Being a "support base" for missionaries

[gospeltab]

Hi,

We are running powerchurch 11.55. We have had a missionary couple approach us and ask if the church would be willing to receive their missions support checks. Essentially the money would come in for them and then go right back out to them.

I have so many questions.

1. What is the best way to set this up in Powerchurch?
2. Are their tax implications for the church?
3. Are there special reporting requirements for doing this?
4. Should we have a separate checking account set up for this?

I am sure there are a lot more questions I should be asking, but just don't know to ask.

They are working through an organization that sends out missionaries but because they are not going to be full-time right now the organization will not manage their funds for them.

I would appreciate any input/advice that anyone has for us!

Thank you in advance!!!

Deanne

[NeilZ]

Hi,

We are running powerchurch 11.55. We have had a missionary couple approach us and ask if the church would be willing to receive their missions support checks. Essentially the money would come in for them and then go right back out to them.

I have so many questions.

1. What is the best way to set this up in Powerchurch?
2. Are their tax implications for the church?
3. Are there special reporting requirements for doing this?
4. Should we have a separate checking account set up for this?

I am sure there are a lot more questions I should be asking, but just don't know to ask.

They are working through an organization that sends out missionaries but because they are not going to be full-time right now the organization will not manage their funds for them.

I would appreciate any input/advice that anyone has for us!

Thank you in advance!!!

Deanne

A lot depends on what they mean by 'receive their support checks'. If they assume that any funds contributed to their direct support by earmarking it for them can then be used as a tax deduction, they are sorely mistaken. The IRS specifically excludes any type of donation going to direct support of an individual from tax deductions. If these funds were coming in to a central collection point and then it was issued out to many missionaries, each getting a percentage, then that would be deductible.

This is something that you should discuss with an accountant as there are definite tax implications that you may need to know about.

[gospeltab]

Thank you for your initial response. We are still trying to move forward on this issue.

If people want to support these missionaries, they send checks to our church intended to support these particular missionaries, but all of the money that comes in goes directly into our missions fund where the director of missions determines how much money disburses to all of our different missionaries every month. Most of the time our missionaries receive the same amount of money every month, sometimes more if we are supporting a special project, etc.

Is this a legal use of funds so individuals can receive a charitable contribution for it?

It is still unclear whether we would be making checks out directly to the missionaries or to the organization sending them out. If we send it directly to the missionaries, would we have to issue them a 1099-MISC at the end of the year?

Thanks in advance.

[NeilZ]

Thank you for your initial response. We are still trying to move forward on this issue.

If people want to support these missionaries, they send checks to our church intended to support these particular missionaries, but all of the money that comes in goes directly into our missions fund where the director of missions determines how much money disburses to all of our different missionaries every month. Most of the time our missionaries receive the same amount of money every month, sometimes more if we are supporting a special project, etc.

Is this a legal use of funds so individuals can receive a charitable contribution for it?

Because you have a staff member (or volunteer) disbursing out of a 'pot' of funds to a number of missionaries, then yes, from all I have read this is a deductible donation. However, I would suspect that the Contributions Statement would have to list a generic contribution fund. For example, you can use "Missionary Support" as the fund, but if there is any reference to a specific missionary as in "Mission Support for John Smith", or a designation on the Statement that shows "Support for John Smith", then that's a murky area, and I would lean on the side of it NOT being deductible.

It is still unclear whether we would be making checks out directly to the missionaries or to the organization sending them out. If we send it directly to the missionaries, would we have to issue them a 1099-MISC at the end of the year?

Thanks in advance.

Again, based on what I've researched, as long as the money is coming out of one pot and not a designated account for each missionary, the church can send a check directly to the person being supported, however, you will probably have to issue a 1099-MISC. It would save a lot of issues if you sent directly to the organization.

Again, I would get with a tax accountant, or talk to the organization who sends/supports the missionaries to get their advice. I suspect the organization gets these kinds of questions all the time.