with hazards. While the adult leader may counsel the teen regarding sexuality, it is critical to avoid building unhealthy emotional bonds.

3. The “more time” rule. Related to the first two rules, it is important to monitor “off duty” time spent with students. If the amount of time that you spend with a student becomes inordinate, take precautions to avoid awkward situations that could lead to false accusations. If a student frequently seeks out the company of a leader, it might be a sign that an unhealthy relationship is developing. The adult leader should keep track of her time together and discuss the situation with the supervisors and parents of the teen.

A corollary to this rule is this: if an adult leader is meeting consistently with a student to discuss life issues, those meetings should not go on for more than eight weeks. After eight weeks, the chances that a student will become unhealthily dependent on the leader increase dramatically. If the teen needs further assistance, the worker should refer the student to a professional counselor.

4. The “no confidentiality” rule. Youth leaders should never promise confidentiality to a student. Under most state child abuse laws, youth ministry workers are required to report any circumstance where a child has been or is in danger of being harmed emotionally, sexually, or physically. If an authority figure, such as a parent or law enforcement officer, requests information about a teen, the youth leader must fully disclose his or her knowledge. Failure to respond appropriately is not in the best interest of the student and may result in criminal charges against the worker.

For example, if a teen shares with a youth worker that she has been sexually abused, the worker must report this activity to the student’s parents and other authorities, and possibly to the state’s child protective services.

5. The “transparency” rule. Youth leaders need a system of accountability where they can be absolutely transparent about their behavior. Some churches require weekly or monthly statements from all workers stating that they haven’t behaved inappropriately toward their teens. Examples of inappropriate behavior include sending or receiving text messages containing prohibited language or meetings that violate the church’s policies. At the very least, workers should meet regularly with an accountability partner, another trusted believer who will ask direct questions.

6. The “no porn” rule. Youth leaders need to be aware of the reality of pornography in students’ lives. Because pornography dehumanizes individuals, teenagers who seek it out tend to separate sexual activity from relationships, making them much more likely to sexually harass others. Apart from the damage done to the teens themselves, adult leaders are at risk to be sued for inadequate supervision if one teen accuses another of sexual harassment in a church setting.

If a leader finds out that a teen is looking at porn (a picture on a cell phone, for example) the leader should take steps to address the situation. In most cases, this will require informing the parents and referring the teen to counseling. Child pornography is particularly serious matter, and if a worker becomes aware child pornography in the hands of a teen, the church’s attorney should be contacted immediately.

7. The “no fear” rule. The center of judgment in the human brain doesn’t fully develop until about age 25. This explains why teens sometimes lack healthy decision-making skills. In fact, often, they think they are invincible, 40-feet tall, and bulletproof.

Youth leaders must watch for risky activities and behavior, both to protect students and to keep themselves free from accusations of negligent supervision. As soon as a dangerous behavior comes up, leaders need to confront the student. When teens are in the care and custody of the church, there must be adequate adult supervision at all times. It is far better to cancel an activity than to risk harm, injury, or accusations.
Frank Sommerville is both a CPA and attorney, and a longtime Editorial Advisor for Church Law & Tax.

When Ministry Becomes Business: Understanding the Commerciality Doctrine

Key insights on how the commerciality doctrine impacts churches’ revenue-generating activities and tax-exempt status.

John R. Throop
Bio

Last Reviewed: January 21, 2025

Churches and religious organizations often engage in revenue-generating activities for two main reasons. Some activities begin as ministries designed to serve the community, incidentally generating nonessential cash flow. Others, however, rely on cash flow to ensure their success. Navigating these distinctions is critical when understanding the commerciality doctrine and how it applies to tax-exempt organizations.

The IRS has intensified its focus on the business operations of tax-exempt organizations to determine whether these activities align with the organization’s mission or function more like standalone businesses subject to taxation. The commerciality doctrine plays a pivotal role in this determination, influencing how churches can manage their revenue-generating operations while retaining their tax-exempt status.

What Is the Commerciality Doctrine?

The IRS permits nonrelated business income, but income—distinct from donations—is taxable if it arises from activities not “substantially related” to the organization’s exempt purpose. According to IRS regulations, “substantially related” means the trade or business must “contribute importantly to the accomplishment of the exempt purpose of an organization.”

To assess whether activities are taxable, the IRS applies these three standards:
  • The activity is not substantially related to the organization’s exempt purpose or function.
  • The activity qualifies as a trade or business.
  • The activity is regularly carried on.

Additionally, income exceeding $1,000 in a fiscal year requires filing Form 990-T. For detailed instructions on filing, visit the IRS instructions for Form 990-T.

Examples of Revenue-Generating Activities

Churches frequently face scenarios where the commerciality doctrine may apply. Here are some examples:

1. Bookstore Ministry

A church opens a small bookstore inside its facility to provide members with study guides and resources. The bookstore operates primarily during church activities and sells items at a profit. Because this activity supports the church’s educational mission, the income is not taxable.

2. Bookstore Business

If the bookstore grows to include a wide array of products, establishes regular hours, and moves to a location accessible to the public, it may no longer be considered part of the church’s mission. In such cases, the income is likely taxable.

3. Newsletter with Ads

A church publishes a newsletter as an evangelistic tool and sells advertising to cover costs. If ad sales generate a profit, that income could be taxable, particularly if it competes with for-profit businesses for the same advertising dollars.

4. Parking Lot Leasing

A downtown church leases its unused parking spaces to nearby businesses during the week. Since leasing space is unrelated to the church’s mission, the income would typically be taxable under the commerciality doctrine.

