Chris Miller, President of Miller Management, is the host of this week’s episode. He is joined by Dr. Glenn Miller, CEO of Miller Management.
This series will go into how we can be a generous church during this holiday season.
Benevolence Plans
First, have a plan. A plan that is biblically based and ties back to your vision, mission, and core values. Most times this looks like a benevolence plan or ministry.
Listen to our Mission & Vision series here
Second is funding. You can rely on donations from the congregation, or percentage of your budget, or a flat amount from your giving. Please be wary of people wanting to give to a specific family and also want to receive giving credit from the church. There are specific IRS donation credit laws, and dictating who the money goes to, disqualifies the donor from receiving the tax credit.
Thirdly, devise an IRS approved system. There are certain people who can receive benevolence, according to the IRS, and those that cannot. Remember, if you are gifting benevolence to a paid employee of the church – that money must be added to their W-2. Again, that’s an IRS requirement and a financial best practice.
Who can receive benevolence?
There are four different categories of who can receive benevolence from the church. For volunteers, if there is regular benevolence being handed out to a specific individual, the IRS can come back and count that as wages, so be wary of that method of “gifting” your volunteers.
Church members, the second category, are totaly clear to receive benevolence. Staff members, the third, on the other hand can cause issue. So that needs to be dealt with delicately.
Non-church members is the last category. Some individuals go from church to church to receive benevolence, so occassionally comparing notes with local churches to see if these people have been visiting all the churches in the area might be a good idea. This doesn’t mean you cannot help them out, but might cause for pause to revisit your mission statement.
Limits & Criteria
Limits for these gifts need to coincide with the money coming in. Frequency is next. Once gifting goes beyond 3 months, the IRS can conside this as wagers or taxable income for the individual. So one-time gifts and short-term giving is okay, but beyond 3 months there are more stipulations.
How do you decide? We recommend an application. Items to include would be name, address, social security, number of people in household, what kind of help is needed. Some even ask for a household budget.
Then there should be a committee to approve or deny the claims. And there should be dual controls over this account so someone couldn’t just give themselves a check. You might also consider a 3-day or 7-day approval process; we don’t recommend an immediate need. It is also best practices to pay a bill directly, not give an individual cash. If the person requesting the benevolence gives you a hard time, that might be a red flag and cause pause to giving out the funds.
Grace or Consequences?
Sometimes it seems there are people who are in the all grace camp or in the all consequences/ accountability camp. If you lead with accountability only, you may never give out any funds; whereas if you are all grace all the time, you won’t ever have any funds available. We should strive for harmony, as we follow Jesus’ example.
To learn more, we have a whole series on Grace vs. Accountability that you can access here.
Recap
Having a balanced approached is the best way to move forward with benevolence plans, we also need to keep in mind:
- Have a well written policy
- Keep it legal (check with the IRS guidelines)
- Written process for how money is approved and distributed
Coming Up
Join us next week as we continue our series: Generosity in the Church with some other non-profit experts in the field.
Join the conversation, see behind the scenes, and learn more on our Instagram and X pages.
Special thanks to our guest, Glenn Miller, and our masters of all things Podcasting, Chris and Lauren Miller, for this first episode in our Generosity and the Church series.