Policy for Dealing with Designated Donations to the Church and the Missions
A. In the case of gifts designated by the donor for a particular person or cause (for example a donor designates a gift for the benevolent financial assistance of a specific person or to purchase a new piano) the purpose of this policy is to guard against so-called “pass through” charitable giving, where a well-intentioned donor gives for a benevolent purpose, passing the funds through a charitable organization, in order to reap a tax benefit for charitable giving.
When a gift is given for a purpose specifically designated by the giver, the church must determine whether or not to accept it. If the designation made by the donor fits with the purpose and function of the church, then the gift may be accepted. If that is not the case, then the gift should be returned to the donor. In either case, the donor must understand that their designation for the gift is considered by the church as only advisory. It does not oblige the church regarding how the funds are used. That is, the church retains full control of the donated funds
and the discretion for how they will be used. If the donor does not understand or agree to these terms, then the donation should be returned.
B. In the case of gifts designated by the church or the mission for a restricted purpose (for example where the church or mission carries out special fund-raising for the restricted purpose of a building project or the purchase of a new x-ray machine for the mission hospital) the purpose of this policy is to provide transparency to the donor for how the funds will be used.
When donations are solicited for a specific designated purpose, then the church or mission will seek to communicate clearly to donors its policy for handling the funds received. It is our policy when raising funds for a restricted purpose to apply all the funds received for that purpose only. However, the church may in certain cases remove a restriction on gifts received, if it decides that it is in its best interest to do so. Such a case may occur, if say, funds were sought specifically to purchase an x-ray machine for $10,000, but $15,000 was received. The excess funds would not in such a case be returned to donors but designated for another purpose.
The church will seek to communicate this policy to donors through means such as fund-raising materials and receipts.
Model Form Letters/Receipts
#1: Dear ______
We thank you for your contribution to FCC, and we recognize that you have designated it to be used for a restricted purpose. Since that purpose is not part of our mission, we are sorry that we cannot accept it. Your will find your check enclosed.
Sincerely
____________________________________________________________________________________
#2: Dear _______
We thank your for your contribution to FCC, and we recognize that you have designated the gift to be used for a restricted purpose. Therefore, you need to understand the following important information. We are willing to accept the gift, because it is for a purpose that is compatible with our mission. However, if we accept the gift, we retain the right to use the funds for whatever purpose we deem best. We will consider your specific designation for the gift’s use to be only advisory and not obligatory.
If these terms are not acceptable to you, then please advise us so that we may return your gift.
Sincerely
INFORMATION TO BE INCLUDED ON RECEIPTS/FUNDRAISING MATERIAL FOR CHURCH-DESIGNATED GIVING FOR A RESTRICTED PURPOSE
When FCC raises funds for a specific purpose, it will devote the funds received for that specific purpose. However, if it turns out that the amount of the funds received exceeds the specific need, then it will reserve the right to use the surplus funds for other needs.
