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Benevolent Fund Giving and Disbursement

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Question:

A donor recently gave an offering marked for “Benevolence.” The donor had notified the pastor prior to giving the gifts and had told the pastor to use it at his discretion.

The pastor in turn used the money to buy things for a family of the church in need.

Is the gift tax deductible to the donor, or non-deductible, because it is a gift to an individual and not to a tax-exempt organization?

Answer:

Since the donor does not appear to be directing the contributions for some non-charitable purpose and since the funds are under the total discretion of the church to fulfill its biblical responsibilities, the contribution is deductible.

But church leaders are well advised to use a committee of trusted and confidential members/leaders to protect the pastor from accusations of favoritism or of directing benevolence to employees or volunteers as disguised compensation.

Several relevant blog posts are provided below:

Benevolent Fund Review

Church as a Conduit for Non-Deductible Gifts

Church Benevolence Fund Disbursements
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