We recommend that each church establish its own written benevolence policy. An appropriate policy would include the following:
- Description of the purpose of the benevolence program (e.g. to provide support to the poor and needy).
- Criteria to be used to determine whether a person qualifies to receive benevolent gifts (e.g. income limitations, distressed situation, loss of job, death in the family, etc.).
- Identify employee or pastor of church who is responsible for approving benevolent gifts.
- Identify amounts or types of gifts that can be made without approval from the Board.
Whenever payments are made from the benevolence fund, the church should maintain documentation to show that the benevolence policy was followed. This can be accomplished through the use of a form that includes the following information:
- Name and address of individual receiving benevolent gift.
- The reason for the payment.
- The relationship, if any, of the recipient to the church (i.e. are they related to individuals who control the church?).
- Approval by person responsible for benevolence program.
Clergy Financial Resources
Clergy Financial Resources is a national accounting and finance organization serving churches and clergy since 1980. They have an unparalleled tax expertise on the complex issues associated with clergy tax law, clergy taxes, clergy compensation and church payroll. Clergy Financial Resources is a valuable resource for clergy, churches and denominations.
< BackClergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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