Steps to Help Avoid an IRS Audit

Church leaders can take proactive steps to minimize the risk of IRS audits and ensure compliance:

1. Clarify Your Mission

A clear mission statement helps determine whether an activity aligns with the church’s purpose. Use it as a guide for decisions regarding revenue-generating activities.

2. Separate Ministry from Business

When a ministry begins to resemble a business, consider incorporating it separately. This is particularly important if the activity accounts for 50 to 80 percent of the church’s income or poses significant liability risks.

3. Use Property Wisely

Be cautious with rental income, particularly when using property for non-ministry purposes. Ensure any plans align with the church’s long-term goals and minimize delays for projects involving donated land.

4. Retain a Skilled Attorney

Consult an attorney experienced in church operations. They can help structure activities to meet exempt purposes and avoid unnecessary tax liabilities. As attorney Chip Watkins advises, focusing on discipleship rather than profit should remain the priority.

FAQs: Commerciality Doctrine for Churches

1. What is the commerciality doctrine?

The commerciality doctrine assesses whether revenue-generating activities of tax-exempt organizations align with their exempt purposes or function as taxable businesses.

2. What triggers unrelated business income tax (UBIT)?

UBIT applies to income from activities not substantially related to a church’s mission, particularly if those activities are regularly carried on and generate over $1,000 annually.

3. Can a church lease property without paying taxes?

It depends on the property’s use. Leasing unrelated to ministry purposes typically results in taxable income under the commerciality doctrine.

4. How can churches avoid tax liabilities?

Churches should clarify their mission, separate ministry from business activities, consult attorneys, and ensure property use aligns with their exempt purpose.

By understanding the commerciality doctrine and adhering to IRS regulations, churches can navigate the complexities of revenue-generating activities while maintaining their tax-exempt status.

Image: AdobeStock/mh.desing

Evaluating Your Church’s Next Vendor

Ask key questions to avoid getting scammed.

Laura J. Brown
Bio

Last Reviewed: February 11, 2025

Most vendors are honest people who make a living from selling a product or providing a service. But occasionally, church leaders may encounter a salesperson or vendor whose word cannot be trusted.

You wouldn’t sign a 30-year mortgage without knowing a little bit about the lender. Neither should you sign a vendor contract without asking some pertinent questions about the company’s reputation and expertise.

Do Your Research

If you’re going to be investing considerable time or money in a vendor, you’ll want to do a thorough evaluation to ensure a mutually beneficial relationship. Start by asking colleagues at other churches for their recommendations about a specific product or service. If they “adore” (or despise) their new copy machine, for example, they’ll be glad to share some information with you.

Here are some questions to get your investigation started.

Viability
  • Is the vendor financially stable?
  • How long has this person or company been in business?
  • Will the company be in business 10 years from now?

Experience
  • Is this vendor familiar with projects of the same complexity and scope?
  • Has this vendor worked with churches of similar size and characteristics?
  • What’s this vendors’ reputation for quality? Reputation
  • Does this vendor have a strong customer base?
  • What do customers say about their experience with the vendor?
  • How many customers have left this vendor for a competitor?
  • What’s this vendor’s rating and history of complaints with the Better Business Bureau?

Customer Service
  • How available is customer service, when you have a question or problem?
  • Is the vendor’s customer service staff knowledgeable, helpful, and friendly?

Some of these questions you’ll pose to the vendor; some you’ll want to investigate on your own. Of course, the amount of time you spend on research will vary, depending on the size and complexity of the purchase.

Check References

It’s easy to get excited about a company’s offerings during a sales pitch. But there can be a gap between what sales materials promise and what a company can deliver. To get a better sense of what you’re signing up for, it’s important to talk with flesh-and-blood customers.

This means asking your vendor for a list of references, and then contacting at least two of them.

Official References

Most vendors will give you a list of customers who are likely to give the company a glowing recommendation, but they may be worth calling, nonetheless. Customers may be willing to provide honest opinions on the company’s dependability, customer service, and their overall satisfaction with the vendor.

Unofficial references

It’s also good to find customers for “unofficial” references. You might be able to find other customers by looking on the vendor’s website for examples of past work, or by talking with other churches in your region.

Phony References

Checking references may alert you to a scam. For example, a vendor may direct you to a phony website or a satisfied “customer” who’s actually an accomplice. If a vendor provides just an email address, request a telephone number, too.

Accept only references from companies with a verifiable mailing address and telephone number. Ideally, you’ll speak with a receptionist before talking with the actual reference person. It’s generally not a good idea to accept references from customers who call you.

Use a Cheat Sheet

To make the most of your reference checks, write up a list of questions you’d like to ask each of the customers you call. Be specific. Asking, “How’s their customer service?” will generally yield less useful information than: “How many customer service calls have you placed?” and “How long did it typically take for them to fix a problem?”

Take Your Time

Some salespeople encourage you to sign an agreement quickly, often using a price break or some other incentive that expires if you don’t act by a certain date.

Never feel pressured to buy from a salesman. If you’re not satisfied that you know enough about the vendor to enter a written agreement, ask for time to think about the offer. Don’t sign any sales contract until you have reviewed it, preferably with an attorney, and confirmed that it matches the verbal agreement.

If vendors truly want your business, they’ll work with you to establish a solid, trustworthy relationship between themselves and your church.

Research Yields Results

Careful investigation can give you a great deal of insight into what might happen to your church if you were to enter an agreement with a vendor. By doing your due diligence up front, you can save your church the time, money, and heartache of getting duped by a scam.
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