“He said to them, ‘Go into all the world and preach the gospel to all creation’” (Mark 16:15, NIV).
“We want to avoid any criticism of the way we administer this liberal gift. For we are taking pains to do what is right, not only in the eyes of the Lord but also in the eyes of man” (2 Corinthians 8:20–21).
Workers and senders are both important for the Great Commission of Mark 16 to be fulfilled. Without one or the other, the Gospel simply cannot be preached in all the world, as Christ commanded. And without excellence and integrity from both workers and senders, the name of Christ will be diminished (2 Corinthians 8:20–21).
In addition to supporting short-term mission-trips, local churches often provide direct financial support necessary to send missionary workers into the field. Other churches facilitate missionary support by collaborating with denominations or independent missions sending agencies. In the latter instances, the denomination or independent missions agency is the missionary sending organization, not the church.
When churches provide direct missionary support, they often use what is referred to as the “deputized support-raising” concept. Under the deputized support-raising approach, a worker is charged or deputized by the church with the responsibility to raise gifts to provide sufficient funds to pay part or all of the individual’s compensation, fringe benefits and related expenses. The church determines the amount of funds the worker is responsible to raise.
The deputized support-raising concept is an effective alternative to other support-raising methods because of the personal connection that exists between the worker and donors providing the support.
The proper handling of gifts raised and expended for mission trips often raises challenging tax, finance, and legal issues for trip participants and sending organizations alike.
For example, to avoid charitable gifts being treated as nondeductible earmarked gifts, contributions to support particular missionaries and other workers must qualify as donor-preferenced gifts—preferenced to support the work carried out by a particular individual but not earmarked for the individual. The deputized support-raising practice has occasionally drawn the attention of the IRS because of the tendency of some churches and other organizations to represent that contributions will only be used to support the worker raising the funds. In these instances, the transaction is blurred since donors may be led to believe the organization is merely a conduit for the gifts to the worker.
While it may take some additional time and effort, the administration of funds to support workers in the mission field is an opportunity for churches to model excellence, integrity, and compliance with the law. Here are some key points for leaders to remember as their churches handle charitable gifts in support of missionaries and other workers (these principles would also apply to other types of sending organizations):
For a contribution to a church for the support of a particular missionary or other worker to qualify for a charitable deduction, the gift should only be preferenced for the support of the individual—not restricted to benefit a certain individual.
All funds raised by missionary workers under the deputized support-raising concept should accomplish the tax-exempt (religious and charitable) purposes of the church. The workers are only representatives of the church.
The donor’s intent must be to benefit the church and not an individual. Communicating to a potential donor that the church will have complete discretion and control over donor-preferenced gifts is suggested by the IRS.
Communicating that the church will have discretion and control is only part of a church’s obligation under the deputized support-raising concept. Taking steps to demonstrate discretion and control is also a key factor in qualifying a gift as tax-deductible.
Churches that utilize deputized support-raising should carefully establish appropriate policies and procedures and communicate these to potential workers. Churches should periodically train workers to ensure they are familiar with the organization’s policies.
When a deputized worker disengages with a church, any balance in the worker’s account must remain under the control of the church and subject to its policies.
- Charitable gifts preferenced for particular workers are generally temporarily restricted revenue for accounting purposes. The gift preferencing does not create a restriction. However, the specific activity in which the worker is engaged and/or the geographic location where the ministry is performed is generally the basis of the restriction.
At ECFA, we frequently receive questions from churches related to the proper handling of gifts raised to support missions. To help equip those who serve in this important Kingdom work, we have developed a new resource called the Charitable Giving Guide for Missionaries and Other Workers (and its companion resource the Charitable Giving Guide for Short-Term Missions).
This new guide addresses some of the most common financial and administrative issues associated with sending missionary workers in a simple, how-to format with numerous examples and sample illustrations. These samples—which you can revise to meet your organization’s specific needs—include the following:
- Deputized Support-Raising Letter
- Deputized Support-Raising Response Form
- Deputized Support-Raising Gift Acknowledgment
- Deputized Worker Policy
- Communication from a Church to Its Deputized Workers
We trust the Charitable Giving Guide for Missionaries and Other Workers will be an invaluable resource to you and your church as you serve the Kingdom through missions and do so with excellence and integrity! Visit ECFAPress today to order your copy.
Dan Busby is president of ECFA (Evangelical Council for Financial Accountability), an accreditation organization that sets standards for governance, financial management, and fundraising/stewardship for churches and other nonprofits across the country.
Publication date: November 4, 2013