Church Payment for Summer Camp Expenses

Question:

What are the implications of a church using monies from the general fund to sponsor the children of its members to attend a Christian summer camp? Could the church also pay for staff members' children to attend?

Answer:

Many churches use monies from either the general fund or a designated "Camp Scholarship" fund to help families who do not have the financial resources to send their children to a Christian camp. This benevolence is deductible to the donors and non-taxable to the recipients. Churches must be careful to avoid becoming a "conduit" for re-characterizing a donor's payment of a personal obligation as a contribution to the benevolent fund. For example, while the church may offer scholarships to send children to a Christian camp, it should not accept a family member's contribution with the designation that it be forwarded to one of his or her own family members.

Gifts to staff members are taxable. However, if the church as a whole initiates benevolence for the purpose of sending children to camp, the fact that one of the children has a parent who is a staff member does not automatically make the gift taxable to the staff member. Churches must be extremely cautious, as this can be viewed as disguised compensation, especially if it is a regular occurrence and gives preference to staff members' children.

In some cases, churches may believe that Christian summer camp is an essential experience for the children of members. If a program is instituted with the genuine objective of educating children in Christian teachings through summer camp, it is our belief that a church could sponsor the children of members with no tax consequences.

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MinistryCPA - Corey A. Pfaffe, CPA, LLC

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