Church Treasurer

Click here to download the Charitable Gifts Brochure in .pdf format.

What Every Giver and Church Leader Should Know About . . .

CHARITABLE GIFTS

Charitable (adj.): Generous in giving financial or other aid to the needy.

Giving, for Christians, is a profoundly spiritual issue and helps fulfill the need to respond to the overwhelming needs in "Jerusalem, in all Judea and Samaria, and to the ends of the earth" (Acts 1:8). We want to help feed the hungry and rebuild communities ravaged by war, poverty, and natural disasters. The person who is a generous, sacrificial giver has most likely learned to trust God and has discovered in giving the joy of the Lord.

But what about the practical side of giving? The opportunity to claim a tax deduction is not usually the primary motivating factor when a person chooses to give of their resources to a church or religious organization. In fact, about 70% of taxpayers do not receive any tax benefit from charitable giving because they do not itemize deductions on their income tax returns (Form 1040, Schedule A).

If you are among the 30% who do itemize deductions on your income tax return, the following criteria should be used to ensure your charitable gifts are tax-deductible.

When is a charitable gift tax deductible?

1. A charitable gift must be in the form of cash or property, such as checks, credit card charges, real estate, stocks, bonds, and insurance policies. Donated services are not deductible. Unreimbursed expenses incurred in performing the service, such as travel, meals and lodging, may qualify.
    
2. A charitable gift must be made before the close of the tax year for which the contribution is claimed. Church members should not be encouraged to post-date checks so that they can claim a tax deduction for a previous year. For example, during a church service on January 6, 2002 a member should not be instructed to date their check for December 31, 2001 in order to claim the deduction in 2001. Only gifts that are postmarked or received by December 31st are eligible to be claimed for that tax year. Contributions charged to credit cards are deductible in the year the charge is made.
    
3. A charitable gift must be unconditional and without personal benefit to the giver. A gift is an irrevocable transfer of the giver's entire interest in the donated cash or property. If the giver receives a return benefit in exchange for the gift, only the portion that exceeds the return benefit is deductible. For example, a person buys a $50 ticket for a fund-raising dinner. The value of the meal (the return benefit) is $20. Only $30 qualifies as a deductible gift. The church is responsible for disclosing the value or reasonable estimate of any return benefit and the portion of the ticket cost that is a tax-deductible gift.
    
4. A charitable gift must be made to or for the use of a qualified organization created or organized in the United States. A gift made directly to a foreign church or ministry is not tax deductible in this country. A gift made directly to an individual is also not tax deductible. For example, a Christmas gift given to a pastor or sent directly to a missionary is not tax deductible. The only exception to this rule is if the giver can prove that the gift was actually for the use of the qualifying organization. Unless the qualifying organization clearly retains full administrative and accounting control over the funds, this exception would probably not apply. (To find out if a church or organization is a qualified organization, ask to see a copy of their IRS Determination Letter. You can also call the IRS to find out, 800-829-1040.)
    
5. A charitable gift cannot exceed the amount allowed by law. There are limits on the total amount that can be claimed as a deduction in a given year. In general, people may deduct gifts to churches and religious organizations for up to 50% of their adjusted gross income. In some cases, a gift that exceeds this amount can be carried over and claimed for up to five years until it is used up or the five-year period expires.
    
6. A charitable gift must be properly substantiated. Substantiation requirements vary depending on the nature and amount of the gift. In general, individual cash gifts less than $250 may be substantiated by a cancelled check or reliable written record that shows the qualified organization's name, amount, and date of the cash gift. Individual cash gifts of $250 or more require receipts from the gifted organization with the following information:
    
   1. Name of donor.
   2. A statement indicating whether or not the organization provided any goods or services to the individual in exchange for the gift. If only intangible religious benefits are provided (generally not sold in a commercial transaction), the receipt must contain a statement to that effect. If an exchange was provided, a good faith estimate of the value of those goods or services must be included.
   3. The giver must receive the receipt on or before the earlier of the following two dates: (1) the date the giver files a tax return claiming a deduction for the contribution, or (2) the due date (including extensions) for filing the return.

Please consult the services of a competent professional if legal or tax advice is required. This section is for information only. For free quantities of this information in brochure form, call 800-458-3766, or download it here by going to File and selecting Save As....
 

 
American Baptist Mission Support includes categories for all gifts for the ministries of the agencies, regions, boards, or institutions of American Baptist Churches USA. As treasurer of your local congregation, you are commissioned with the important responsibility of remitting gifts in a way that reflects the intentions of your members. Be sure to use the "Monthly Report of Mission Support" form to accompany your church's monthly remittances. The report serves two purposes:

1. It identifies the church that sent the gift so that the church may receive credit for the gift.
2. It indicates exactly how the donor wishes the gift to be used.

What happens to your gift as it moves through the American Baptist Mission Support system?

1. You (the church treasurer) generally hold offerings until month's end.
2. At month's end, all gifts destined for ministry beyond the local church are sent either to your region office or to the American Baptist Mission Center, depending on whether or not your region serves as a "collecting agent."
3. For regions that are collecting agents, the region receives the gifts, accounts for them, and provides your church with a receipt. The region retains the funds belonging to it, and sends specific gifts and those for support of American Baptist institutions directly to the intended donor.
4. If ABCUSA is the collecting agent for your region, you send contributions to the American Baptist Mission Center for gift disbursement. The Treasurer's office verifies the dollar amount and the donor's intentions and distributes the gifts to the intended recipients.
5. All ABCUSA financial records are professionally audited each year.

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