Giving Policy
Contribution & Reimbursement Policy
North Coast Presbyterian Church
May, 2010
Introduction
We thank you for your interest in contributing to the ministry of North Coast Presbyterian Church (NCPC). The purpose of this document is to help you understand how your donations will be processed and reported so that your contributions will be used as you intended and you will receive the full benefit of your contributions for tax purposes. NCPC has adopted the following policies and procedures to be in compliance with the current regulations of the Internal Revenue Service.
NCPC is exempt from federal and state income tax as a not-for-profit religious organization under Section 501(c)(3) of the Internal Revenue Code pursuant to a group tax exemption ruling issued by the Internal Revenue Service to our denomination, the Presbyterian Church of America. This classification enables all of your qualifying contributions to NCPC to be tax-deductible.
General Guidelines
1. Contributions of Cash or Checks to the General Fund
Contributions of cash or checks are deductible by donors as charitable contributions under the current provisions of the Internal Revenue Code. Donations to the general fund are the primary way most people will give, and NCPC depends on the generosity of its families to support the needs of the church’s ministry. Each January, the church will provide an annual accounting of your contributions for gifts received the previous year. This accounting will satisfy all of the IRS documentation requirements for individual tax returns. Cash gifts will be included in the statements to the extent the church is able to identify the donor.
2. Contributions of Goods or Property
NCPC may accept gifts of property for use by the church, donation to others, or for resale. In each case, the Session (the board of elders) shall be responsible to decide the best use of the gift for God’s kingdom. In the case of such gifts, it is the donor’s responsibility to determine and document the fair-market (or appraised) value of the contribution to support any tax deduction. Upon request, NCPC’s financial staff will provide documentation that will describe the property, acknowledge receipt of the property, record the date the property was received, and will indicate whether the church provided any goods or services in return for the contribution. However, NCPC is not permitted by law to determine the estimated value of property gifts. NCPC reserves the right to refuse to accept contributions of property that are not related to the primary purpose of the church or are not in the best interests of the church.
3. Contributions of Stock
NCPC accepts gifts of stock, and such gifts are tax deductible. One advantage to donating stock is that the donor normally can avoid income tax on the gain from the sale of the stock. NCPC’s financial staff will provide the donor documentation which will contain the name of the stock, the number of shares and the date of transfer. Generally, the donor may use the median trading price for that stock on the date of transfer to calculate the amount of the contribution for tax purposes. This amount may be different from the amount the church actually receives when it sells the stock. It is the policy of NCPC to liquidate stock as soon as possible and convert the proceeds into cash or cash equivalents.
4. Contributions of Personal Services
NCPC deeply values all of the ways people contribute time and service to the ministries of the church. However, under current IRS regulations, the value of personal services is not deductible as a charitable contribution.
5. Contribution of the Use of Property
Individuals may permit the church to use property; however, such contributions are not considered by the IRS to be charitable contributions eligible for a tax deduction.
6. Contributions Must Be Unconditional
All contributions to NCPC must be unconditional, without any personal benefit to the donor. In a legal sense, the donor is divested of control over the contribution.
7. Date of Contribution
The contribution normally must be claimed by the donor as a tax deduction for the year it was made. Generally, a contribution will be dated at the time of delivery. A check that is sent in the mail is considered to be delivered on its postmarked date.
Special Considerations
1. Designated Contributions
Designated contributions are those that are made to the church for a specified purpose. If the purpose is an approved project or program of the church, such as a building fund or mission trip, the designation will not affect the deductibility of the contribution. However, if a donor’s contribution specifies that it be directed to a designated individual, then such a contribution is not tax-deductible by IRS standards and will not be accepted by NCPC.
2. Designated Contributions to Tax-Exempt Organizations
Designated contributions to organizations that are qualified to receive tax-deductible contributions can be given through NCPC on a limited basis, provided the organization has been approved by the Session. NCPC will normally encourage people to give directly to those organizations in order to limit the burden on the church staff, especially if such contributions are regular and recurring. Organizations are automatically considered to be approved if they are included in the current budget of the church.
3. Designated Contributions to Specific Individuals
NCPC has established a Benevolence Fund to assist people in financial need. NCPC welcomes contributions to the Benevolence Fund and has established policies to ensure that all contributions to the fund meet tax-exempt requirements. As stated above, a contribution to the fund specifying that the gift be used for a particular person will not be accepted. However, donors may submit a contribution accompanied by a written request that a particular individual’s needs be considered by the church. The donor must understand that such requests are advisory rather than obligatory. All benevolent funds will be under the control of the church and will be allocated according to the established policies and procedures.
4. Designated Contributions to Approved Funds
In addition to the Benevolent Fund, the Session may from time to time establish other funds to support various ministries of the church; these funds will be documented in the Session’s minutes. Normally these funds will have a targeted amount to be raised during a specific time period. The existence of these funds will be publicized and people will be encouraged to contribute according to their interest and ability. Unless otherwise determined in advance, excess funds raised will revert to the general fund at the end of the specified time period. Donors may request a current list of Approved Funds from the church office.
5. Contributions for Mission Trips
Contributions for approved mission trips can be made with the understanding that NCPC will have full administrative and accounting control over the funds, including all decisions concerning who will receive a benefit from the gift. In order to be deductible, a mission trip contribution must not designate a specific individual on the check. The Session must review and approve in advance each mission trip that will receive contributions.
6. Special Offerings
The Session may from time to time decide to take up special offerings for missionaries, special speakers, musicians, or other individuals. These special offerings will be approved in advance, publicized, and all people in the church will have the opportunity to make donations. If the donations are given through the church, then they will be tax-deductible for the donor and the amount given to the individual will be considered taxable income. Contributions given directly to individuals are not tax-deductible for the donor and are considered gifts to the individual rather than taxable income.
7. Designated Contributions for Unapproved Purposes
If the church receives a donation for an unapproved purpose, the request will be presented at the next Session meeting for consideration of that purpose. If the designation is approved, then an Approved Fund will be established and others may contribute to that fund in the future. If the designation is not approved, the donor will be notified and encouraged to redirect the gift to an existing Approved Fund or use within the church budget. If a resolution cannot be reached, the contribution will be returned to the donor.
Reimbursement Policy
1. Reimbursement for Budgeted Expenses
When individuals purchase goods or supplies that have been pre-approved by the appropriate ministry leader for a church function, they should submit receipts to the ministry leader who will then forward them to the church office for reimbursement. A check will be written to the individual and the expense will be applied to the appropriate line item in the budget. If the individual desires to make a contribution to the church for the amount of the expense, he or she may do so by making a separate donation that will be credited either to the General Fund or the appropriate Approved Fund. The church will not take receipts and enter them directly as contributions.
2. Unreimbursed Expenses
Individuals may decide not to submit receipts to be reimbursed for qualified expenses, but such expenses will not be included on their annual contribution reports.
Miscellaneous
The purpose of this policy statement is to provide donors with guidance as to general rules governing the tax treatment of their contributions to NCPC. The policy is not intended to constitute tax advice or legal advice. Donors should rely on their own tax and legal advisors to answer specific questions they may have concerning the tax treatment of their contributions.
If you have questions or need further clarification on any portion of this policy statement, please contact the church office at (760) 753-2535.