User Support Forum

Hello Everyone,
We have a ministry that takes missions teams out several times a year. We want to set up each team member's account in Power Church Plus. The team members and their supporters deposit money into their account and expenses for the trip are taken out of their account.
Donations to their account need to show up as contributions for tax purposes
We need to track the income/expense status of their accounts.
Can anyone help us with this?

Thanks and Blessings,
Jackie Barham
Chesapeake, VA

adminjackie wrote:Hello Everyone,
We have a ministry that takes missions teams out several times a year. We want to set up each team member's account in Power Church Plus. The team members and their supporters deposit money into their account and expenses for the trip are taken out of their account.
Donations to their account need to show up as contributions for tax purposes
We need to track the income/expense status of their accounts.
Can anyone help us with this?

Thanks and Blessings,
Jackie Barham
Chesapeake, VA

Jackie,

are each team members depositing money for their OWN support, and are the supporters deposting in care of a certain individual ??

If so, according to the IRS these are NOT deductable for tax purposes. If they were giving to a central mission fund, and that fund would then pay out without regard to how much was paid in to cover expenses of an entire mission team or group trip, then that money is deductable.

You may want to rethink how these funds are accounted for, if you want them as deductable.

Jackie, while I am not a tax expert, I disagree with the response from NeilZ. As a former missionary, I know that mission organizations routinely set up support accounts for specific missionaries and track (tax deductible) donations and ministry-related expenses for them. I think the key is that the governing board must authorize the ministry account and have final oversight on the disbursement of the funds even if they normally honor the donor's preferences.
I realize this doesn't answer your "how to do it in PCP" question, but perhaps it will help someone else to come up with a solution instead of writing off this practice entirely.
Blessings,

nmcfw wrote:Jackie, while I am not a tax expert, I disagree with the response from NeilZ. As a former missionary, I know that mission organizations routinely set up support accounts for specific missionaries and track (tax deductible) donations and ministry-related expenses for them. I think the key is that the governing board must authorize the ministry account and have final oversight on the disbursement of the funds even if they normally honor the donor's preferences.
I realize this doesn't answer your "how to do it in PCP" question, but perhaps it will help someone else to come up with a solution instead of writing off this practice entirely.
Blessings,

I would definitely check with a good tax accountant to be sure. This is a grey area, and the rules have changed in the past few years.

If I am understanding correctly what you want to do you can set up a Donor Restriction account for each mission team (PC V9 p. 224-228). This will allow you to track contributions, expenses, and balances for your teams.

However, I would visit Evangelical Council for Financial Accountability and read the article Fund-Raising -- Tax-Deductible Gifts for a Named Recipient's Personal Benefit. www.ECFA.org

Hope this helps!

MN Sue wrote: However, I would visit Evangelical Council for Financial Accountability and read the article Fund-Raising -- Tax-Deductible Gifts for a Named Recipient's Personal Benefit. www.ECFA.org
Hope this helps!

As a current and former employee of ECFA charter member organizations, I want to point out that both ECFA and IRS permit an organization to set up specific accounts to track support accounts for individual members of a missions team (or even full-time missionaries). The key to deductibility is whether the donations are given to help promote or benefit the specific purposes of the organziation (including the work of the missions team) as opposed to "personally benefiting an individual". ECFA publishes several resources which explain guidelines for this practice, or as suggested earlier, consult a tax consultant with knowledge of charitable and religious organizations.

Here is a quotation used by permission from Mr. Dan Busby, VP of ECFA:
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It fine to post my response if you feel it will be helpful. (Dan)
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If a donor intends that a gift is used for the personal benefit of an employee, tax law is rather clear that such a gift does not qualify as a charitable contribution. The IRS often uses the phrase "earmarked for the personal benefit of an individual" in these instances.

However, gifts may be given for the benefit of the charity and at the same time preferenced (some would use the word "designated," although we recommend using the word "preferenced") to assist the charity in funding the ministry of one of their particular workers (in some cases, this is an employee of the charity and in other instances, it is an independent contractor or volunteer) and such gifts generally qualify for a charitable tax deduction.

So, is it permissible for a charity to receive (and track in separate accounts--the IRS is aware that gifts of this nature are separately tracked in the accounting systems of charities) gifts preferenced to assist the charity in funding the ministry of one of their particular workers?

Generally, yes, IF the charity is following guidelines that have been outlined by the IRS (see attached document).
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Dan also forwarded a 3-page PDF document that explains the concept of "deputized fund raising" in depth. i would be happy to foward a copy to you since I can't "attach" the document in this forum. Just email me.
Leon
lnamstutz@tayloru.edu

to MN Sue & nmcfw,
Thank you very much for taking the time to respond to my inquiry. It will help tremendously.

God Bless You!
Jackie